In a January 15 IDG/ComputerWorld/CIO (I'm never sure where these articles from my old employer start), Thomas Wallgum asks:
"In other words: Have SAP and Oracle (ORCL) become too big to compete in this new decade of constant change, next-generation app pipelines, pricing upheavals and innovation-first business strategies? It's easy to suspect that the two companies' relative bloat and market complexity have made decision-making and strategizing thornier propositions for them, especially as of late, though it's difficult to know the exact answer. But what we do know is that companies such as SAP and Oracle could, internally, be dealing with a unique, festering problem that may be overwhelming executives: Are the companies too big to manage?"
The answer is Oracle is not yet big enough but is working on it with the about to be consumated Sun (JAVA) acquisition. And SAP is way too small to succeed long-term. SAP is trying to grow organically with its multiple-year campaign to triple its user base. But in the end, SAP will have to acquire or be acquried just like BEA, Geac, Informix, Mapics, PeopleSoft, Rational, Veritas, and many more before them.
That's because small is bad in the information technology (IT) market (and most others I assume). All of the above acquired enterprise-software companies were ranked as high as SAP and Oracle in their respective enterprise software markets over the last 10-15 years. Yet none were big enough to stand alone.
Of course, both Oracle and SAP are over 30 years old and are well aware of how to manage and adapt to change. No one really thinks that the years 2010-2019 in IT and enterprise software are going change more quickly than the last three decades, or provide vastly different pricing dynamics (components down; make it up in volume and services), or that the past did not require "innovation-first" business strategies.
Oracle succeeded first of all because it took the innovation of relational databases out from under IBM's nose and SAP succeeded because it took the innovation of integrated enterprise applications out from under IBM's nose. Yet IBM still sits there, bigger than both in software and number one or two in all IT. Yes, big is better.
-- Dennis Byron
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