Print Article

Close Window

From: www.cio.com

Oracle vs. SAP: Battle of the Spring 2010 Balance Sheets

Thomas Wailgum , CIO May 13, 2010 Everyone loves to pit Oracle (ORCL) and SAP against one anotherincluding the executives of the two behemoths that sell ERP, CRM, BI and supply chain software. Now that SAP has released its first-quarter earnings (Oracle did so in late March), now is as good a time as any to break downin a head-to-head balance-sheet battlejust how each fared, as CIO.com has done previously. In addition, we'll look at the burning questions facing each vendor and their CEOs now, and what the "safe harbor" outlook for the rest of 2010 is. Two things to note: Oracle's and SAP's fiscal years don't run on the same calendar periods. Therefore, this table compares Oracle's Q3 FY 2010 numbers (U.S. Generally Accepted Accounting Principles, GAAP) vs. SAP's Q1 FY 2010 numbers (International Financial Reporting Standards, IFRS). "Change" compares the most recent quarter's results to the quarter the year previous.

Total Revenues / Change

Oracle $6.4B / +17%

EDGE $3.1B / +5%

Net Income / Change

SAP

Oracle $1.2B / -10%

EDGE

SAP $486M / +97%

Total Operating Margins / Change

Oracle 29% / -7 percentage points

EDGE

SAP 22% / +9 percentage points

Software Revenues / Change

Oracle $1.7B / +13%

EDGE

SAP $582M / +11%

Service & Support Revenues / Change

Oracle $3.3B / +13%

EDGE

SAP $2.4B / +12%

1 of 3

5/17/10 2:16 PM

Earnings Conference Call Quote

Oracle Oracle CEO Larry Ellison: "In applications, SAP is the leader. But their technologythat they use for their applicationsis a proprietary technology, a German programming language called ABAP...that is a 25-year-old technology.... [SAP] is a company that we think is vulnerable, and we think we have an excellent chance of becoming number one in applications."

EDGE

SAP SAP co-CEO Bill McDermott on the importance of Business Objects to SAP's future: "...and as we look at this past quarter, we've replaced the competition in 70 very key wins, 24 of them with a well-known competitors. And what we are seeing is the Business Objects line of business 'conversation' is in many cases now the precursor for the ERP 'conversation.'"

Mentions of the Other Vendor During Earnings Call

Oracle Mentions of SAP by Oracle Execs: 27

EDGE

SAP Mentions of Oracle by SAP Execs: 0

What Maintenance and Support Problem?

Oracle "Customer support attachment and renewal rates continue at near record levels." -Jeff Epstein, Oracle CFO [Note: Oracle does not reveal those numbers]

EDGE

SAP "Nine out of 10" SAP customers have chosen to go with Enterprise Support. "By providing choice, it's calmed down the [controversy]. Now that's very far behind us." -Bill McDermott, SAP co-CEO

Big, Scary Numbers to Consider

Oracle Generated $8 billion of free cash flow during the past 12 months.

EDGE

SAP Execs' goal is 1 billion SAP users by 2014. Currently SAP has 12 million users.

Top Rivals (Other Than Each Other)

Oracle IBM

EDGE Microsoft

SAP

Which Will Be Generally Available First?

Oracle Fusion Applications Suite

EDGE

SAP Business ByDesign

2 of 3

5/17/10 2:16 PM

Who's Really Calling the Shots?

Oracle Larry Ellison (still)

EDGE

SAP Hasso Plattner (again)

Nagging Questions

Oracle Will former Sun customers find happiness now dealing with Oracle? How far will Oracle go to protect its maintenance and support revenue streams? Despite all the Fusion Apps hype, people just don't dig enterprise software.

EDGE

SAP Can the co-CEOs win over skeptical SAP customers and the Sapphire audience? Even with Business ByDesign, does SAP still offer too much legacy? SAP executives think sustainability is important, but do customers care that much?

Table by Thomas Wailgum

Do you Tweet? Follow me on Twitter @twailgum. Follow everything from CIO.com on Twitter @CIOonline. 2010 CXO Media Inc.

3 of 3

5/17/10 2:16 PM