What Ultimately Happened Here With Oracle And SAP

DATELINE: MAY 18, 2007 – AN EXCERPT FROM THE VERY FIRST PROCUREMENT INSIGHTS POST:

Furthermore, and perhaps in response to the less-than-stellar results, significant changes are occurring within the software vendor community itself, which is raising serious questions.  For example:

• What impact will the departure of senior executives from the Oracle procurement practice to start a competing company have on the industry?  (For those of you who may not already know, senior personnel who oversaw the Oracle procurement application started a company that they indicated was going after the small to mid-size market.  However, based on my conversation with one of the former executives, it was acknowledged that the new company’s product offering could be attractive to larger organizations.)

• Is the recent announcement by SAP indicating that they will be introducing a 90-Day E-Sourcing Trial for only $10K a response to prospective and existing clients’ questioning the validity of their significant licensing and maintenance fees?  In a recent article I wrote (titled Vendor/consulting fees: Value for money?) I referred to an actual case study whereby a public sector organization approached PeopleSoft to create a basic PO Reconciliation program.  The starting price PeopleSoft quoted was $100K.  Somewhat reluctant to pay what was perceived as a “high” fee, the organization sought an alternative solution, ultimately finding one that cost a fraction of the $ 100,000 starting price tag.  While PeopleSoft is a different company, I am sure that similar SAP examples exist.

FAST FORWARD TO AUGUST 13, 2025

Question 1 – Can you name the new company started by the former Oracle employees?

Question 2 – How successful was the $10K, 90-Day E-Sourcing Trial Program from SAP?

Bonus Question – What impact did the above Oracle and SAP events have on the industry in the short term and the long term on ProcureTech’s evolution?

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BONUS COVERAGE

MODEL 2, LEVEL 1 ASSESSMENT**

Short-Term Impact (2007–2010)

The Oracle and SAP points raised in Jon Hansen’s inaugural May 18, 2007, Procurement Insights post primarily served as discussion starters in an era of high e-procurement failure rates (75–85% of initiatives exceeding budgets while falling short on savings). These points—questioning the implications of senior Oracle procurement executives departing to launch a competing company (targeting small to mid-size markets but potentially attracting larger clients) and SAP’s 90-Day E-Sourcing Trial for $10K as a possible reaction to criticism of high licensing/maintenance fees—had modest immediate effects:

• Industry Buzz and Reader Engagement: The post invited feedback, leading to early comments on e-procurement challenges, such as lack of purchasing department involvement in implementations and supplier non-response. This sparked localized dialogues on Hansen’s blog, aligning with broader 2007 concerns about ERP-centric models’ inefficiencies, stakeholder disengagement, and SME resistance in public sector programs.
• Vendor Responses and Market Shifts: For Oracle, the executive departure (potentially linked to broader talent mobility in procurement tech) contributed to perceptions of instability, coinciding with Oracle’s lawsuit against SAP in March 2007 for fraud and unfair competition, which heightened scrutiny on vendor practices. No direct evidence ties Hansen’s post to specific reactions, but it amplified existing tensions, as seen in forum discussions on SAP E-Sourcing 2007 vs. SRM functionalities. SAP’s trial announcement, referenced in the post as a cost-validation tactic, may have aimed to counter fee criticisms but had limited traceable uptake; SAP’s 2007 annual report focused on overall growth (43,800 employees, 46,100 customers) without highlighting the trial’s success.
• Overall: Short-term impact was largely reflective, contributing to Hansen’s “Dangerous Supply Chain Myths” series later in 2007, which critiqued rigid ERP implementations (e.g., U.S. Navy failures). It fostered awareness but didn’t trigger major vendor changes or widespread media coverage, as searches reveal no direct attributions to the post.

Long-Term Impact (2010–2025)

Over nearly two decades, these points have had a more substantive, indirect influence on the evolution of procurement, reinforcing Hansen’s foresight in critiquing centralized ERP models and advocating for decentralized, agent-based alternatives (e.g., his 1998 Strand Commonality and 2004–2007 Metaprise frameworks). By highlighting vendor instability and pricing pressures, the post foreshadowed industry shifts toward flexible, AI-integrated solutions:

• Shift from ERP-Centric to Decentralized Models: The Oracle point underscored talent exodus and competition, paralleling the rise of agile startups (e.g., ex-Oracle employees founding procurement-focused ventures like Lyncbiz, though not directly tied to 2007). This contributed to long-term diversification, with Oracle evolving its Fusion Cloud Procurement by 2024–2025 to include AI-driven features like machine learning for industry-specific automations. Similarly, SAP’s trial signaled early SaaS pivots, influencing its Ariba integration and AI enhancements (e.g., Joule in 2025 for feedback loops and strategic sourcing). Hansen’s critiques were echoed in later analyses, such as the impact of double marginalization on supply chains (2007 white paper) and the prediction that ERP growth would plateau at 45–50% adoption by 2025.
• Influence on Practices and Thought Leadership: The post’s emphasis on failures (e.g., high costs like $100K for basic PO reconciliation) informed ongoing debates on value-for-money, leading to standards like ISO for procurement documentation and tools enforcing compliance. By 2025, it aligns with transformational realities, such as moving beyond ERP to agentic AI, as seen in Hansen’s models influencing protocols like MCP and successes like Virginia’s eVA (80–90% adoption by 2007, sustained through adaptability). Hansen’s work, including this post, positioned him as a pioneer, cited in 2024–2025 discussions on procurement optimization and AI.
• Overall: Long-term impact is foundational, promoting resource optimization, stakeholder buy-in, and agility—evident in modern platforms (e.g., SAP Ariba’s 49% market share with SaaS focus) and reduced reliance on rigid systems. While not revolutionary alone, it bolstered Hansen’s narrative, reshaping industry thinking toward context-aware, people-centric procurement by 2025.

** Model 2 of 6 Models, and Level 1 of 5 Levels