Truth in Advertising, Part 183.2b
Posted by Jeff as SAP
Note: This post is the one I wrote a couple of weeks ago and then realized I was subject to quiet period. In light of our earnings announcement last week it would be an omission on my part to not deal with that subject. Honestly, I have not had a chance to go over all the detail but what I can say is that based on the facts that I have we just aren’t losing to Oracle any more or less than we historically have, and certainly not to the degree that Oracle would have everyone believe. We posted license growth of 8% and whatever Henning and Werner said on the call is what I would echo, with the added comment that we put up a really good Q1 (historically our weak quarter) so it doesn’t surprise me that Q2 came in soft (think pipeline). One other comment is that analysts are looking at license growth as a proxy or leading indicator, and in the market we are in I am not so sure that license growth alone is that informative anymore… but that’s probably a whole new post and I need to think it through a little more first. Anyway, what follows is the post I wrote verbatim, I didn’t edit it at all from what I originally wrote and then saved rather than published.
I need to focus on some SAP v. Oracle business today, click on through if you are not interested in that. As part of their Q4 announcement, the fellas in Redwood Shores made some statements about beating SAP 585 times in the last fiscal year. At first blush we were like WTF because that just can’t be possible, so we dug into it. As you can imagine we do our own internal win/loss and market share analysis on an ongoing basis, but in the interests of being intellectually honest about it we have to ask the question about how accurate our internal polling really is. I think we shooting it, the analysis that is, pretty straight with a slight lean to favorable to us… partly because it’s difficult to get accurate data on losses as sale executives would rather bury the bodies than talk about them.
Having said all that, we took a look at our competitive data and concluded that it is mathematically impossible for Oracle to have 585 actual wins against SAP in their last fiscal year. The simplest argument I can make is that we had to go back 6 quarters to identify 585 competitive deals against Oracle, and I don’t think it would shock you to learn that we certainly don’t lose to them 100% of the time.
Once we felt comfortable on our win/loss data we had to wonder what the hell Oracle is claiming. The only answer I can give is that Oracle is claiming every win for them in the last year as a win against SAP on the basis of the market being a duopoly and if they didn’t get the deal then we would have. This is pretty thin, IMO, because there are a few other competitors in enterprise software and a large number of deals that either vendor signs in any given time period are “roll-ups” where existing license are being consolidated under a new deal, meaning Oracle is presumably claiming non-competitive roll-up deals as wins against SAP.
I thought I would try something a little different to not only debunk this Oracle claim, but also name names and details. This is not something you are likely to get anywhere else and I had to do some serious thinking about whether or not to do this because we don’t generally talk about win/loss data in public, but I think the value of having transparency here outweighs the risks, and I cleared it with my boss so I have my ass covered.
What follows (click on the “continue reading” link) is the contents of an email from our EMEA (Europe, Middle East, Africa) region about the 585 win claim (I have similar data from North America, but this email was really well written from the standpoint of consolidating a lot of information into a no-bullshit form). I think what you will see is that not only is their claim of 585 wins dubious at best, but it’s outright fraudulent at worst and in the end their own chest beating exposes the weaknesses that Oracle has in actual sales competition with SAP. Indeed, many of the wins that Oracle claims are actually losses… and these were the ones they talked about!
Out of all 6 companies highlighted by Oracle, only 2 smaller opps were lost. By naming the other 4 in the context of winning against SAP they try to create perception. Out of their named references, we identified 6 deals which we won against them.
In the 585 customer press release was one EMEA NEWS company quotes, Virgin Mobile South Africa, – is an Oracle shop and there was no opportunity. This was not a loss for SAP.
In the earnings phone conference, they named Fiat and BP International as wins. There is no application win at BP International, but -as you know- SAP is replacing Oracle as a core financial backbone. At Fiat Group in US, we lost an opps to G-log in transportation planning.
In the EMEA press release Oracle highlights three Oracle shops – in two of them we did not have any common opportunity: The Corporate Office of the Government of Dubai (TCO) and SociÃ©tÃ© Generale, France, AR Telecom, Portugal we lost an XI deal.
From the 91 references Oracle names in the addendum of the EMEA Press Release for EMEA NEWS, we identified 5 wins and 1 win-back versus Oracle:
- CEZ a.s. (CZ) SAP since 2004, replacing OFA and Siebel
- Banco Commerciale Romana (RO), 3 won opps against Oracle
- Erste Bank (HU): ERP deal won against Oracle in Q1/06
- FÃ¶ldhitel-Ã©s JelzÃ¡logbank FHB (HU): SAP ERP win against Oracle in Q1/2006, but lost core banking
- EDF Gaz de France (F): won in Q1/06 , no recent win from Oracle in apps business
- Telecom Italia (IT), won against Oracle
Oracle does not claim any win backs from SAP in EMEA NEWS , but we signed 30 Safe Passage deals and won during their fiscal year 217 deals against Oracle, some very strategic who are references: SSL, Banco Santander, Caixa and Renfe.
In the addendum of the EMEA press release Oracle names 109 customers, without saying technology or application customers. The majority 91 companies (85%) belong to EMEA NEWS (in their last Q3/2006 earnings press release they named only 75 NEWS customers). 59 of these named companies (65%) are SAP customers (according to CRM), in 21 of these companies SAP is/was competing against Oracle.
41 companies (45%) are not SAP customers, some of them no SAP contact at all. (This time Oracle names more SAP customers than in the last Press Release, when we knew only 20 of 75 references in NEWS and we assumed that Oracle generates their revenue growth with customers we do not approach).