Business software vendor SAP plans to intensify its efforts to win over users of rival applications from Oracle Corp., an SAP executive said Thursday.
SAP intends to release the second version of its Safe Passage migration program aimed at Oracle's customers in the third quarter, said Bill McDermott, president and chief executive officer of SAP Americas.
"Our job is to get into [Oracle's] installed base and let them know there's a choice," he said.
SAP launched the first version of Safe Passage in January 2005 initially as a way to appeal to PeopleSoft and J.D. Edwards applications users who became Oracle customers after the database and applications vendor won an 18-month battle to acquire the ERP (enterprise resource planning) company. PeopleSoft closed the purchase of J.D. Edwards while Oracle's hostile bid was unfolding.
Over time, SAP has widened the program to include all of Oracle's applications, including E-Business Suite, a homegrown Oracle technology versus the software it gained from buying PeopleSoft, CRM (customer relationship management) player Siebel and retail software vendor Retek.
McDermott sees three pieces of Oracle's applications business as particularly vulnerable to SAP's attack -- its entire J.D. Edwards family, its Siebel CRM-hosted and on-premise products and PeopleSoft human resources software. SAP also plans to get more aggressive about encouraging users to move off Oracle's E-Business Suite.
While not revealing any specifics of Safe Passage 2, the new program like version 1 will include an "excellent" trade-in credit for Oracle licenses that customers have already paid and include a variety of enablers to simplify migration from Oracle applications, McDermott said. Previous trade-in credits have been as high as 75 percent of the original Oracle software licensing fee.
Not to be outdone, Oracle has had an SAP migration program in place for over a year, known as "OFF SAP" or "Oracle Fusion For SAP," offering up to a 100 percent license credit to switch over to Oracle.
The war of words between Oracle and SAP escalated this week.
Oracle, which recently reported a strong fourth fiscal quarter, crowed over SAP's lower-than-expected software license revenue in its second quarter, which it announced Thursday. "We've reached an inflection point with SAP," Oracle President Charles Phillips told financial analysts earlier this week. "They're starting to slow down and we're focused."
Although there was a dip, SAP remains on track to grow software license revenue by 15 percent to 17 percent for fiscal 2006 as a whole, McDermott said. "There was a little seasonality in the quarter," he added. "We're not too concerned about the quarter. The company's on a roll."
McDermott expects Oracle to stumble in the next couple of quarters, claiming that the vendor's rise in fourth-quarter software license revenue was driven by Oracle's push to have its installed base sign maintenance licenses.
As McDermott looks out over the rest of fiscal 2006, he expects growth to come in the high-end from MySAP ERP 2005, SAP's and Microsoft Corp.'s joint Duet software, SAP's hosted and on-premise CRM business and its business intelligence and analytics technologies.
SAP will also be increasing its focus on the midmarket. "Sixty-five percent of our worldwide customers have revenues of less than US$500 million," he said. "We want to get the word out."
Oracle is also talking up its midmarket presence, with Phillips saying the company has 19,000 customers with annual revenue below $500 million.