JEFF NOLAN RESPONDS TO OUR POST REGARDING SAP’S ATTACK ON ORACLE

Re dueling analyst firms, it’s not
an effective tactic to allow your competitor to mistate the facts and
the research to make mistruthful claims in their advertisements. Of
course we are going to discredit the Nucleus research, because if for
nothing else it is entirely discreditable.

First argument: Their ROE calculations are inaccurate, and they also
divert from the numbers that are published in reputable financial
industry sources like Bloomberg and Hooverss. For example, they use one
time charges for M&A in their ROE calculation… these are non-cash
expenses.

Second argument: they used a sample size of 81 customers, while the Stratascope research used a sample size of 580.

Third argument: Even if you take the the ROE that Nucleus issues at
face value, the return to shareholders for there group of 81 SAP
customers was 89.1% vs. 37% for the S&P 500. You tell me, did our
81 customers outperform their peers? Yes.

Lastly, Nucleus has a record of being biased against SAP. All 8
reports they have published were negative while all 16 reports on close
competitors has been positive. This firm is a bought-and-paid for
attack analyst, nothing more, and their research should be ignored
because it’s an extension of the companies that hire them.

We do have a lot more up our sleeve, as evidenced by the fact, I
repeat *fact*, that we have increased our market share against Oracle
in the last two years. We continue to take their customers away from
them (we recently had the single best quarter in our history).

Fusion applications exists as a set of powerpoint slides, Oracle
hasn’t delivered them and credible analysts, like Gartner, are starting
to see them for what they really are, a massive rewrite of the
applications that Oracle has spent $20 billion acquiring. Their core
database business is growing at GDP and under assault from IBM,
Microsoft, and Open Source, and there are no signs that this is abating.

Despite all of the above, I continue to treat Oracle as a serious
adversary, if anything because they are highly unpredictable. However,
anyone who looks at the facts objectively is certain to come to the
conclusion that it’s more up to Oracle to figure out how to compete
with SAP than the other way around.

UPDATE: Several readers of this blog have downloaded the Attack Screener
this morning, and used it to try and predict the outcome of SAP’s
attack on Oracle. I wanted to issue a cautionary note on the results.
The Attack Screener is a subjective tool designed to quickly gauge
top-of-mind impressions. And while the results of the screen may not
look good for SAP, they by no means should be taken as a complete and
thorough analysis. This can only be accomplished by utilizing the
entire workbook. And for what it’s worth, while I still favor Oracle in
this fight, I wouldn’t bet against Nolan and SAP.

UPDATE: Click here to read Nucleus’s Ian Campbell’s response to Jeff Nolan.

Learn how to wage and win battles for market share. Download the free PDF preview of the Art of Attack. Just click to get the PDF. There are no forms to fill out, you don’t need to leave your email
address. No annoying questions to answer. Just click and get your PDF.