Oracle President Says SAP Is In A Reactionary StateOracle President Says SAP Is In A Reactionary State

The No. 2 business-software maker wants to keep the No. 1 enterprise-app vendor on its toes.

Oracle president Charles Phillips says SAP's recent acquisitions suggest that Oracle is dictating the direction the industry is taking. "It's a change in their strategy," Phillips said Tuesday in an interview following his keynote address at the Information Processing Interagency Conference, a gathering of government IT managers in Orlando, Fla. "They didn't want to make acquisitions; they said they wanted to innovate. Well, all of a sudden they changed their minds so they're reacting to what we're doing in the marketplace. I think that's good. We're going to keep them reacting in the next few years."

This week, SAP said it would buy Retek Inc., a maker of retail-management software, for $496 million. Shortly after Oracle acquired competitor PeopleSoft in January, changing the dynamics of the business-enterprise software industry, SAP announced its acquisition of TomorrowNow Inc., a supplier of software maintenance and support services for PeopleSoft applications. Many ex-PeopleSoft employees work at TomorrowNow.

Phillips sees challenges for SAP in its recent acquisitions. "They have less experience integrating them than we do," he says.

The biggest challenge Oracle faces in integrating PeopleSoft customers is getting the message out about the benefits of its existing products and future wares based on standardization and innovation, Phillips says. "We've got to be convincing that standardization is good for them," he says.

Phillips' keynote address focused on how organizations must architect information before designing systems. "People are realizing that they want [reliable] information," he said, "not just the latest and greatest best-of-breed application."