Summary List Placement
Oracle Chairman Larry Ellison said more than 100 companies and government agencies have partially or entirely moved — or are in the process of moving — to Oracle’s enterprise resource planning software from rival SAP, including through “contracts totaling hundreds of millions of dollars” in the previous quarter alone.
Ellison’s comments reflect the latest beef between the two long-time software rivals, which started in September when SAP’s chief financial officer, Luka Mucic, said at a Citi-hosted conference that “I have checked and we have not lost a single customer” to Oracle.
Ellison, in response, devoted the entirety of his prepared remarks on Oracle’s third-quarter earnings call to rebuting SAP and mentioned the company more than 80 times through the call, firing off the names of customers he says have moved from SAP to Oracle including railcar manufacturer TPX Company, security services firm G4s, solar panel manufacturer First Solar North America, and telecommunications company Transit Wireless.
“Perhaps [Mucic] should have checked a little bit more carefully,” Ellison said. “In Q3 alone, we signed contracts totaling hundreds of millions of dollars to migrate several very large SAP ERP customers to Oracle Fusion ERP. But this was not just a recent Q3 event. This has been going on for a couple of years.”
Ellison also noted that not every company listed had completely moved their systems to Oracle, and were still using SAP software in some areas — something he looks at as something of a disappointment.
“In other words, we don’t consider it a complete win until we replace out. If we just sell procurement and supply chain and manufacturing and things like that, but they still run SAP financials, we don’t consider that a complete win,” Ellison said.
“We’ve heard this before, and it’s as spurious now as it was then,” SAP said through a spokesperson. “Our priority is driving our customers’ success, not putting them in the middle of a public relations battle. And our numbers speak for themselves: Our increasing ERP market share is by now approximately double that of our closest competitor.” It’s not clear to which numbers SAP is referring.
ERP is a type of software that companies use manage “day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations,” as Oracle defines it. Cloud enterprise resource planning, according to RBC Capital Markets, is “going to be the most durable cloud growth market outside of the public cloud.”
Oracle’s stock price fell after announcing disappointing sales growth and revenue guidance in its third-quarter earnings report on Wednesday. Oracle’s overall third-quarter revenue was $10.09 billion, up just 3%.
Revenue for Oracle’s Fusion ERP application grew 30% in the third quarter, dropping from its 33% growth rate last quarter. Netsuite ERP, for small- and medium-businesses, grew 24% in revenue.
“Ultimately, I do believe that Oracle is taking ERP business away from SAP,” Moorhead Singhts & Strategies analyst Patrick Moorhead told Business Insider. “SAP technically doesn’t have what I consider a cloud-native ERP offering, and Oracle has two of them, Fusion and NetSuite ERP. SAP is in a very tough spot right now.”
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