Oracle takes the fight to SAP in India

Two of the world's largest software makers - Oracle  and SAP - have brought their global fight to India, where enterprises are spending more than ever before on technology.

In the past few weeks, California-based Oracle has published advertisements specifically targeting the clients of world's largest business software maker, SAP of Germany. The advertisements proclaimed that 'Oracle Surrounds SAP', with 96% of SAP customers running Oracle applications.
"Oracle is picking up on advertising now in India which it sees as a critical market to convert over from SAP," said Ray Wang, chief executive at enterprise software advisory Constellation Research.

As Indian enterprises become more sophisticated consumers of technology, software vendors like Oracle with $37 billion in global sales and $18-billion SAP are striving hard for their mindshare.

Over the past few years, the software giants Oracle, once a database specialist, and SAP, anenterprise resource planning software specialist, have each been expanding into the other's turf. Oracle started it in 2005 with the purchase of PeopleSoft, an enterprise resource planning software maker that competed with SAP. The German company returned the favour by first tying up with and later acquiring database-maker Sybase.

Typically, database software stores and manages all the data generated at an enterprise. This data is then processed using business applications to run payroll, manage inventory or engage with customers.



Moving further away from Oracle's database, SAP started pushing IBM's database software DB2 to its customers. Looking to garner a greater share of enterprise technology spending, Oracle acquired hardware-maker Sun, further complicating its relationship with hardware partners such as HP, IBM and Dell.

The fight overseas is now well and truly in India. According to Gartner, India will spend an estimated $3.5 billion (Rs 19,250 crore) on enterprise software in 2012. Also raising the stakes, Gartner thinks India will be the fastest-growing enterprise software market for at least the next four years.

"The advertisement exemplifies our position in the applications space - beyond ERP solutions," said an Oracle India spokeswoman. "It implies that our solutions can work in any environment which runs Oracle or non-Oracle ERP applications, which is only one tech solution component that help businesses run."

The implication is that customers need not depend on SAP and that Oracle can take care of all their business software needs.

In its core-competency of database, Oracle highlighted that it has over a 60% market share in India, "at least 30% points ahead of the nearest competitor". SAP did not reply to emails seeking its views.

Analysts said that overall SAP has been doing better than Oracle in India over the past few years and Oracle is now looking to change that.

According to data from trade journal DataQuest, SAP India had revenues of 6,866 crore in the year to March 2012 and has been growing at over 30% in the last three years. Oracle India on the other hand had sales of 9,208 crore during the same period but growth has been inconsistent. While it expanded by 26% in the 2011 financial year which ended in March, the growth rate fell to 16% in 2012.

According to an industry analyst who closely tracks Oracle and SAP in India, at least 150 customers who used to run their databases from Oracle's software have moved to IBM's competing product DB2 over the last two years to retain SAP as the core application.