SAP Answers the Oracle Challenge

SAP NetWeaver datawarehouse customers received an encouraging bit of news with the announcement of the integration with NetWeaver and Teradata's database. Many high-intensity users of both Teradata and SAP have been waiting for the ability to more tightly integrate and consolidate their warehousing efforts. This bodes very well for CTOs and CIOs looking leverage the considerable investments made to-date in both platforms.

The fundamental market issue addressed by the alliance is the unprecedented growth in the volume of data being analyzed and used for customer insight among large, global firms. Recent findings from Forrester Research indicate that Teradata is in a class by itself at the extreme range of the high-performance database system market. Teradata supports databases ranging from 6 terabytes to 130 petabytes. According to Teradata's CEO Herman Wimmer, the overlap between Teradata's customer base and SAP's customer base is nearly 80% — a fertile market for cross-selling and upselling.

The "back story" of the alliance, however, lies more in the long term implications to Oracle and IBM. SAP and Oracle enjoyed a symbiotic, perhaps even parasitic relationship during the 90's as SAP build its applications business virtually on top of Oracle's database while Oracle essentially ceded the applications space to SAP. This deal puts one more nail in that relationship.

Oracle's recently announced acquisition of Sun places it fully in the face of IBM's enterprise initiatives. Oracle and IBM, with fully integrated technology stacks from database platforms to full-scale business applications, will see the alliances between SAP and Teradata as potential threat and will likely step up their efforts to defend their respective turfs in the Global 50.

Potential outcomes? SAP and Teradata could extend the alliance even deeper, potentially leading to the introduction of a third partner like SAS for the data analysis and data manipulation market. Perhaps a roll-up of SAP and Teradata? Oracle will likely counter the potential threat from SAP / Teradata, along with IBM's massive move into analytics, with additional investments in data analysis capabilities.

Source: GLG