Oracle Loses Would-Be Customer To SAP Due To Integration ConcernsOracle Loses Would-Be Customer To SAP Due To Integration Concerns

SAP and Oracle are locked in a fierce battle over the enterprise-resource planning software market, with SAP fighting to retain its lead and Oracle hoping to catch up through an aggressive acquisition strategy.

And in a close battle, every success, no matter how small, is celebrated. That's why SAP is announcing today that it beat Oracle in a bid for the business of Sport Chalet, a $350-million-a-year retailer. One of the biggest turnoffs to Oracle, says Sport Chalet CFO Howard Kaminsky, was -- ouch -- lack of integration between Oracle financial applications and the retail apps of Retek, which it acquired about 18 months ago.

SAP's offering for the retail market, by comparison, "was ahead of its time in that a lot of pieces were integrated," Kaminsky says. Oracle was a close runner up, he says, but Sport Chalet was concerned that an employee in accounts payable, for example, would see a different screen then a buyer on the merchandising side, even if the data was the same. "It wasn't like Oracle couldn't do everything; it just felt like SAP had an edge," he says.

Such impressions on would-be customers aren't good for Oracle, as the potential difficulty of integrating its myriad acquisitions is the biggest question hanging over its success in ERP. With the Sport Chalet deal, SAP also is gloating over the win of a "midmarket" company, or one under $1 billion in revenue, which is key to SAP's aggressive plans to grow from 35,000 to 100,000 customers by 2010. "We went out and looked at all the usual software companies that relate to retail," Kaminsky says. "At the time we didn't expect SAP to be in the running; we didn't know they were that interested in the middle market. They came back very aggressively and said they were very interested."

Sport Chalet plans to replace multiple disparate, homegrown finance and merchandising systems with the newest release of mySAP ERP, and expects the package to help get it in compliance with Sarbanes-Oxley. BearingPoint will do the implementation. Sport Chalet's 45 stores are located in Arizona, California, and Nevada, and it sees SAP as the platform to support further expansion.

But the implementation won't be one of the seven-day deals SAP's Shai Agassi says he envisions for midmarket ERP. Like any typical big ERP project, it's scheduled to take place over 10 months.