John Whelan: Oracle and Microsoft the real winners from ill-considered EU probe of SAP
SAP’s Irish operations in Dublin and Galway, employing 2,300, concentrate on cloud engineering talent for the company's cloud-focused R&D and a support centre in Galway for multi-lingual tech support in the European SME market.
The EU’s competition authority on September 25 raised concerns that SAP may have distorted competition by potentially abusing a dominant market position. But EU commissioner Teresa Ribera leading the investigation doesn’t seem to be up to speed on the market leaders.
While SAP has historically been the market leader, Oracle has recently surpassed it in revenue, and Microsoft holds the largest customer count in the market. Other top contenders and prominent players include Salesforce, Workday, Sage, and Infor, with different vendors leading in specific areas like customer count or industry focus.
The European Commission, which acts as the bloc's competition enforcer, singled out SAP's aftermarket practices for Enterprise Resource Planning (ERP) software used by companies to manage their finances, human resources, supply chains, sales, and procurement.
This investigation is examining whether SAP restricts rivals from offering maintenance and support for its ERP software sold to businesses. If found guilty of infringing EU competition regulations, it could be fined up to 10% of its global revenue. And whereas this could be very damaging to SAP future earnings, more importantly it will inevitably enable its customers to more easily switch to its two main global competitors: Oracle and Microsoft.
Neither Oracle nor Microsoft are currently the subject of a formal EU investigation by the Commission in regard to its ERP systems or the aftermarket maintenance they offer. The EC, in its attempts to offer a level playing pitch for ERP users, is inadvertently holding back the German-owned SAP and opening the door wider for US-owned Oracle and Microsoft.
The EU’s competition watchdog's recent investigations into Microsoft have focused on their Teams software for bundling with productivity suites, not on their Enterprise Resource Planning (ERP) systems.
The simple logic of investigating, at the same time, the three main vendors of ERP software systems and their after-sales service practices for any breach of EU competition rules, seems to have escaped Commissioner Ribera. This would avoid inadvertent damage to one vendor over the other and would avoid damaging the growth prospects of the first company selected for anti-trust investigation, particularly when that first company is a European company.
The market for ERP systems has been relatively stable over the past several years, but AI is changing everything. Vendors are racing to embed AI functionality across their product portfolios and building out an ecosystem that includes centralized data stores, and scalable cloud platforms.
Seismic shakeups to the ERP market share and key vendors are underway, according to analysis from research firm Apps Run the World. Oracle has surpassed SAP in annual ERP revenue, leveraging its cloud and database strengths for AI-driven functionality. Its offerings include Fusion Cloud ERP for large enterprises and NetSuite for SMEs.
And Oracle is perfectly positioned to continue to excel in the highly competitive race to deliver AI-based functionality to ERP customers. Chairman and CTO Larry Ellison described Oracle’s advantage this way: “These other companies say they have all the data, so they can do AI really well. They can build all these AI agents on top of all of that data. The only problem with that statement is they don’t have all the data. We do. The vast majority of it is in an Oracle database.”
Mr Ellison added: “We are the key enabler for enterprises to use their own data and AI models. No one else is doing that.”
SAP has also developed its cloud ERP suite which has yielded revenue growth of 27%, but it will need major investment in developing its AI-based functionality, if it is to keep up with the vast funds available to Larry Ellison at Oracle.
SAP's 2024 Annual Report released in February 2025 shows a significant increase in cloud revenue, with the company expecting between €21.6bn and €21.9bn for 2025, a 26-28% jump from €17.14bn in 2024. The company's strategic pivot towards artificial intelligence (AI) and cloud-focused R&D, is a central theme in the report.
SAP’s Irish operations in Dublin and Galway, employing 2,300, concentrate on cloud engineering talent for the company's cloud-focused R&D and a support centre in Galway for multi-lingual tech support in the European SME market. These roles and ultimately be put at risk through an ill-thought-out European Commission investigation.
