The dispute between Oracle and PeopleSoft is placing
pricing pressure on suppliers throughout the enterprise
applications market, SAP executives said yesterday.
"We are faced with some extraordinary things that people are
willing to do on the other side, that requires from us a certain
amount of flexibility," said Leo Apotheker, SAP's president of
global field operations.
SAP won several significant deals this quarter with companies
that included Maytag and Newell Rubbermaid.
"We beat Oracle, where they substantially discounted beyond the
market norms," said SAP America chief executive officer Bill
McDermott.
SAP CEO Henning Kagermann expressed his misgivings about
Oracle's unsolicited bid for PeopleSoft.
"We have seen this consolidation in the market, and we are a
little concerned that the way it was handled was not very
professional. Normally, our industry relies on trust - long-term
trust - from our clients," he said. "We feel there is short-term
damage to our industry."
Last month SAP launched an advertising campaign aimed at wooing
disenchanted PeopleSoft and Oracle customers to prime future
opportunities for the company.
"The campaign cannot deliver any short-term results because the
cycles are still going to be the same. A customer who has to make
an important decision like this will take his time," Apotheker
said.
"What it did generate is the opportunity to talk to a certain
number of customers using competitive products, and these talks are
continuing."
Apotheker admitted he was unable to predict how long the
industry's price warfare will continue, saying that it depended
on how long the Oracle-PeopleSoft battle continues.
"If it's going to drag on for another year or so, and that's
possible, then I do believe the pricing pressure will cease.
There's an element of suicide here," he said.
Stacy Cowley writes for IDG News Service
