2005 Review of the Year: Enterprise software

"Siebel has needed to be picked up for some time," Clive Longbottom, service director at analyst firm Quocirca, said in September.

"There are other suitors that would probably have made better sense, but it seems that Oracle is going for the number one slot no matter what the cost and aiming to become the only kid on the CRM block except for SAP."

Oracle's slew of acquisitions raises questions about the reasoning behind this strategy.

Agassi claimed in November that the two companies have fundamentally different strategic visions. SAP likes to see itself as an innovator that will bring a new wave of innovations to the world of enterprise software.

Oracle, on the other hand, treats the enterprise software market as a matured business where scale is more important than innovation, Agassi claimed.

Oracle typically refrains from directly commenting on SAP's business. But it has justified its acquisition strategy differently from the picture that Agassi painted.

While chief executive Larry Ellison has acknowledged the consolidation trend, he testified in court in July 2004 that the arrival of large new competitors including Microsoft was the driving force behind its acquisition strategy.

SAP meanwhile has been more conservative in its acquisition strategy. The firm has limited its buys to a few strategic areas in niche markets rather than buying large established firms.

Technology acquisitions have mostly focused on niche markets that are considered greenfield opportunities such as retail. Such purchases allow vendors to quickly ramp up their product offerings and claim their territory.

"[Retail] is a battleground vertical," Paul Hamerman, vice president in the enterprise applications research group at Forrester Research, said in November. "These vendors want to go head to head here, but there are other verticals where they might not compete so much."

The future will no doubt see new battles between SAP and Oracle. As Oracle gets closer to the 2008 launch date for Project Fusion, SAP is expected to diligently seek and point out any flaws and holes in the offering.

Oracle's many acquisitions, meanwhile, have made the database vendor a force to be reckoned with.

And if the firm succeeds in making true on its promise of the single, Java-based Project Fusion suite that will allow users to easily upgrade, it might just be able to shed the image that enterprise software implementations as a rule are delivered late and over budget.

Then SAP really has something to worry about.