The headline-grabbing brouhaha over Oracle's ( ORCL) attempted takeover of PeopleSoft ( PSFT) has diverted attention away from enterprise software's rising star -- SAP ( SAP). In the last few months, the German giant has made significant gains across a number of product lines in North America, and is now poised to become the leader of the market for customer relationship management (CRM) software. Even more significantly for the long run, SAP is moving beyond its roots as a provider of applications and becoming a platform company with the capacity to compete against the likes of IBM ( IBM) and Oracle. Granted, SAP probably isn't a great short-term play because it trades well above its peers on a price-to-earnings basis and other valuation metrics. The stock strongly outperformed the Goldman Sachs Software Index in the past year, rising 80% vs. 35% for the index, and has held up better than most of its peers this year. But even if the short term proves unexciting, "most of us think it's the best stock in its group" for the long term, said Richard Parower, manager of the ( SHGTX) Seligman Global Technology fund, which owns SAP shares. "It's more expensive than its peers, but its earnings growth is strong enough to sustain the valuation," he said. Never known for modesty, SAP executives exude confidence these days. Asked about the strength of the competition, SAP Senior Vice President Peter Graf said during an interview: "I judge them by the job applications I get, and right now I'm getting them from engineers at Oracle, and CRM guys at Siebel ( SEBL)." Bumptious or not, Graf has a point. Siebel Systems, which has tenaciously clung to its lead in the CRM market, is within a whisker of being overtaken by SAP, according to a soon-to-be-released report from market researcher AMR Research. AMR Research director David O'Brien said SAP's CRM revenue is likely to grow by 5% to 10% in 2004 vs. less than 5% for Siebel. Given that Siebel's CRM revenue was about $1.3 billion in 2003 while SAP's was about $1.25 billion, the German company will be No. 1 by year-end, O'Brien said, although currency effects account for some of SAP's gain. Market share numbers are always controversial, partly because different vendors and researchers often define product categories differently and count revenue in different ways. Putting it less politely, Siebel Executive Vice President David Schmaier said that "one of these companies SAP or Siebel is not telling the truth."