by Thomas Wailgum

Oracle vs. SAP: Battle of Fall 2010 Balance Sheets

Feature
Oct 28, 2010
Business IntelligenceCloud ComputingCRM Systems

A head-to-head examination of how the two software giants' revenues, executives and strategies fared during their most recent quarters.

Everyone loves to pit Oracle and SAP against one another—including the executives of the two behemoths that sell ERP, CRM, BI and supply chain software.

Now that SAP has released its third-quarter 2010 earnings (Oracle did so in September), now is as good a time as any to break down—in a head-to-head balance-sheet battle—just how each fared, as CIO.com has done previously.

In addition, we’ll look at the most memorable earnings call quotes, examine a couple of big, scary numbers, and analyze the upcoming Oracle v. SAP trial of the century.

Two things to note: Oracle’s and SAP’s fiscal years don’t run on the same calendar periods. Therefore, this table compares Oracle’s Q1 FY 2011 numbers (U.S. Generally Accepted Accounting Principles, GAAP) vs. SAP’s Q3 FY 2010 numbers (International Financial Reporting Standards, IFRS). “Change” compares the most recent quarter’s results to the quarter of the fiscal year previous.

Total Revenues / Change

Oracle

EDGE

SAP

$7.5 billion / +48%
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$4.1 billion / +20%

Net Income / Change

Oracle

EDGE

SAP

$1.4 billion / +20%
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$694 million / +12%

Total Operating Margins / Change

Oracle

EDGE

SAP

26% / -8 percentage points
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24% / -1 percentage point

Software Revenues / Change

Oracle

EDGE

SAP

$1.3 billion / +25%
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$903 million / +25%

Service & Support Revenues / Change

Oracle

EDGE

SAP

$3.5 billion / +11%
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$3.2 billion / +20%

Meet or Beat Analyst Expectations?

Oracle

EDGE

SAP

Earnings and software license growth beat analyst expectations.
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Earnings didn’t meet analyst expectations.

Earnings Conference Call Quote

Oracle

EDGE

SAP

“There really is no such thing as the hardware business or the software business. The business that we’re in is a systems business and we have to provide support in the systems business. We have to sell systems.”

-CEO Larry Ellison
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“Unlike others, we work closely with our partners. We do not alienate them.” -Co-CEO Bill McDermott

Mentions of the Other Vendor During Earnings Call

Oracle

EDGE

SAP

Mentions of SAP by Oracle Execs: 20
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Mentions of Oracle by SAP Execs: 4

That Depends on How One Defines “Open”

Oracle

EDGE

SAP

“Our customers are realizing that it’s far better to buy open and integrated solutions from us rather than discrete components from half a dozen separate vendors.”-Co-president Safra Catz (earnings call)
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“Our strategy is validated, as companies want to be real-time, unwired, and they want to partner with a company that has an open ecosystem—one that does not lock customers into a stack but gives them choice.” -Co-CEO Bill McDermott (earnings call)

Big, Scary Numbers to Behold

Oracle

EDGE

SAP

$8.8 billion: Operating cash flow on a trailing 12-month basis
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$3.3 billion: Operating cash flow for the nine months in 2010

The Oracle v. SAP Trial Is On!

Oracle

EDGE

SAP

Has Larry Ellison gone too far or has he been reading The Art of War again? Either way, IT’S ON, baby!
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SAP raised the white flag to Oracle, and Oracle still won’t cede its (perceived) high moral ground. Perhaps the Bill Gates defense could work?

New Marketing Campaign

Oracle

EDGE

SAP

“Software. Hardware. Complete.” (Apparently the suggestion “One Stack, Two Stack, Red Stack, You Stack” is not being used.)
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“Run Smarter” offers flashy campaign. (Uh oh! Another company claims ownership over “Run Smarter” and is suing SAP. How ’bout “Litigate Better”?)

Splashy New Hire / Ex-Exec Lands Where?

Oracle

EDGE

SAP

Mark Hurd named co-president / Former co-president Charles Phillips named CEO of Infor
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Dr. Angelika Dammann named to executive board / Former CEO Leo Apotheker named CEO of HP

Rumor Mill

Oracle

EDGE

SAP

Oracle is buying Informatica. Nope, Larry is picking up Salesforce.com. Wait, check that: It’s definitely VMware. Guess not. Holy Cow, Oracle’s buying EMC! Nope.
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Lots of M&A scuttlebutt surrounding SAP, HP and IBM. Co-CEO McDermott’s response: “I think [rumors] have been going on for about 40 years now. We are an independent company.”

Table by Thomas Wailgum