Oracle and SAP face severe competition from cloud ERP vendors

NetSuite, Workday and other cloud-based ERP vendors are challenging Oracle, SAP, and Microsoft Giants.

As the 2012 draws to a close, Oracle and SAP, the biggest player in the ERP software market, found that long-term competition among two companies was in a stalemate and faced the challenge of cloud-based ERP startups from NetSuite and workday.

"The prolonged competition between SAP and Oracle is deadlocked," said Frank Scavo, an analyst at Strativa, a marketing consultancy. Competition between veteran market players and upstarts is beginning to kick in. All the signs suggest that the upstart will win the race. "Although new ERP companies have very little revenue compared with established vendors like SAP and Oracle, they are growing at a very fast pace," says Scavo.

Oracle and SAP, as well as large vendors such as Infor, Epicor and Microsoft Dynamics, are turning to offer customers some cloud deployment options on ERP. "Should I stay where I am, endure those unpleasant things, or should I choose to leave," said China Martens, an analyst at Forrester Research at the Institute. ”

Although SAP and Oracle products derive many advantages from the dozens of-year deployment of products and have in-depth functionality across a wide range of industries, cloud ERP vendors can deliver faster deployment capabilities and promise "painless" upgrades and fixes, At the same time they are making the software a fresh brand by adding features such as social collaboration and analytics.

While SAP offers additional SaaS applications and business ByDesign kits for departmental users in midsize and large enterprises, SAP has positioned its main business suite as a large enterprise, making it a local core ERP system for large enterprises. Meanwhile, Oracle has highlighted cloud deployment options for its new fusion applications, despite Oracle's emphasis on increasing the deployment of fusion software.

Martens said: "In these two cases, these strategies have a certain risk." As you start to encourage customers to consider additional software, you are also starting to compete with other vendors. Customers who decide to turn ERP all over to the cloud may encounter new problems in the process of cloud migration, that is, choosing from a vendor product or a suite of the many best SaaS components from different vendors. ”

While some customers have opted to shift HCM (human capital Management) to workday, they have always preferred to keep some specific ERP components, such as General Ledger, in their data centers. Overall, the current ERP vendors are in danger, Scavo points out. He said: "You can observe in Larry Ellison's speech that he is criticizing who he is worrying about." Oracle's CEO Larry Ellison has been criticising the CRM giant Salesforce.com, but recently he has suddenly turned to criticizing workday.

Although he may not admit it, Ellison may have been rethinking these days. Scavo said: "If Larry Ellison not buy PeopleSoft, then workday may not exist." The acquisition means Oracle has given Workday's co-founder, former PeopleSoft CEO Dave Duffield A large sum of money and an excellent opportunity. For PeopleSoft, the main threat now is from workday. ”

Whether Salesforce.com will turn to the ERP market is still to be seen. Although Salesforce.com recently launched an employee performance management application called Work.com, the company has delivered more core ERP functions to partners such as workday.

Salesforce.com also invested in Infor. Although Infor is known primarily for its local ERP software, the company is now cloud a rapid transition. Infor's annual revenue is about $3 billion trillion, which is the largest ERP software manufacturer after SAP and Oracle. While there is no sign that Salesforce.com will change the infor strategy to buy infor, the strategy, once it turns out to be the third largest ERP giant, will blur the line between the old and new forces. (Gundy compilation)

(Responsible editor: The good of the Legacy)