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Jan 21, 2006


Jason Wood


You know I'm in your camp completely when it comes to the fairness of disclosure. Ellison has a long and storied history of quasi-misleading marketing campaigns.

From an investment perspective though, you should be aware that there's no greater confidence we instituational investors can have in your dominant position than when you take the "high road." Whether the perception is fair or not, once you start engaging in muck raking with Oracle in an aggressive manner, it signals to many that you're taking Oracle's competitive threat more seriously and are less certain in your own abilities to simply out execute Oracle and the rest of the enterprise applications pack.

It's a delicate balance, and I think as long as you focus your attention on pointing out mis-truths versus simple pots shots of your own, SAP will be well served.


It's a fair point, and we'll continue to take the high road by simply focusing on truth and fact-based initiatives.

The other reality of all this is that customers don't like the feuding, it really turns them off everyone involved. We are walking a fine line, we know it.

It's easy to degrade into trash talking, which is pretty much the sum total of Oracle's efforts. I would like to avoid that as much as possible because it does blacken our own reputation. Having said that, we are taking the Oracle threat seriously, given another 6-8 quarters one of these 2 companies is going to come out a winner and the other a loser, but we not less confident in our ability given that perspective. We fundamentally believe that we have earned the right to win and it is with that belief that we feel confident going out and letting the facts speak for themselves, that is if the facts are given an opportunity to be heard.

Brian Phipps

Oracle would seem to be employing a powerful strategy based on the Judo principle of “kuzushi,” or moves intended to break the balance of the opponent. Much deeper than trash talk.

“Kuzushi is very often thought of as simply pushing or pulling . . . [but] . . . is much more than that. For example, kuzushi can also be achieved by breaking the opponent's rhythm, fake attacks, strikes, changes of body position . . . or a sudden change in speed or tempo. A critical element in kuzushi is that it should disrupt more than the body. Kuzushi is very much a mental thing.”

“Another way to apply kuzushi is to set up or force your opponent into a weak position. There are many ways of moving that will result in your opponent responding in a predictable way so that you can anticipate it and take advantage of it.”

The best defense for all this, as you point out, is to have a counter strategy going in, and never just react.

Dennis Howlett

Not gotten around to reading Nick Carr yet? Look forward to the bloodbath...


Hi Dennis,
Actually I have been reading Carr's posts about the use of analyst data.

I thought about commenting on his blog, and may still do so, but I'm not sure I want to throw gas on the fire over there.

The big difference between what Oracle is doing and what we did with the analyst data is pretty straightforward. We went to Stratascope and said "hey, here's a list of our customers, we want you to look at the public companies and compare their profitability to the rest of the market". As it turns out, the profitability that SAP customers achieve is 32% better than the broader market. Now we can debate all day long whether or not the software is the reason for this and we still won't come to anything definitive, but the fact remains that nobody can say that the technology that this group of companies relies upon is not responsible for their greater productivity, when taking into account how they restructure their businesses as part of the implementation of something like SAP. The methodology is really straightforward, Stratascope will tell you how they came to the conclusion.

Oracle, on the other hand, takes research data and cherry picks bits and pieces, or reinterprets the data to fit their agenda. They then take that research remix and put it out in a full page advertisement, never mind that they violated the analyst's rules regarding the usage of the data. They lie.

Carr doesn't really care about any of this, his agenda is that the "IT doesn't matter" and anything he can use to rail against software companies is good in his book. I also take offense to Carr lumping SAP and Oracle together and saying we're both using analyst data inappropriately.

In his own post there is a differentiation but he doesn't bother to dwell on it. What Stratascope said is that they couldn't say with certainty that SAP customers were more profitable because of technology, what Stratascope said of Oracle is that "the press release misleads the public by improperly attributing capabilities and action to Stratascope." There is a big difference between the two and if Carr was intellectually honest about it he would acknowledge that.

Dennis Howlett

Hi Jeff:
Haven't you let the cat out the bag by saying:

"...the fact remains that nobody can say that the technology that this group of companies relies upon is not responsible for their greater productivity..."

Did anyone ask them?


all the time. Case studies, customer design partners, ASUG, account eams, you name it.

The Stratascope research was a statistical analysis, the data is what it is. Period. The results of that statistical analysis are what they are. Period. We didn't misquote Stratascope and they didn't say we misquoted them or that we mislead anyone, they saved that criticism for Oracle.

james governor

jeff- perhaps if SAP was more willing to brief or talk to industry analysts at smaller firms your point about fair disclosure would have more weight. is your agency still burson marsteller? you talk about full disclosure?

there is no need to "hammer" us or "go hard" on us - just talk to us.


Great, I just added your blog to my blogroll and put you in our blogger database.

james governor

that's great jeff, thanks. evidently you get it, in spades.

i would still like to see more attention to smaller industry analyst firms, but calling myself a blogger means i get some attention from SAP then i can certainly live with that.

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