Oracle`s acquisition of Siebel may have come as a surprise to some, but SAP says the move is not surprising at all.
"Oracle has chosen the path of growth through acquisition," SAP said in an official response to the news.
SAP also takes issue with Oracle CEO Larry Ellison`s claim that with the acquisition of Siebel, Oracle is now number one in customer relationship management (CRM).
Simon Carpenter, director of strategic initiatives at SAP South Africa, says according to the composite view SAP uses to measure itself against its peers that is drawn from reports by other listed companies and other sources like IDC, SAP has 58% of the overall business applications market and the Oracle group has about 30%.
"In the period from the end of 2002 to Q2 2004, the Oracle/PeopleSoft/Retek/Siebel CRM space went from 46% to 44% and SAP`s market share went from 46% to 49%. On the basis of that, SAP claims to be the number one CRM vendor," says Carpenter.
SAP ascribes the increased uptake of its CRM application to the high levels of integration it offers into the back-office environment.
"Customers want integrated solutions today and that is why best of breed companies like Siebel were struggling to grow market share," says Carpenter.
SAP has also slammed Oracle`s strategy of buying customers, saying SAP believes its strategy of focusing on customer needs is more successful than attempting to grow by acquisition.
"It has always been problematic putting software companies together, and while Oracle figures that out, we`ll continue with the strategy that has yielded significant growth in the past couple of years," says Carpenter.
Responding to Oracle president Charles Philips` description of the Siebel acquisition as another major beachhead against SAP, Carpenter says although it would be "silly" for SAP to be complacent, the key issue is why customers buy software.
"SAP will continue to focus on that without losing sight of the fact that we have a bigger competitor in the expanded Oracle," he says.
Carpenter says an important part of the SAP strategy will be understanding what competitors are doing, but emphasises there will be no knee-jerk reactions.
"It`s important for customers to see consistency. A lot of them are probably scratching their heads and wondering 'where to next?` with some products, but SAP has sketched a path for moving towards the business process platform and service-oriented architecture."
Carpenter says while the big battleground from an announcement and PR point of view is the US, Oracle`s acquisition of Siebel is likely to have very little impact locally. He says from SAP`s perspective, Siebel has a very low seat presence in SA.
"What customers are asking for is an integrated system. They don`t want a CRM solution with one view of customers and an ERP backend with another view that is not fully integrated into that CRM front-end," says Carpenter.
Related story:
Oracle to buy Siebel
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