Given Michael Lamoureux's commentary on Oracle's optimization enhancements in their recent sourcing release, I thought that I'd take a few minutes to analyze Oracle's latest moves in the Spend Management world on a more general level. As of many of you who have tracked this space for some time probably recall, Oracle had a good size lead initially on SAP in the procurement and sourcing technology sector across a number of fronts. In fact, Gartner called this out in their first general magic quadrant looking at the sector back in the 2001-2002 timeframe. At least back then, Oracle would usually receive the proverbial "+" over SAP for SRM when being compared directly in broad-based ERP evaluations where the SI knew what the heck they were looking at (which unfortunatley, is not always the case).
Oracle's lead, however, has not kept up over the years, as their slow development cycle -- not to mention distracting acquisitions and four-pronged development strategy which we'll get to in a second -- have caused them to a fumble their offensive advantage, at least on some occasions. Today, the "+" against SAP is no longer assured in head-to-head evaluations (which only happen a few dozen times a year with prospects, but are still important nonetheless, and remain the general yardstick by which applications groups are measured within the ERP world).
In fact, with SAP set to make a splash at Sapphire this year with a number of expected announcements -- I've heard from multiple fronts outside of SAP to expect announcements in such areas as spend visibility, contract management (especially Microsoft integration) and continued sourcing enhancements -- I reckon that Oracle might be put on the defensive in the ERP SRM battle. But is this entirely justified? The Oracle R12 release was a big step forward on the eProcurement side for the vendor -- not to mention also showcasing limited improvements in contract management and other areas as well. The sourcing advancements were small, however, but given these were a major focus of the previous releases. Overall, Oracle R12 has become a nice looking package (literally) which is finally showcasing many PeopleSoft-esque UI touches which came out of an internal project codenamed "swan". As a quick aside, does anyone else find it ironic that swans are pretty creatures on the outside, but are nasty territorial beasts in general?
But I'm not a naturalist, so I’ll leave that discussion tabled for now. More important, R12 tells but a single piece of the Oracle story. Currently, it's only getting about 1/4 of the vendor's development focus in procurement and sourcing. Peoplesoft and JD Edwards are getting at least limited development attention as well (although both suites lag SAP and Oracle given functional limitations compared to the other products). And let's not forget that fabled path to Fusion Applications. That's right, by 2015 -- or maybe 2020 -- once Oracle has milked customer upgrades and maintenance on their current three platforms for all they're worth then, and only then, will they have any incentive to release a fully functioning version of Fusion Sourcing and Procurement that is superior to eBusiness suite.
Stay tuned later this week as we continue our Oracle SRM mini-series ahead of SAP Sapphire next week. In Part Two of "The Oracle of SRM" I'll examine in more detail some of the functional and process strengths and weaknesses of Oracle in comparison to SAP as well as what to expect in the future. And following Sapphire, I might even come out with my relative "+ / -" comparative ratings on the two -- or was that five -- application suites as well.