SAP vs. Oracle, Battle Royale

Mark Brunelli writes "As the battle for business application supremacy heats up, Oracle users are standing by Larry Ellison and Fusion while SAP customers say NetWeaver will lead the way to victory." From the article: "Zoellner, who says he has worked with both Oracle and SAP users throughout his career, believes that the Nucleus Research study cited by deHenry is right on in its conclusion that Oracle's average three-year total cost of ownership (TCO) is 48% lower than SAP's. The business analyst said that the TCO issue is particularly important to companies in developing areas."

Comments

wow

[caffeinemessiah]

if ORACLE's TCO is 48% lower than SAP, just how many small countries' budgets does SAP charge for a small installation?

Re:wow

[tyler_larson]

if ORACLE's TCO is 48% lower than SAP, just how many small countries' budgets does SAP charge for a small installation?

Costs vary (particularly installation and configuration costs), but as a rule of thumb, if your business's income isn't enough to make your state government envious, then SAP is not for you. If all you need is a "small" installation, then you really don't need SAP.

Though I am interested in hearing what Oracle has to offer; I had thought that SAP was the only player in this field, which is why they can charge so much for such a horrible product.

Re:wow

[Avogadro65]

I don't know how much my company spent on its recent upgrade to mySAP, but initial SAP installation a few years ago cost $28 million. $3 million for the software $25 million to install the sucker That's for 4 large plants, a general office, and countless sales offices across the continent.

SAP == CRAP

[autopr0n]

Seriously, how many people have ever had a chance to glimpse into the dark heart of SAP? It's very ugly. Hedious even.

It might run business well, but it's hardly very extendable or flexible. Given the price you're better off writing your own system, IMO.

Re:SAP == CRAP

[jools33]

"Seriously, how many people have ever had a chance to glimpse into the dark heart of SAP? It's very ugly. Hedious even.It might run business well, but it's hardly very extendable or flexible. Given the price you're better off writing your own system, IMO."

5 years ago I think this comment was valid.
Having worked in SAP for over 10 years I can partially agree with your comments. Historically SAP has been slow to adapt its central ERP system (R/3). However thats not where the battle is being fought at all - and I think you've missed the point of the article. SAP's new platform - Netweaver really isn't one single system - its a complex architecture not a single platform any more. Its this architecture that Oracle is competing against by acquiring as many of the competition as possible and then trying to integrate them into a single solution. SAP have had a smarter approach where they have mostly not bought out the competition (althought thats not the case with MDM or Toptier). SAP have instead realised about 5 years ago the direction where things were heading and I really believe they are several steps ahead of Oracle now in terms of building a full blown Enterprise Services enabled architecture. In my opinion SAP have neglected updating the central (legacy) ERP system (R/3) in favour of building an enterprise services / integration architecture around the old central product - so much so that the old legacy R/3 system isnt really central anymore - the systems around it such as business intelligence, CRM, APO, Xi, solution manager have taken a much more prominent role - and each of these new systems - whilst running on the same base kernels really are completely reworked in terms of the architecture and APIs on offer.
SAP still have a long way to go - and they could really do with reworking some of those older "hideous" code libraries - particularly on their R/3 platform. With Netweavers Enterprise service architecture - SAP looks to be truly flexible and extensible and leaving its old "hideous" code behind - and I suggest the previous poster take a read on http://sdn.sap.com/ for a more up to date understanding of what SAP today is all about.

Open source

[Eightyford]

"My feeling is that the pricing from SAP is far too high," Zoellner said. "I know this has been a problem."

With so much money going into enterprise applications like SAP, why haven't we seen an open source alternative? Why wouldn't IBM, Walmart, and GM (for example) get together and create an open source version? They could share the costs with each other and smaller companies, while avoiding vendor lock-in.

Re:Open source

[blacklevel]

While this is not a full-scale alternative to the likes of SAP or Oracle, Compiere http://www.compiere.org/ does cater to the small and midsize market. This currently only runs on top of the Oracle database, but is in the process of being ported to Postgres.

Re:Oracle v. SAP? Huh?

[TopSpin]

in the process of buying the pieces to start their own ERP suite

Oracle had a successful ERP platform years before they bought PeopleSoft. ERP is old hat for Oracle. The recent "fusion" work is their attempt to produce a new platform to replace the now rather mature Oracle ERP platform and provide a road for their recently acquired PeopleSoft and JDE customers.

As far as TCO costs go, I wouldn't be surprised if Oracle was cheaper. The stack is, while highly proprietary, fairly streamlined compared to SAP.

I've been there for a 1:1 comparison

[marcushnk]

and Oracle financial won hands down time after time after time.
Where it was let down was in the procurement and maintenance sections... where BOTH sucked fetid dingo kidneys.

That was 3-4 years ago now.. so I hope Oracle have picked up their game....

Re:TCO

[the_womble]

Why isn't Net present value used as the benchmark for comparing two IT projects? It really is the only one that makes sense because TCO doesn't take into account the interest rate.

Because everyone (i.e. including management) knows that NPVs are very uncertain thanks to all the assumptions that have to be made in order to calculate them.

As non-IT people are less familiar with TCO they are less likely to be suspicious about the numbers.

The answer

[SuperKendall]

The reason you have not seen an open source SAP is because it's so big and monsterous and hard to figure out what it does, that no-one knows if there's already an open source SAP or not. There could be several right now.

Only half kidding.

Silly Arguments

[Trojan35]

Guys, SAP has stuck around and will stick around because it's very hard to learn. You don't realize that sometimes it's more painful to fix a broken system than to live with its quirks. There are good reasons why businesses stick with SAP.

Further, let's just drop all this OSS nonsense. I believe it would take 10+ years of development for anyone to seriously consider it. Let's say you develop a system. Who is trained on it? What major companies have successfully run it?

Look how long it's taken Linux to gain acceptance, and Linux is something you can incorporate one server at a time. To move your whole company over to a new database system is not something anyone wants to do unless there's a proven, stable solution. This is just one of those areas where OSS can't compete effectively IMO. OSS isn't the answer to every question, as much as some would like it to be.

Re:TCO Why no open source alternative

[markhb]

FUD. Google, with one of the largest setups on the planet, uses open source software and doesn't seem to have any trouble.

Cool! Where can I download the sources for PageRank, their database schema, and their search front end?

Seriously, while you make some good points regarding the viability of building an OSS Enterprise app suite, I see two pitfalls to this approach:

• Typically, ERP is designed to be customized by an army of consultants, which as others have pointed out is where the real money is. If we assume that the plain vanilla OSS package won't meet the needs of most prospective users, a third party would need to be able to recruit, train, feed (i.e., pay), and mobilize such an army on some scale. It seems like it would be extremely difficult to put together the seed capital to do that and build it into a viable business in a reasonable amount of time. I would be interested to see if the piecemeal market you envision would develop; if I were the customer and I heard that approach, I would anticipate boatloads of acrimony and finger-pointing.
• As someone else alluded to above, SAP and Oracle will warrant the financial reliability of their systems, or at least they are legally-constituted entities capable of being sued. What third-party would think it smart to do that with OSS? At the very least, they would have to vet the source of each new release of the code they implemented, which adds professional costs and throws a big hurdle in the way of "release early, release often."