In his company's third-quarter earnings conference call, Ellison explained that SAP offers four distinct application product lines that do basically the same thing for different market segments, from very small businesses to the megacorporations. Each of these lines gets marketing and technical support budgets, and as SAP makes a move into the small-business market, it takes more effort and money to land increasingly tiny contracts. It doesn't help that mighty Microsoft
By contrast, Ellison touts his company's one-product strategy, where the modular Fusion framework is intended to work in any reasonable setting. Also, Oracle is happy to stay with its existing customers and "sell them more value," getting them to add extra modules, one by one, atop their existing application infrastructures.
These established customer relationships save Oracle from making cold calls and hard sells. So far, it appears that the strategy is working fairly well. "Our margins are going up, not down," Ellison said. "SAP has said that their expansion strategy requires sacrifice in margins. Well, we do not believe in sacrificing margins for growth."
Regarding middleware, Ellison said that Oracle has outgrown BEA Systems
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