Competitive Landscape
SAP competitors are primarily in the Enterprise Resource Planning Software industry. In this field, Oracle Corporation is SAP's major competitor. SAP also competes in the Customer Relationship Management, Marketing & Sales Software, Manufacturing, Warehousing & Industrial Software, and Supply Chain Management & Logistics Software sectors.
Oracle Corporation filed a case against SAP for malpractice and unfair competition in the California courts on 22 March 2007. In Oracle Corporation v. SAP AG Oracle alleged that a Texas subsidiary, SAP TN (formerly TomorrowNow before purchase by SAP), which provided discount support for legacy Oracle product lines, used the accounts of former Oracle customers to systematically download patches and support documents from Oracle's website and appropriated them for SAP's use. Later SAP admitted wrongdoing on smaller scale than Oracle claimed in the lawsuit. SAP has admitted to inappropriate downloads; however the company denies the theft of any intellectual property.
SAP claims to grow organically in contrast to its main rival, Oracle, which has spent close to USD 40 billion during 2004–2010 acquiring many competitors. SAP was able to increase its annual profits by 370% since 2002.
In a departure from its usual organic growth, SAP announced in October 2007 that it would acquire Business Objects, a market leader in business intelligence software, for $6.8B.
SAP provoked controversy and frustration among its users in 2008 by raising the cost of its maintenance contracts. The issue was the subject of intense discussion among user groups.
The resulting pressure saw SAP and SUGEN (SAP User Group Executive Network) agree to a major benchmarking exercise to prove the value of the new support pricing policy to customers. In December 2009, SAP delayed its Enterprise Support price rises until agreement had been reached on the benchmarks and KPIs (Key Performance Indicators).
In January 2010 SAP did a U-turn (reversed its direction) on Enterprise Support and reintroduced its standard support package for customers, saying the move was “a demonstration of its commitment to customer satisfaction”. The move to reinstate standard support – at 18 percent of annual license fees, “will enable all customers to choose the option that best meets their requirements,” the company said. SAP has also announced that it is freezing prices for existing SAP Enterprise Support contracts at 2009 level.
Read more about this topic: SAP AG
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