April 12, 2005, 9:40 AM — In case you didn't know: German business software vendor SAP AG sells other vendors' database products -- in addition to its own software that runs on top. And over the years, its salespeople have made some pretty fat commissions from selling these products.
That's now history.
"In the past, there were incentives for our salespeople to sell high-priced databases," said SAP company spokesman Markus Berner. "The more expensive the database, the higher the commission."
That meant that not only salespeople but also suppliers of the more expensive database products, such as Oracle Corp., benefitted from this compensation scheme, but customers didn't, according to Berner.
"We changed our database sales commission to a flat fee-based scheme late last year in the U.S. and are now implementing this policy in Europe," he said.
The majority of SAP users currently use database products from Oracle, according to Berner. Other suppliers include IBM Corp. and Microsoft Corp.
Oracle -- for those of you who missed last year's headlines -- acquired PeopleSoft Inc. for US$10.3 billion, turning the U.S. database supplier into SAP's key rival literally overnight.
Even if the new database compensation policy is but a tiny move in SAP's efforts to ward off Oracle's growing presence in the market for enterprise application software, it shows how serious the German company is about thumping its U.S. rival wherever it can.
SAP also appears to be cooperating more closely with Oracle's main database competitors.
According to information leaked to the Financial Times on Monday, IBM Corp. plans sometime this quarter to launch a new version of its DB2 Universal Database system that is optimized for SAP software, including new functions.
An IBM spokeswoman confirmed the launch of this product and the intensified cooperation between the two companies.