Oracle and SAP Squabble, Opportunities for Search Vendors?
March 30, 2010
The world is changing in the enterprise. The first shift I noticed took place last year. Chief financial officers were pushing back on some procurements. I worked on one job for which the procurement team had a fixed amount of money for the year. Period. In the past, procurement teams could edge forward without having a specific amount of money to spend. The second shift is the number of companies who are bundling search inside of their applications whether the search function works particularly well or not. A good example are bigger companies who buy smaller companies with eDiscovery or content management systems. Within the smaller companies’ software resides a search stub. It may come from open source or a low ball vendor or a grandfathered deal with a search giant. Regardless of the approach, the acquiring company’s takes the position that what it just bought is going to do the job.
A third trend jumped out of the article in Marketwatch tagged “Bully Oracle Taunts Smaller Rival SAP.” For me, the most interesting comment in the story was:
They [SAP] have lost their way,” Ellison said, as he noted that it is difficult to make money selling to small and medium business. “If they don’t want to be No. 1, we sure do.” Granted, SAP had a tough year. In 2009, total revenue fell 8% and earnings per share fell 13%, including a restructuring charge. But Ellison is probably really annoyed about SAP’s recent statements that it plans to start doing more acquisitions. As the computer industry has begun to mature, Ellison has proclaimed Oracle the chief consolidator.
Forget the animosity. The point is that two companies are going to grow by acquiring other companies. Since neither outfit has a 21st century search and content processing solution, is this an opportunity for some search vendors to make their stakeholders happy and sell out to one of these aging giants? If you scan the outputs on the ArnoldIT.com Overflight system, you will see that quite a few search vendors have zero marketing activities underway. These are black holes, which may be an indication of preoccupied management or a lack of cash. A few of these outfits have a solid customer base and could benefit from the discipline an acquisition often brings to the acquired company. My hunch is that there are some ripe fruit to pick. Will Oracle and SAP squabble over the apple trees?
Stephen E Arnold, March 31, 2010
A freebie for sure.
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