SAP has had no problem criticizing Oracle’s growth strategy for favoring acquisition over innovation. However, we recently questioned whether that opinion would change with two new SAP CEOs in the picture. Co-CEO Bill McDermott, who along with Jim Hagemann Snabe has promised a faster turnaround in new SAP products, was recently quoted as saying, “If an acquisition made sense, we would not shy away from it.”
SAP announced Wednesday a $5.8 billion deal to buy software maker Sybase, emphasizing its ability to help SAP in the mobile applications market. But is this an acquisition that makes sense?
Some analysts and investors have doubts about the steep price, and others are waiting to see how well SAP will actually take advantage of the database and mobile opportunities this acquisition could provide.
While SAP is stressing the importance of the acquisition for its place in the mobile market, there’s also the idea of being able to compete with Oracle. Currently, SAP runs many instances on Oracle databases, but now, as blogger Joe Kendrick puts it, “SAP becomes Oracle East,” with the ability to offer a ERP-middleware-database-development tools stack.
ZDNet’s Larry Dignan also examines SAP’s plan to compete with Oracle, and wonders if this is just the beginning of a long string of acquisitions.
“It has been suggested by a few observers that the Sybase acquisition has a heavy component of SAP chairman Hasso Plattner’s urge to stick it to Oracle. For better or worse, SAP is now in the database business.”
Ellison was once quoted as saying that “others would be foolish not to try” Oracle’s aggressive acquisition approach. But would he still say the same thing now?