Google, in a big turn of events, announced that they’re switching from Oracle to SAP. This announcement coincided with a Supreme Court ruling that favored Google, against Oracle. Google and Oracle were involved in a lawsuit involving Android intellectual property that ultimately sided for Google at the Supreme Court level here in the United States. At the same time, the Supreme Court made their ruling in favor of Google. Google announced that they were getting rid of Oracle as their enterprise software technology and moving to SAP.
SAP vs Oracle
Google is one of those Fortune 500 organizations that are highly likely to implement either SAP S/4HANA or Oracle ERP Cloud. Most Fortune 500 organizations look at one of those two products, sometimes they look at others. These are two very common ERP systems that are considered for those types of organizations. The reasons companies that size and complexity tend to gravitate to SAP and Oracle is because they are tier one systems that are very broad.
These systems are very robust, and they’re built to scale for large organizations. They also provide complete, hearty end-to-end business processes that can handle multifaceted organizations like Google or any other sort of Fortune 500 organization. When an organization like Google makes a change from one big ERP system to another, that’s very significant, because that’s a massive change and most organizations don’t make that type of transition very often.
Certainly, the lawsuit could be the key reason why the change was made, but it also begs the question of what other types of functional fit or what other types of technology needs was SAP able to meet that Oracle was not. SAP and Oracle, although they’re commonly used by the same type of organizations, they’re actually very different solutions. They are very different companies with very different strengths and weaknesses.
Scale vs. Flexibility
One of the biggest decision points and differentiators between SAP and Oracle is the tradeoff between scale and flexibility. Not to say that those are necessarily mutually exclusive, or you can only have one or the other, in general, one product is better at scale, the other product is better at flexibility.
Organizations, like Google, that are very large are looking to scale even further to have become one of the largest organizations in the world. They oftentimes turn to a product like SAP S/4HANA because it’s built to be a repeatable, standardized, common operating model, that will help scale an organization, provide efficiencies, and standardization that will help continue the growth of a large organization. Oracle, on the other hand, tends to provide more flexibility.
Oracle tends to be the more flexible of the two which provide some scale, but it is more focused on providing flexibility and being able to modify or tweak business processes and technologies in a way that supports whatever direction you may want to go as an organization. On the contrary, SAP also has some flexibility, but it’s better known for its scale, whereas Oracle has some scale, but it’s better known for its flexibility.
In the end, whether or not that was a key determinant of why Google chose SAP over Oracle, I don’t exactly know, but that tends to be one of the big decision factors that large organizations like Google face.
Maturity of Cloud Solutions
The next thing we need to think about as we’re evaluating SAP vs, Oracle, is the maturity of the cloud solutions. They’re both moving to the cloud with S/4HANA on the SAP side, and Oracle ERP Cloud, but they’re not equal in terms of the maturity of those cloud solutions.
SAP actually has multiple deployment options, they tend to deploy as for S/4HANA in either on-premise situations, fully in the cloud, or some sort of hybrid. Oracle, on the other hand, tends to push very heavily into the cloud and most, if not all, Oracle deployments that we see are cloud-based deployments.
It’s just the way the two deployment models tend to work for those two vendors. It all really depends on what type of deployment model you’re looking for, but when we look at the pure maturity of the functional capability of cloud solutions, that’s a big differentiator between SAP and Oracle.
SAP is relatively new to the cloud, just three or four years ago, began that journey with S/4HANA in the cloud as an option, whereas Oracle has actually been at it for a long time. They had their fusion product from about a decade ago, which was sort of a false start, of moving to the cloud.
The good news in that failed launch of Oracle Fusion back 10 years ago, is that it actually gave them a head start to cloud deployment of a cloud solution. Some of the maturity that you don’t see yet in S/4HANA, is now available in Oracle ERP Cloud because they’ve been doing it for longer. This is why it is important to think about and really consider looking at both products and looking at the capabilities you get with the product and what you’re not getting.
There are certain capabilities that are missing from both products and they’re simply not as mature as the older legacy products, especially in the case of SAP. Now, to be fair, with SAP, it’s not just S/4HANA, you have to think about it, there’s other solutions out there that help plug some of those gaps and some of those holes that you might find in S/4HANA.
For example. acquired Ariba to address some of the procurement capabilities that larger organizations need. They’ve also acquired Success Factors to provide more depth and robust HR processes for the HCM aspect of enterprise technologies.
SAP in recent years has largely grown its capabilities through acquisition, whereas Oracle has focused more on building some of those capabilities in Oracle ERP Cloud, which is ironic because 10 or 20 years ago, the opposite was true. Oracle was out buying JD Edwards, and Siebel, and some of these other ERP providers, trying to patch together an overall solution.
Nowadays, they’ve migrated to more of a flagship Oracle product now augmented by Oracle and offer NetSuite for the small to mid-market. You need to really look at the capabilities, the maturity of those different systems, and make sure that you’re focused on not just picking the software that you want, or that you think is the best fit for you.
One of the interesting things to think about when you’re evaluating SAP and Oracle is that one of the main reasons why Google said they moved from Oracle to SAP is because Oracle wouldn’t certify their product if it was hosted in Google Cloud. Whereas SAP would, meaning they would basically allow deployment in Google Cloud.
This is of course important to Google since they are trying to promote Google Cloud and trying to become a viable alternative to Amazon Web Services, Azure, and some of these other big cloud hosting providers.
SAP has proven to Oracle and other organizations that they have more flexibility in how you can deploy their cloud solutions. We’ve seen this with our customer base as well, they don’t push you to the cloud necessarily, instead, when you do decide to go to the cloud, they give you multiple deployment options and multiple hosting options in terms of how you host that solution.
SAP allows you to deploy it on-premise or in some sort of hybrid model as well if you prefer, whereas Oracle is a bit more rigid in the way that they will allow you and certify your deployment of the Oracle technology. In the end, this is something to think about as you evaluate SAP versus Oracle.
No matter how large or complex you are, as an organization, SAP and Oracle are not your only options. Even though most organizations do, in fact, implement SAP and Oracle if they’re in the Fortune 500, or even the Fortune 1000. There’s plenty of options out there. The technology market has shifted and changed and advanced so much in which there’s a lot of great tier two options.
You need to make sure you look at the cost-benefit of implementing an SAP or an Oracle and look at the risk-reward of potentially implementing something else. You may also still find that SAP or Oracle is your best bet. A lot of larger organizations are finding that some of these other alternative options are more cost-effective and create more business value in the longer term.
If you’re a manufacturing organization, you may want to consider products like:
If you’re a healthcare provider, you have Epic on the electronic health record side of things and other types of ERP systems that are built for healthcare organizations. The list goes on and on for whatever industry you might be in. There are industry-specific solutions and there’s also functional-specific solutions that you could be considered too. You could be looking at Salesforce for your CRM capabilities. You could be looking at Workday for HCM and Microsoft Dynamics for your back-office financials
There’s a lot of different options you have from both an industry and a functional perspective. Be sure you’re comparing those options to SAP and Oracle and any other options you may be considering.
If you’re looking for more information on how SAP compares to Oracle, and how those two products compare to other systems in the marketplace, I encourage you to download our 2021 digital transformation report. This report contains a wealth of information including system rankings of different systems in the marketplace, on the ERP side, HCM, CRM, etc. It also includes a number of best practices for digital transformations and ERP implementations in general.
I hope you found this information useful. If you have further questions on how a tech decision could affect your ERP software evaluation or questions on software implementation and digital transformation, please don’t hesitate to reach out to me directly. I’m always happy to be an informal sounding board for you and your team.