Last night, rumors began spreading that John Wookey, the former head of applications development at Oracle, has accepted a new post at Oracle archrival SAP. Today, SAP confirmed the news. Wookey, who left Oracle 13 months ago for reasons that the company has never disclosed, is now Executive Vice President of Large Enterprise On Demand at SAP. In his new position, Wookey will play a critical role in crafting the software as a service (SaaS) capabilities of SAP’s flagship products. That, by extension, will affect how SAP competes with Oracle for enterprise accounts.
According to an SAP spokesman, Wookey began work at the German software giant this Monday. He is reporting to Jim Hagemann Snabe, a member of the company’s executive board who is responsible for development of its SAP Business Suite applications and NetWeaver middleware products. In a statement issued today, SAP said that “Wookey will work with several of our large enterprise on-demand solution offerings (including SAP CRM on-demand solutions) and develop more relevant on-demand offerings. It is our aim to unite these offerings with a singular strategy for increased innovation and enhancement under Wookey’s leadership.”
As this quote indicates, SAP intends to get much more serious about creating a compelling SaaS strategy for large enterprises over the next several years. Does this mean that SAP will unveil a comprehensive hosted product for enterprises similar to its Business ByDesign for mid-sized companies? I sincerely doubt it, as the scope and complexity of such a product would make it ill suited for delivery via a 100% SaaS model. What is more likely is that SAP will, over time, move Business Suite to a hybrid “software plus services” model in which new capabilities are delivered via the Internet cloud. This model, which is similar to the one that SAP ally Microsoft is pursuing, could make it easier for Business Suite users to deploy new functionality.
As Wookey shapes the SaaS contours of SAP’s enterprise products, he could provide the company with some competitive differentiation from his previous employer. While Oracle is no slouch when it comes to hosting its on-premises applications for customers, it is skeptical about the ability of any vendor to make money from products that are “SaaS only”. That does not mean that Ellison and his crew aren’t funding SaaS projects, as they are running several of them. It does mean that SAP could, with Wookey’s help, distinguish its approach from Oracle’s in this space.
In short, Wookey’s new post at SAP creates the possibility for one more showdown between the two behemoths of the ERP market. Is Oracle right about SaaS being a useful software design concept, but a questionable model for selling applications? Or will SAP prove that it can make money on SaaS and, in the process, get a leg up on its most bitter competitor? It will be interesting to see if Wookey, who is considered one of the world’s brightest software designers and development managers, gets a chance to answer that question.