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Leading Foes Continue Strategic Alliance

Oracle Corp. and SAP AG last week further extended their strategic relationship in what has got to be the software industry's version of a handshake with daggers at least held behind the back.

The two software giants announced plans to integrate the new Oracle8 database with SAP R/3 and to tighten customer service so that SAP can provide improved support for customers who use the Oracle database. SAP remains the enterprise-applications leader, while Oracle continues to dominate the market for relational databases. Their cooperation is important because many SAP customers run the applications with an Oracle database.

That said, the two software firms nonetheless are bitter competitors in the applications software business. There Oracle must compete not only with SAP, but with other aggressive vendors including PeopleSoft Inc., Baan Co. NV, and J.D. Edwards & Co.

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