Who’s taking ERP market share from SAP, Oracle?

With Oracle’s less than stellar earnings announcement this week, there’s been a lot of back-and-forth on whether Oracle is taking market share from SAP.

Figures from Gartner Research’s most recent North American ERP market share report — which ranks the vendors through 2008 — show that doesn’t seem to be the case.

SAP’s share of the North American ERP market decreased from 28.3% in 2007 to 26.8% in 2008. In turn, Oracle’s decreased from 12.9% in 2007 to 12.7% in 2008.

SAP and Oracle are still one and two, respectively, in the North American enterprise software market by a wide margin. But in looking at these numbers, the more interesting question is, who’s taking market share from them?

According to Gartner, Sage’s ERP market share increased from 7.2% in 2007 to 7.9% in 2008. Infor stayed level year-over-year at 6.1%. And “other” vendors grew from 41.7% to 42.7%.

It’s interesting to look at the Tier 2 vendors. Panorama Consulting conducted an ERP software comparison back in March that indicated Tier 2 vendors were holding their own with Tier 1’s in terms of customer satisfaction. Customers were most satisfied with SAP, followed by Tier 2 vendors, then Microsoft and Oracle.

And as evidenced by the SaaS strategy announcements of SAP and now Oracle over the past couple of weeks, it seems on-demand vendors are now a threat as well.

Most recently, Oracle CEO Larry Ellison did a complete 180 on the SaaS-front, now boasting that in less than a decade’s time, Oracle will be the number one on-demand software vendor. It’ll sell its Fusion Applications — its new generation business suite– on-demand and on-premise.

SAP hasn’t expressed desire in such a coup. In keeping with its enterprise strategy of increasing its footprint within its installed-base, SAP will only sell on-demand software to them. For the smaller guys, it’ll sell Business ByDesign — when it’s ready.

Up until now, SAP and Oracle have been plenty profitable without a full-line of SaaS applications. But are the Tier 2 vendors’ successes in economically-troubled 2008 an indication that customers are looking for some less-expensive options?