SAP AG is to offer customers its own database product, in an attempt to stop arch rival Oracle Corp from stealing its customers through database sales. Oracle, which supplies three quarters of SAP installations with an underlying database, is increasingly using its database dominance as a lever to replace SAP’s core ERP software with its own. In a new agreement with fellow German software company Software AG, SAP has negotiated the rights to sell its version of the Adabas database to new customers, rather than to the existing customers it has been selling to over the last two years.
In a deal little noticed when signed in 1997, SAP acquired full rights to the Adabas D technology from Software AG, which at the time had around 10% of the R/3 user base. It had already been reselling Adabas since 1994, and there are currently around 700 SAP installations using it. Now SAP is ready to sell its version of Adabas to new customers once again, under a new name. It won’t be sold under the Adabas D brand, since Software AG still holds the rights to the name. Earlier this week, German business weekly Wirtschaftswoche said the new database package would go on sale in the fall.
SAP insists it’s not trying to become a database vendor, and only has the rights to sell the product in conjunction with its own software, not independently. It says the original intent of the move was to keep Adabas alive for SAP’s customers that were already using it. SAP claims the new database option will give customers the benefit of a more competitive database offering in the R/3 environment. It says the choice complements the existing portfolio of databases from which SAP customers can choose.
Recent sales of Oracle manufacturing software have now surpassed SAP AG sales in the US. That means that Oracle can claim to be the leading ERP vendor in the manufacturing area. We expect Oracle’s lead over SAP in manufacturing applications sales to continue to grow, said Janet Gould of research firm Plant-Wide Research Inc, which supplied the figures. Oracle’s 1998 US manufacturing revenues were $1.47bn, according to the company, compared with SAP’s $1.44bn.
International Data Corp’s Tony Picardi said SAP has always steered its customers away from Oracle towards Microsoft’s SQL Server in order to get Oracle off the books. But Microsoft does not scale, says Picardi, so if SAP wants to guide its customers its needs a real database. Picardi said that by choosing SAG rather than Sybase or Informix, SAP is getting a cheaper deal, while SAG gets badly needed funds. But Adabas does not have a large customer base or much recognition outside of Germany. Adabas has never really been driven into the worldwide market, says Picardi, but as one of the top five ERP vendors, SAP has the cash to change that.
