How Oracle Is Defending Itself Against SAP’s Attack

Larry Ellison

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Oracle threw a defensive blow at its old nemesIs SAP this week. It released a couple of products to stop Oracle’s customers from buying SAP’s hottest new thing, HANA.These companies are on a collision course over millions of dollars in revenue from their joint customers.

SAP hopes these customers will ditch their Oracle databases and buy its new HANA device instead.

HANA is a product in a new category called in-memory analytics, which lets companies analyse business trends instantly, as they are being recorded to the company’s database.

SAP hopes its 15,000-ish customers using its Business Warehouse will yank out their current database (often an Oracle database) and use HANA.  But there’s even more at stake, because some 60% of SAP’s 176,000 customers are using Oracle’s database with SAP’s enterprise apps, reports Information Week.

So in response to HANA, Oracle has released an updated version of its TimesTen database. The new TimesTen will work with another of Oracle’s new products, the Exalytics appliance, and together the two products will do in-memory analytics like HANA.

SAP hasn’t gone public with its pricing, notes Techworld, but Oracle has. 

This reveals how much revenue is at stake. With support contracts, Oracle plans to charge about $337,200 apiece for an Exalytics appliance equipped with TimesTen.

So at $300,000 a pop, if SAP is successful with even a small number of these joint customers, that’s painful for Oracle. Oracle had a horrible second quarter. Hardware sales were down 14% and software sales of 2% didn’t help.

Meanwhile, SAP has got its own problems and the company is looking at HANA as its new star product.

IT analyst Sergio Segal told Business Insider that if HANA succeeds, it will be the first SAP home-built product in decades to do so. “Not one product made by SAP (not acquired) in the last 19 years has proven a success,” he said. “HANA has great potential.”

If Oracle has any say with its joint SAP customers, HANA won’t be the breakout product SAP is banking on.