SAP vs. Oracle: Battle of the Balance Sheets
For enterprise software vendors, the calendar year that was 2008 has mercifully closed. But now comes the difficult part: vendors announcing their Q4 earnings, a period in which the global economy imploded and companies' desire for large ERP, CRM, BI and supply chain projects plummeted. 
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Two of the market's biggest players and fiercest rivals—SAP and Oracle—not only continued their nasty courtroom feud over now-defunct TomorrowNow, but they also delivered not-so-horrific results, displaying admirable levels of resilience amid the doom and gloom. (Those software salespeople must have been cutting some fantastic deals!)
So in the sprit of their ultra-competitive natures, let's stack the two giants' most recent quarters up against one another in a head-to-head balance-sheet battle, as well as examine the outlook for the rest of 2009. (Two things to note: Oracle's fiscal year ends during the summer, while SAP's at the end of calendar year, so I'm actually looking at Oracle's Q2 FY 2009 numbers vs. SAP's Q4 FY 2008 numbers; "Change" compares the most recent quarter to the quarter the year previous.)
Total Revenues / Change
Oracle: $5.6B / +6%
SAP: $4.5B / +8%
Software Revenues / Change
Oracle: $4.5B / +7%
SAP: $1.7B / -7%
Net Income / Change
Oracle: $1.29B / -0.5%
SAP: $1.1B / +13%
Total Operating Margins / Change
Oracle: 35% / +1 percentage point
SAP: 37% / +2 percentage points
Executive Quote on Results
Oracle: CEO Larry Ellison takes a shot at competition: "This quarter was conspicuous in a series of competitive wins against Salesforce.com." And hints at more acquisitions: Looking at a "potential opportunity for large acquisitions, if the price is right."
SAP: Co-CEO Leo Apotheker: "It could have been the best year in SAP's history, but since September we have been talking about a new reality in the world's economy. Our main focus is reducing operating costs."
Financial Insights
Oracle: It does 55 percent of its business outside the U.S. That's important because any sizable currency fluctuations directly impacts Oracle's coffers. In fact, the strengthening U.S. dollar cost the company about $0.03 per share in earnings in the most recent quarter.
SAP: Execs won't offer analysts a specific outlook for revenue from software and software-related services for 2009.
Layoffs Ahead?
Oracle: 500 (so far, according to reports)
SAP: 3,000 (in total, by the end of 2009)
Big, Scary Numbers to Consider
Oracle: Oracle had $7.4 billion in cash and equivalents at the end of November 2008.
SAP: Some customers aren't paying their bills: SAP's "days sales outstanding," a measure of the average time it takes a customer to pay an invoice, has increased to 71 days, from 66 in 2007.
Nagging Questions for 2009
Oracle: Will we see finally see next-gen Fusion Apps Suite? Will you ever settle TomorrowNow suit with SAP?
SAP: What's the status of Business ByDesign? Any maintenance relief in sight? Will Oracle ever settle the TomorrowNow suit?!
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