Oracle founder and chairman Larry Ellison believes cloud computing gives Oracle the chance to overtake archrival SAP in enterprise apps. (Photo by Ezra Shaw/Getty Images)

(Note: After an award-winning career in the media business covering the tech industry, Bob Evans was VP of Strategic Communications at SAP in 2011, and Chief Communications Officer at Oracle from 2012 to 2016. He now runs his own firm, Evans Strategic Communications LLC.)

CLOUD WARS – Cloud computing, which has already triggered massive disruptions across industries in business models and traditional pecking-orders, is giving Oracle Corp. a once-in-a-generation chance to displace arch-enemy SAP as the world leader in enterprise applications.

For decades, SAP has been the world leader in enterprise applications and Oracle has been the frontrunner in enterprise databases, with both companies retaining their leadership positions in spite of the seismic shifts in the industry caused by the moves from mainframes to minicomputers to client-server to the Internet.

Oracle’s recent surge in cloud-applications revenue—it sold $1 billion in SaaS apps during the quarter ended May 31 and $3.4 billion for the year—give it a legitimate chance to overtake SAP as the world’s #1 provider of enterprise applications, particularly in the massive cloud ERP market.

In the combined category of on-premise apps plus cloud apps, it’s still not very close as SAP’s revenue for that category doubles that of Oracle for the corresponding set of products and services:

• Oracle: For the 3 months ending May 31, it reported combined applications revenue of $2.86 billion: $964 million for SaaS apps and $1.9 billion for on-premise (see full details on page 10 of the Oracle press release).
• SAP: For the 3 months ending June 30, it reported combined applications revenue for cloud plus on-premise of $5.61 billion (see full details on page 7 of the SAP press release).

But in that same Q4, Oracle’s SaaS revenue (non-GAAP) of $1.0 billion was up 76% over the year-earlier period—and during its June 21 earnings call with analysts, Oracle executives emphasized that every financial KPI they monitor for SaaS points to even bigger and better numbers for the coming quarter, which will end Aug. 31.

And standing out prominently among all that growth was Oracle’s Cloud ERP business, which CEO Mark Hurd said is now on an annualized run rate of $1.2 billion after Q4 revenue soared 156% over the year-earlier period.

Triggering that steep growth, said Hurd, were 868 new Cloud ERP customers in Q4, plus 200 more “expansions” from customers that were added more of the Oracle Cloud ERP services to ones they’d purchased previously.

As businesses jump to the cloud to accelerate innovation and engage more intimately with customers, my Cloud Wars series analyze the major cloud vendors from the perspective of business customers.