Tuesday, 8 September 2009

One Way To Alienate Customers

I mentioned some while ago that the Sun-Oracle proposed hook up was going to be an uneasy marriage. Their latest marketing effort illustrates how silly this can get.

On the back page of The Economist is an expensive advertisement that proclaims that the performance of Oracle working on Sun machines is better than the same software running on IBM machines. Thus, they proclaim that ‘Sun + Oracle is Faster’. The proof of this claim rather bizarrely will be published or at least be available from 14 October. It does not actually say which October this will be, but we can only assume that it is this year. IBM, meanwhile has about one month to respond to this claim and before they twist the argument, this is as compared to an IBM Power 595 Server Model 9119-FHA to be exact (plus a few caveat figures to prove they actually ran a test) but they do point out in the same small print that this model was available back in December of 2008. So Sun and Oracle have had around 9-10 months in order to beat the performance of that IBM machine and have not considered any subsequent models in between. Oh, and the model, or at least the solution package, is presumably not available until 14 October of some indeterminate year in the future.

So what does this advert say to Oracle users? Not much really. The software is not getting any better and that you need a damn powerful machine to get performance out of it. And if you bought an IBM server to run it, then you are a chump, basically. Yes, in the world of negative advertising this takes a good bite of biscuit. You can infer from the new line of advertising that there must be some kind of ‘tuning’ going on by Oracle to make the behemoth software (they are the second largest vendor of software worldwide with over 50% of their market) run slightly faster on their now home brand hardware – making any other type of Oracle user at a disadvantage. The advert does not mention Dell or HP or any other brand of hardware but one can infer that if the software is now specially tuned for Sun then users of those other brands will also be disadvantaged for the future, if not by 14 October.

What would happen if Microsoft adopted the same approach? It would alienate just about every other manufacturer of PCs should they throw their lot in with, say, HP. Immediately, all those years of careful building of an independent software brand that runs on any x86 chip at speeds controlled by the manufacturer (but the user gets a consistent look, feel and features no matter which one they choose) would be lost as Microsoft would be saying, ‘run it on any other brand than HP and you are getting less than your money’s worth’.

That’s effectively what Oracle has done. Many market analysts saw this as a natural move by Oracle to fight IBM, but it just erodes the software vendor’s independence on hardware. Whether they like it or not, there is a vast world of business users out there that have chosen platforms other than Sun to run their software – now they would really have to start questioning whether their software company is committed to their end user customers or ONLY those end users who run Sun hardware. And remember, Sun were struggling prior to this $7.4bn proposed takeover.

From a customer perception, this advert is the first major manifestation that Oracle has ditched its independence and will be preferentially developing software tuned for the Sun platform only in the future and that there is even now a risk that subsequent versions of Oracle will only run on Sun. So if you are an Oracle user today and not using the Sun platform, perhaps this advert poses two questions rather than the one intended: 1) Should I buy Sun in the future and if not, 2) Should I be reconsidering my choice of software for the future?

In the world of large scale software sales, while you can have umpteen nice OEM deals, latest offers and special relationships with lots of hardware vendors but, ultimately, the last thing you want to do is to lose a deal because of hardware allegiance. Better to make sure they buy your software because it best fits their needs rather than the needs of the hardware they run.

Maybe I am being pedantic here, but I found this advert astounding – then again, I thought the Sun-Oracle tie up a big mistake and smacked more of desperation by one or other of the companies rather than of real strategic thinking.

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