Six months ago, Larry Ellison publicly promised that in March, some of SAP’s largest ERP customers would rip and replace those mission-critical systems and replace them with Oracle Cloud ERP.
In March, Ellison once again declared very publicly that loads of SAP’s biggest customers were in the final stages of replacing SAP’s on-premises ERP systems with Oracle Cloud ERP. It was, he said, just a matter of a little time.
But last week, in Oracle’s Q4 earnings call that lasted longer than most Oracle earnings calls, Ellison said not a single word about all those defections.
Not a single word. Not even a hint.
Of course, Ellison was under no specific obligation to talk about those hypothetical cutovers from SAP ERP to Oracle Fusion ERP. But in light of the huge hype he gave to those defections in Oracle’s December earnings call and again 3 months later in its March confab with financial analysts, the absence of any sort of mention in last week’s call is curious.
If you hadn’t seen the details in our coverage earlier this year of Ellison’s vows, they’re certainly worth looking at. Because if what Ellison promised in December and March comes even close to being true, it would represent a massive shift in the power structure of the entire enterprise-software space.
On the other hand, if it turns out that lots of big SAP ERP customers spurn the offers to switch to Oracle that Ellison said were eagerly accepted, then SAP’s massively valuable installed base of ERP customers will begin to look even more invincible. And Oracle’s credibility will take a hit—possibly a big one.
SAP has, of course, denied that any such ERP defections to Oracle are taking place. We spelled out SAP’s position in detail in a January analysis, SAP Calls BS on Larry Ellison Claim of Snatching Huge SAP Customer.
So check out what Ellison said back in December about plundering SAP’s top customers:
- “Right at the very apex of SAP’s customer base, in their top 50 customers around the world, is this big opportunity and we’re looking at this one particular implementation where we expect to go live in March of next year [that’s 6 weeks from now in March 2020]. And I would describe them as rooting for us. They want to have an alternative to a $1 billion SAP upgrade.”
- “We’ve just got to demonstrate that we can safely take these enormous companies to the cloud in a way that they’re not putting their business in any risk. And that’s why they’re watching this one particular giant implementation so closely.”
- “By the way, they’re not just watching and waiting. A number of their biggest customers in the heart of Germany—these are German customers, the core of SAP—are working with us. And moving some of their divisions to Oracle Fusion to persuade themselves that we can do this safely. They’ve gone that far.”
So after all the frothy talk in December and more of the same in March, why did Ellison decide to bypass the steamy subject this month? I have a few thoughts:
- The customers involved told Ellison that they don’t want any more public mentions of their future plans around moving to the cloud.
- They also might have made the point that they’re not so much dropping SAP as running a trial with Oracle in a division here or a business unit there.
- The COVID-19 global economic slowdown has put those plans on hold, delaying them for anywhere from 6 months to 12 months.
- Ellison might have felt he’d made his point in the December and March calls, and didn’t need to stir the pot to an even more frothy level here in June.
However that all plays out, these displays of extreme competition will drive great outcomes for customers.
And that’s one of the major reasons why in the Cloud Wars, it’s no longer the vendors calling the shots—it’s the customers.
Disclosure: at the time of this writing, Oracle and SAP were among the many clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.
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