Software giant Oracle is failing to eat into the market share of enterprise resource planning (ERP) leader SAP, according to market analyst company AMR Research.
Oracle's failure to make ground on SAP comes in spite of its $10 billion acquisition of rival PeopleSoft, and its $670 million purchase of retail software specialist Retek.
Oracle made these acquisitions in an attempt to fight off software competitor SAP, which increased its overall revenues by 17% and its share of the market to over 40% in 2004. Although Oracle's annual sales have doubled since the mergers, it is losing, not gaining, ground.
Even after the Oracle-PeopleSoft merger, SAP is still expected to "finish 2005 with more than twice the revenue and market share of the combined Oracle-PeopleSoft," state AMR analysts.
SAP's market share is expected to grow from 40% to 43% in 2005, while the combined Oracle/PeopleSoft share will fall from 22% to 19%.
The ERP market grew 14% in 2004, although part of this was is due to currency movements. Analysts are optimistic about the future growth of the ERP market.
According to AMR, Oracle needs to take advantage of the strong legacy of its infrastructure expertise if it is to increase its market share. Further acquisitions, by Oracle and others, are expected.