In today's Cloud Wars Minute, I compared the diverging strategies of SAP and Oracle as the AI revolution reshapes enterprise tech.

Highlights

00:22 — SAP versus Oracle. It was interesting on SAP's recent Q3 earnings call: the financial analysts seemed to be really preoccupied with this notion — was SAP going to get into the hyperscale business? Or was the fact that Oracle is in the cloud infrastructure business something that SAP sees as a disadvantage? I think those are entirely the wrong questions.

01:00 — SAP is never going to go in that direction. Where SAP's future is — and what CEO Christian Klein kept coming back to over and over, and I believe very persuasively — is it's all about the data, and AI, and agents, and the way that apps are evolving to pull all of that together. It's about the business data cloud. It's about certain partnerships.

01:45 — It reported a 22% increase in cloud revenue, but in constant currency, that was 27%. Its current cloud backlog was up about 27%. So, strong numbers for them — much, much faster than Oracle's apps business is growing. But Oracle thinks it is going to be ahead on the AI front, and with the database, infrastructure, and its vertical market apps, it thinks it's going to have a real case to be made here.

02:27 — But from SAP’s side, Klein was asked about the hyperscale business. Really? His point was: no, no, no, this is not going to happen. Instead, we're going to double down — triple down — at SAP on the things that we do best and that our customers are looking for us to deliver.

03:44 — A big point that Klein made about this — and why he's so confident about SAP's ability as he said, we are seeing more and more that the buying decisions are being made around business outcomes. That's the focus. Certainly, the CIO is involved, but the decisions are moving up into the C-suite and the boards of directors.

05:08 — I think the competitive dynamics between SAP and Oracle are going to really intensify over the next two or three years because the opportunity here around the AI Revolution, with agents, AI data, and applications, is incredibly big and powerful.

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