 "The MISO Tussle And Its Impact On The Enterprise")
The enterprise software market is rapidly changing to become user-centric, Web-centric and service-oriented and is utilising new delivery models (such as cloud and SaaS). The competition among the four mega vendors viz. Microsoft, IBM, SAP and Oracle has become fiercer with the times. Val Sribar, group VP, Application Research, Gartner, speaks to Biztech2.com about the strengths and weaknesses of the mega vendors ruling the enterprise software space.
How are the four mega vendors placed in the market today? Can you identify the strengths and weaknesses of each vendor?
Microsoft, IBM, SAP and Oracle are the four largest vendors in the software market. Each of them has an extensive product portfolio and a good story to tell in their own way. Most enterprises have a mix of products from these players. Let us look at the strengths and weaknesses of each of them.
Microsoft
Microsoft’s strengths lie in collaboration. They have a large installed base with products like Windows, Office etc. They also have a huge developer network around .net. Now they also have products around the SaaS model like Microsoft Live, Azure etc.
However, when an enterprise is looking for a full set of business processes, Microsoft may not fit the bill as compared to other players like SAP and Oracle. However, Microsoft’s Dynamic products line is slowly gaining prominence in the enterprise segment.
Oracle
Oracle has bought over a lot of very interesting companies in different business application areas in the recent past. They bought over BEA, which they have renamed as Orcale Fusion Middleware. Besides, they have acquired PeopleSoft, Siebel, Hyperion, which gives them the ability to offer an enterprise a broad set of business capabilities. However, Oracle’s clients may have to do a lot of work to integrate those pieces together.
The middleware is compelling so it can be done, however, it’s not just about process integration; there are data models, which need to be integrated as well. The company offers process integration packs in the form of AIAs and PIPs, which are steps in the right direction. At the end of it, they will have to work on making all the different pieces work together; however, a lot of that is often left for the user or the integrators to do.
SAP
SAP started with most pieces already put together with Netweaver underneath. They have recently acquired Business Objects and are working through to figure out how it can be applied to different parts of their existing suite. SAP has compelling solutions for different verticals; the company offers solutions that start working together without the need for much integration as in the case of Oracle. The challenge here is that companies have to get a big footprint from SAP.
It is hard to start out small with SAP, if you are a big company. Once you are locked in to any of these vendors, you often suffer due to the change in their pricing. For example, SAP has moved maintenance charges from 18 to 21 percent, a lot of people cannot afford this. It is not something that will drive customers away but it certainly frustrates them with SAP. The kind of market we are in, pricing is a big challenge.
IBM
IBM has got a compelling middleware story with WebSphere, they have also acquired Cognos. If you want to stay neutral from business application vendors like SAP and Oracle, IBM is your story. However, you will have to make a trade-off between whether you want a lock-in at the business apps level or at the lower level. If you get this lock-in at the business apps level with an SAP, you are more likely to have all those business processes fit together well. If you get this at the lower level, then you will be able to pull the best-of-breed products and weave them together with your own solutions. However, you will not get business application capability from IBM as they are purposefully staying away from it. They can be neutral and weave all the pieces together.
IBM’s got a real strong story if you are still building things on your own. The BFSI sector and many arms of the government, which have peculiar requirements, depend on IBM for development. On the other hand, if you are in industry like manufacturing, you should think of SAP or Oracle.
How far do you believe in Oracle’s Fusion Middleware vision?
The Oracle Fusion Middleware vision is a strong one. The pieces they have bought and the ones which they had were at the top of the market. The real question is how well they can tie the things that they have bought at the business application level. It is definitely going to take some time. To tell you the truth, not many people are currently ready to buy that vision.
Who will ultimately win the battle, SAP or Oracle?
In a tough market, when you can’t afford to deploy the whole next-generation suite or upgrade the ones you already have, you would prefer to settle for best-of-breed discrete pieces. Oracle has an advantage here. They can sell those different pieces and weave them together later. SAP’s announcement of Business Suite 7 is on similar lines, where you can incrementally add functionality but you definitely need the business suite to begin with. Business suites are big projects that require a huge capital flow, which is hard to come by right now, so Oracle is likely to gain some momentum there. On the other hand, SAP has a huge installed base. Oracle has pieces of the installed base, but they are not well integrated like SAP’s offering. So, this fight doesn’t look like it’s going to stop any time soon.
People will be incrementally adopting more Oracle where there is a mixed environment. However, then companies might get frustrated as they find that the pieces are difficult to integrate and they might also realise that doing all that work is equivalent to adopting a new business suite.
I know you would like me to choose a winning vendor here. We think Oracle and SAP are going to fight this out for a long time to come and the idea that one of them is going to get the upper hand anytime soon is not the way it is going to work out because of the installed base.