Former Oracle Executive to Join SAP

Following 24 hours of rumor and speculation, reports are now confirmed that John Wookey, Oracle's former senior vice president of applications development, is joining chief rival SAP, effective immediately. He will head the company's initiative for an enterprise-grade on-demand enterprise resource planning (ERP) solution, and will "organize the on-demand product roadmap under a single strategy solely for large enterprise customers," according to a statement by SAP spokesperson Saswato Das.

Industry pundits had received a release under embargo until this morning at 11 a.m. ET. According to a Wall Street Journal blogpost, Wookey's title will be "executive vice president of large enterprise on demand."

An Oracle spokesperson declined to comment on the matter.

Analysts say that the move doesn't come as a complete surprise, considering Wookey's technology background and experience. Given the timing of the announcement -- precisely a year after Wookey's October 2007 departure from Oracle -- many observers have suggested that he was likely bound by a one-year noncompete clause. The sequence of events has led third-party observers to speculate that the deal was "probably in the works for sometime," says Paul Hamerman, vice president of enterprise applications at Forrester Research.

Reasons for why Wookey left Oracle after a 12-year tenure are still, in Hamerman's words, "a bit mysterious." Nevertheless, most speculations point to the notion that Wookey "was interested in spearheading an on-demand strategy at Oracle," Hamerman says. "He didn't receive any support for that, so it really never [went] anywhere within [Oracle]."

Reluctant to attribute Wookey's departure to rumored tension around Oracle's on-demand efforts, Warren Wilson, research director and analyst at telecommunications and software consultancy Ovum, reaffirms that Larry Ellison, chief executive officer of Oracle, "has said on more than one occasion that he's skeptical of the [on-demand] model because of its low margins -- and from a shareholder-value point of view, he's quite right." (Ellison, it should be noted, was also an investor in on-demand pioneers Salesforce.com and NetSuite -- so he may have been hedging his bets.)

According to Wilson, SAP's initiative to create an on-demand solution for the enterprise poses different challenges than those the company has faced with its yet-to-be-released Business ByDesign solution for small and midsize businesses (SMBs).

Though it's taken longer than expected for SAP to launch Business ByDesign, Wilson says he doesn't think the delay necessarily suggests an inability to proceed with an enterprise solution. For one thing, Wilson says, an enterprise solution will be much more "mission-critical" and cannot shut down all operations when an upgrade is taking place.

Still, Wilson adds, there are advantages that continue to drive demand for on-demand as a preferred solution, especially among SMBs -- namely, the ability to offload software management and maintenance to a third party. Nevertheless, he says, "the margin questions are real, the technical challenges -- large enterprise versus small and medium -- are real, and it's not clear at all how the on-demand movement is going to shake out."

Wookey's position at SAP was apparently created for him -- the role is entirely new -- and he will be reporting to SAP AG executive board member Jim Hagemann Snabe, who leads the company's business solutions and technology organization. "Given that [Wookey's] position at Oracle was head of applications," Hamerman says, "I'd say it's at best a lateral move." It's unclear whether Wookey will be in charge of developing the on-demand version of SAP's existing enterprise-class offering, or perhaps an entirely new on-demand offering for the enterprise.

Regardless of how SAP goes forth with its on-demand initiative, Hamerman believes Wookey will prove to be "an asset to SAP," adding that "he's an industry veteran with a good reputation. He's very well-liked. He's not combative like some others who have been in leadership positions at SAP." (Hagerman declined to specifically name those SAP executives.)

"It's a good addition for SAP," Hamerman says. "He's a talent that can help them move forward with their ERP strategies. It'll be interesting, once he gets his feet on the ground,...for SAP to move forward with an on-demand offering for enterprise-class customers."

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