Oracle bid helps SAP, CEO says

Uncertainty surrounding Oracle Corp.'s hostile bid for PeopleSoft Inc. has helped increase customer interest in products from rival SAP AG, although the extent of any resulting migration will only be known in the next four to six months, according to Henning Kagermann, chief executive officer (CEO) of SAP in Walldorf, Germany.

"What companies are doing is look at alternatives, but you cannot expect a company to immediately jump to another vendor because the investments made are huge," said Kagermann. Kagermann addressed the press Monday in Bangalore, where SAP has the largest software development facility outside Germany. Oracle in Redwood Shores, California, made a hostile bid this month for Pleasanton-based PeopleSoft Inc. At the end of May, PeopleSoft had announced its plans to acquire Denver-based J.D. Edwards & Co.

"Normally the sales cycle in our industry is between six and nine months," Kagermann said. "So what we are seeing is some interest, some demand, some leads coming into the pipeline." Whether this interest translates into business will only be known in the fourth quarter after four to six months, Kagermann added.

"Companies worldwide are confused about this consolidation because they don't know what is going to happen to their products and to their investments," Kagermann said. "That is why we are doing this advertisement and telling the world that there is this very reliable, trustworthy market leader who can help them to shift easily from their PeopleSoft or Oracle or whatever product to SAP."

The proposed acquisitions are not likely to come under antitrust scrutiny in Europe, as SAP has close to a 70 percent market share, and there is hence a clear market leader, according to Kagermann.