Oracle has taken over the top position of SAP as the largest provider of ERP applications in 2024. With revenues of $8.7 billion (€7.7 billion) and a market share of 6.63 percent, the company is taking over the top spot from SAP, which has dominated the ERP market since the 1980s.
This is according to market research by APPS RUN THE WORLD. The fast-growing Oracle Fusion Cloud ERP products for accounting, order management, and other business-critical processes are the driving force behind this shift. This software is designed explicitly for healthcare, banking, and construction sectors. While Oracle posted $8.7 billion in ERP revenue last year, SAP achieved $8.6 billion, representing a market share of 6.57 percent.
Looking at the big leap to the top market position, we see that 2022 was an important year for Oracle. That year, the company achieved revenue of just over $7 billion, up from $4.3 billion a year earlier. This is likely due to the completion of the acquisition of Cerner. That company offers a Health Record System, which later became part of Oracle Health. If you take the term ERP broadly, you could also include a Health Record System.
Strategic acquisitions and customer reach
Oracle’s rise is remarkable. The company has been battling SAP for the top spot for decades, but SAP seemed unbeatable. Oracle founder Larry Ellison decided in the 1990s to invest heavily in application development, years after he founded the company as a database innovator to challenge competitors such as Informix, Ingres, Sybase, and IBM.
The competition between Oracle and SAP intensified in the 2000s, when Oracle strengthened its E-Business Suite with a series of acquisitions, including PeopleSoft, JD Edwards, and Hyperion. This combination accelerated the development of Oracle’s SaaS applications, now known as Oracle Fusion Cloud Applications.
In 2016, Ellison upped the ante in his battle against SAP by buying NetSuite, bringing in more than 10,000 unique Cloud ERP customers. Six years later, Oracle signed a $28.3 billion agreement to acquire Cerner, which offers a range of patient administration, revenue cycle management, and electronic health record systems to more than 20,000 healthcare organizations.
Customer value as the deciding factor
It must be said, however, that SAP continues to grow. In 2019, the German company posted ERP revenue of $6.3 billion. This has since risen further, with revenue of $8.6 billion last year.
Another reason that market analysis points to behind this development is revenue per customer. SAP’s customer base now numbers around 400,000 customers, comparable to Oracle. The difference lies in the revenue per customer: SAP generated an average of $91,800 per customer for a total revenue of $37 billion, while Oracle achieved an average of $132,500 per customer for a total revenue of $53 billion. This gives Oracle a 31 percent advantage in wallet share.
In the total ERP market, Oracle has more than 100,000 customers who spent an average of $87,700 per year, compared to $61,429 for each of SAP’s 141,399 ERP customers. Here too, Oracle achieved a 30 percent advantage in its ability to capture a larger share of its customers’ budgets.