Ellison: Oracle Poised to Outgrow SAP in ERP MarketBy John Pallatto | Posted 2007-03-20 Email Print
WEBINAR: Event Date: Tues, December 5, 2017 at 1:00 p.m. ET/10:00 a.m. PT
How Real-World Numbers Make the Case for SSDs in the Data Center REGISTER >
Oracle CEO Larry Ellison claims his company is No. 1 in the CRM segment and is well-positioned to catch up to SAP in the enterprise resource planning market.Oracle CEO Larry Ellison claimed that his company is a "strong No. 2" to SAP in the ERP applications business and has the product strategy in place to outgrow its archrival.
Ellison made his comments on March 20 as Oracle reported third-quarter financial results for fiscal 2007 that showed the company generated revenue of $4.4 billion, up 27 percent, and net income of $1.03 billion, up 35 percent from the same quarter last year.
Software revenue was up 25 percent to $3.5 billion, with new applications license revenue up 57 percent, according to Chief Financial Officer Safra Catz. New database and middleware license revenue was up 17 percent while services revenue increased 36 percent to $916 million.
Ellison said he believed that Oracle was well positioned to continue growing its ERP (enterprise resource planning) business faster than SAP can.
"SAP may be the world's No. 1 ERP company. But ERP is a slow-growing, relatively mature business," Ellison said. SAP is concentrating on selling ERP software to smaller and midsize companies and is marketing separate product lines, including R3, MySAP and the new A1S product suite for the SMB (small and midsize business) market, Ellison noted.
In contrast, Oracle's strategy with its Fusion product line, which combines software from its multiple corporate acquisitions over the past four years, is "to have one ERP system, one suite, that will be available on demand, that will be available for small and midsize companies all the way to the largest companies," Ellison said.
Ellison also claimed that Oracle is "No. 1" and increasing its market share in the CRM (customer relationship management) market segment. "CRM is extremely important because it is a less mature marketplace. It is growing much faster than ERP and we're gaining share," he said.
Oracle is also expanding the sales of "industry-specific" application suites that it will sell to a wide range of its customers, from the largest down to midsize companies with revenue of about $100 million, he said. Ellison contended that this strategy will have a greater chance for success than SAP's strategy because it is selling one ERP and CRM system to the same customer set it is already calling on.
Ellison also said Oracle "is off to a very solid start" in its Linux support business by signing Dell, Hewlett-Packard and CDW to resell its Oracle Enterprise Linux package.
"We have signed a number of support contracts, some for over $500,000," Ellison said. Furthermore, Oracle has "replaced Red Hat at Yahoo and numerous other customer sites" as the Linux support supplier. "We're not going to build the Linux business overnight. But we will build it," he said.
He also claimed that Oracle has overtaken rival BEA Systems in the middleware market. Oracle's middleware business, he said grew 82 percent in the fiscal third quarter, while BEA reported that its middleware business grew 8 percent in its more recently reported quarter. Over the past 12 months Oracle's middleware business grew an average of 60 percent compared with 12 percent growth for BEA.
"It took us a long timeover five yearsto catch and pass BEA, but we did it," Ellison said.
Check out eWEEK.com's for the latest news, reviews and analysis about productivity and business solutions.