As you may have heard SAP has been making a lot of noise lately with their improved database technology, this was described in Hasso Plattner’s keynote address for Sapphire and in subsequent new articles there is a lot of buzz about how this finally will supplant Oracle as the DB leader. The reality is though that even though the technology is impressive and certainly looks superior (all we have seen are demos ) this is not something we have not heard before. For those that don’t remember we have been hearing about SAP’s database technology for some time now. Back in 2007 a respected analyst wrote an article “Putting the Database on a Diet: The “Oracle Killer” Positions SAP as a Database Pioneer” predicting the demise of Oracle’s database business has become a regular game for many analysts. But of course Oracle is still the predominant database in use today and probably will be for some time, why is that?
Several years ago shortly after Wal-Mart mandated RFID to be implemented, in one of our early research reports we stated that this was not going to be as quickly adopted as some imagined, we saw RFID taking a good 10 years before it was in common use … The reality is that major technology is not easily adopted in the business world, especially when an existing technology that has had a considerable investment already exists. Regardless of how superior the new technology is or what the cost savings are. If you don’t believe me lets take a look at some history :
- SAP DB -SAP released and made available SAP DB (I think it’s now called MaxDB) for free for years, I doubt very many people have ever seen a SAP DB implementation.
- Itanium -Intel developed the Itanium platform a true 64 bit platform who’s performance supersedes the X86 platform. The platform was superior but customers did not buy into it, it was a change.
- OS/2 – IBM OS/2 was the next great Operating system, the first multi-tasking OS for the PC. IBM focused on creating a technical winner, in the meantime Microsoft developed Windows in the background and was a success, OS/2 was a failure. OS/2 was superior technology but the migration to windows was gradual and easier to adopt.
Its no coincidence that change management is a crucial role in larger systems projects, for those of us that have managed large projects we understand that one of the biggest obstacles is changing people not software. Don’t underestimate the unwillingness of people to change. So this coupled with the fact that over the years companies have invested millions in oracle licenses and infrastructure, this is not going away anytime soon.
So what does this mean, I summarize it as follows :
Where a technology exists that is good enough and or has been in place “For ever” there will be little motivation to replace it unless the one of the following occurs :
It must be replaced – PC’s are good examples, upgrades are not Microsoft’s main revenue source related to operating systems, New OS on new PC’s are their bread and butter. Also bankruptcy or discontinuation is another good example. A good example of this was the Compaq Alpha platform ( a superior platform by the way), when HP purchased Compaq the Alpha was discontinued. HP’s hope of course was that these customers would migrate to one of their other platforms but when this type of drastic change occurs these businesses are open to a radical change.
Stealth – An example would be the implementation of a new application that subliminally brings with it new technology. There is a good reason why platform companies are always looking for a killer app to propel their platform forward. This would be an application that is so necessary it will be purchased regardless of some of the changes it brings with it, these type of applications can help to increase adoption of new technology. The reality is that there are very few apps these days that have this type of impact. Let’s roll the clock back, in 1999 when companies were making choices of ERP systems, had SAP only been available to work with SAP DB, this is the platform that would be in popular use today. In our current environment this is no longer possible, companies have made choices on their DB platform and invested millions in developing and hardening these platforms. There is little chance that a company will decide to invest millions in changing this technology as long as it is serving the business need.
Is there an opportunity?
Probably the best opportunity SAP has is to use it’s technology in the development of an SaaS application which can be offered to it’s customers. The reality is that if Salesforce.com changed from Oracle to SAP’s DB, companies would neither care and more importantly maybe not even know. In addition, offering dynamically improved response time in a SaaS application would definitely be noticed, when it comes to SaaS customer focus on the results not how you got them.
So it will be interesting to see how this develops if as Hasso mentioned SAP will market a SQL product based on their technology but I predict it we are not going to see any major change in Oracle’s DB fortunes.
Let me know what you think.
Phillip Avelar is a Senior SCM consultant at Advanced Solutions, based in Chicago. He shares his passion for solving customers problems in his blog posts, industry articles and talks. When he’s not writing, he’s working with customers to develop and apply innovative solutions to common problems in the supply chain.