http://youtu.be/WqNyftKXkeU

For those that think that cloud is mainly about Amazon Web Services (AWS), Salesforce.com, Google, IBM, Microsoft Azure, Rackspace, and a list of smaller SaaS and PaaS vendors, think again.  After several years of investment, in the form of their own R&D, M&A, re-educating their channel, and changing internal systems to better support the cloud-style licensing models, Oracle and SAP have arrived.  Consider the facts:

  • Revenue:  SAP, on a trailing four quarter basis, has a cloud business comfortably earning over $1 billion.  Oracle, based on recent earnings call disclosures regarding its cloud business, is tracking to $1 billion, only slightly trailing SAP.
  • SaaS:  Both vendors, through several SaaS vendor acquisitions, and through their own development, have fully fledged SaaS offerings spanning CRM to HCM to some aspects of ERP, with more to come, including vertical offerings.  While both vendors are moving very fast on SaaS, SAP holds a small lead in terms of SaaS business-to-date.
  • PaaS:  Both vendors offer PaaS, and are rapidly adding features.  Their PaaS goes well beyond database for the cloud, though Oracle now has Oracle Database 12c and other DBaaS services, and SAP has HANA as-a-service.  The PaaS offerings, with Oracle showing particular strength in private cloud, include custom development, integration, API management, and 3rd party app marketplaces.
  • IaaS:  While you might consider buying IaaS from Oracle or SAP given the likes AWS, Google, IBM, and Rackspace, you could. Oracle seems well-positioned to take on IaaS business due to its investment in Engineered Systems.
  • UX:  Both vendors have done considerable work in settling on a common user experience (UX) for SaaS.  SAP has committed to its Fiori UX design for SaaS, and Oracle is not just updating its SaaS apps with its common UX, but its on-premise apps as well.

Who should feel the most threatened now that Oracle and SAP are on the other side of their respective multi-year cloud investments, and are selling cloud aggressively?  The first mover SaaS providers, like Salesforce.com, Workday, and NetSuite, who had free ride for several years while Oracle and SAP developed their respective cloud portfolios, will increasingly run into Oracle and SAP, and certainly in enterprise accounts.  Oracle and SAP are also active in open cloud initiatives, such as OpenStack and Cloud Foundry.

Who is winning the cloud race between Oracle and SAP?  It is a dead heat right now.