Oracle, SAP, PeopleSoft, TomorrowNow, Agile… it’s hard to keep the relationship between all of these ERP players straight. Especially since they are all somewhat related to each other in an almost incestuous way. We like to pick on them for the complexity and cost they often add to organizations that are in reality fairly simple, but that’s not the point of this post. Today I want to try to peel back some of the business practices they use to grab customers, and how that sometimes ends up with the two heavyweights, Oracle and SAP, having same customers.
Most of you know that Oracle acquired PeopleSoft a few years ago. As we told you a couple months ago, right before the transaction closed 37 PeopleSoft employees left and started a new company called TomorrowNow. This new company provides technical support for PeopleSoft products. SAP immediately snatched up TomorrowNow, closing the transaction at about the same time as Oracle closed on PeopleSoft. Using TomorrowNow, SAP then went after Oracle customers and offered them support on Oracle products for half the price of Oracle’s own support. The program was called "Safe Passage," as it was intended to offer a "safe" pathway to migrate from Oracle to SAP products.
This obviously didn’t sit too well with Oracle, so they filed a lawsuit alleging an ingenious attempt by SAP to offer better and cheaper customer service on Oracle products to Oracle customers than Oracle itself does in order to eventually convert them to SAP. Actually the meat of the suit alleges SAP TomorrowNow (SAP TN) then began to access Oracle’s protected customer support databases, using usernames of PeopleSoft (now Oracle) customers that would soon expire. Massive downloading of technical and support documentation was recorded and traced back to Bryan, Texas.
The May 14th issue of Information Week tells us that the lawsuit took a step back when Judge Maxine Chesney dismissed herself from the case. I can’t say I blame her… it would be hard to stay awake in a battle of ERP software companies.
But then the May 21st issue of Information Week describes how Oracle is hitting back by acquiring Agile Software.
With Agile, Oracle plans to strengthen its presence in both supply chain management and enterprise resource planning. "Agile offers a very strong product lifecycle management solution that companies can use to differentiate from competitors and properly and cost effectively innovate products," said Jon Chorley, VP of supply chain execution at Oracle.
Whatever. Here’s the real reason:
At least 40% of Agile customers use enterprise software applications from Oracle, the executives say, although a good number use SAP. "SAP customers have probably gone through a long and costly implementation of SAP," Chorley said. "With Agile you have a solution that’s superior to [SAP PLM] that plays nicely in the sandbox of SAP," he argued, yet added: "If someone is looking at a full ERP implementation, that’s great, too." SAP customers already using Agile include Coca-Cola, Heinz, Conagra, Symbol, Tyco, and Lucent, Chorley said.
So… SAP is going after Oracle customers by acquiring a company that provides service to Oracle customers, Oracle is going after SAP by acquiring a company that has a substantial SAP customer base. They are intertwined in a maelstrom of uber-complexity, to paraphrase Ian Alexander.
Don’t you want them managing your own internal business processes? I’m laughing too.