While Oracle (ORCL) may have a large task ahead of itself — integrating the billions of dollars’ worth of applications it bought from other companies into a cohesive product — the enterprise software giant’s success, or lack thereof, may irrelevant to competitors IBM (IBM) and SAP (SAP), who will lose market share to Oracle no matter the outcome.
“Samuel Palmisano told me that IBM is essentially betting that Oracle can’t integrate. If they can, then IBM is very poorly positioned. If Oracle can’t, then IBM is almost ideally positioned to pick up the pieces,” explained Richard Williams, a senior software analyst for Cross Research LLC. “The fascinating part, from my point of view, is in a way it doesn’t matter. The reason I say that is because by the time we find out whether Oracle is bluffing or not, it will be too late to try to avoid dealing with them. In other words, by the time you know whether they are real or not, you will have already had to make your decision as to whether to embrace its technology or not.”
According to Williams, Oracle has at least a three-year pass before competitors begin to challenge its integration ability, effectively offering the company a considerable amount of time to take market share away from IBM and SAP.
“The interesting twist is that for every dollar of license revenue they take away from SAP, it takes away $3 to $5 of integration and consulting business from IBM,” he said. “Thus, IBM is actually the bigger loser as this thing progresses.”
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