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Follow UsJennifer Tan
SINGAPORE: Oracle Corp., the world's second-largest software maker, said its Asia ex-Japan revenues could match arch-rival SAP AG's regional sales within three years as it aggressively woos the German firm's customers.
Oracle is the world's largest maker of database software, but ranks behind SAP in the market for business applications software, which automates office processes such as payroll, inventories and budgets.
"Oracle's (applications software) business in Asia ex-Japan has been growing faster than SAP's," Craig Jones, Oracle's Vice President for Enterprise Applications in Asia, told Reuters in an interview on Thursday.
"If you compare our growth rates to SAP's growth rates and assume that they remain stable over the next couple of years, we think we can catch (up with) SAP on the revenue front within the next two to three years," he said.
"By then, we will not only be the largest vendor in terms of revenue, we will have an installed base that is far more significant," Jones added.
SAP's application software revenues for Asia excluding Japan rose 28 percent in calendar year 2004, while Oracle's sales for the region grew 60 percent in its financial year ended May 2005. Including acquisitions, the growth rate was 66 percent.
SAP Asia Pacific spokesman Ben Wightman said its Asia Pacific market share against rivals Microsoft Corp., Oracle and Siebel had risen more than one percentage point every quarter on average from 67 percent in the third quarter of 2004 to 72 percent in the third quarter of 2005, however.. "The distance in our rear-view mirror is growing every day," he added.
International Data Corp. (IDC) analyst Kitcha Ing-udomnoogoon said Oracle could not match SAP's regional applications revenues in the next three years based on organic growth alone.
"But it's possible if you include the growth from the companies they bought. But it will be a challenge for Oracle to manage so many overlapping products from its acquisitions."
OFF SAP AND SAFE PASSAGE
U.S.-based Oracle has been gunning for more than a decade to overtake SAP as market leader by acquiring rivals. The company wants to drive a consolidation of the business software industry as customers cut back their technology spending.
It has spent about US$19 billion over the past two years buying up rival firms, including a $5.85 billion bid in September for Siebel Systems Inc., which makes software that helps companies track and manage their sales force.
Following a survey of more than 900 SAP customers in Asia ex-Japan on Tuesday -- as part of its "Off SAP" programme to win over its rival's clients -- Oracle said it found that many were worried about the complexity of SAP software upgrades and the high costs of owning and maintaining the software.
About 12 percent of the customers contacted requested a meeting with Oracle, and 29 percent asked for additional information, with the highest percentage of responses coming from India, the company said.
"Given the response, we are optimistic we can build a momentum towards making a decision for an Oracle platform. We expect an accelerated number of SAP customers to be added to our pipeline through the course of next year," Jones said.
SAP's Wightman said he was confident SAP would be able to keep its customers, however. It has an equivalent campaign called "Safe Passage", aimed at wooing customers of firms bought by Oracle who are worried about future levels of support.
"We have a (global) pipeline of about 220 Oracle customers ready to switch over, representing revenue of about $1 billion. The pipeline of Safe Passage deals is doubling every month and we've not seen a single customer swayed by the Off SAP programme."