Friday, November 5, 2010

Can I hear fences going up?

It’s been hard to miss the latest remarks of Oracle CEO, Larry Ellison. The unfortunate victim caught dead square in the cross-hairs of his gun sights this time just happens to be HP. Specifically, it’s incoming CEO, Leo Apotheker, as well as its new Chairman (and former Oracle President and Chief Operating Officer), Ray Lane. As the recent posting to The Motley Fool financial newsletter suggests “Who need the ‘Housewives of Beverly Hills when the CEOs of Palo Alto are far more entertaining?’” as it chronicles the outburst from Larry, as he goes after the new crop of executives starting work at HP this week.

What’s triggered this latest round of outbursts from Larry is the lawsuit Oracle launched against the software giant, SAP, following disclosure that SAP ended up with code and manuals of Oracle’s competitive product offering to something SAP was developing. Or, as the most recent article on the matter to the financial newsletter, The Street, observes quoting Charles King, principle analyst at technology research firm Pund-IT, “I think that the level of rancor in some of Larry Ellison’s public comments, and the aggressiveness (Oracle) is pursuing this with, seems out of balance with the level of misdeed that were done (and) that the level of vituperative rhetoric could risk damaging the relationship HP and Oracle have.”

Indeed! And what has led me to even touch this topic is the most recent news announcement from comForte, posted to their web site, disclosing their “signing of an international distribution agreement with Network Technologies International, Inc. (NTI). Under this agreement comForte will distribute NTI's market leading disaster recovery solutions. The DRNet family of products provides a powerful, efficient data replication engine ensuring continuous data availability.” This comes almost a year after Oracle acquired GoldenGate, where I was working at the time, and perhaps it couldn’t have been better timed.

I continue to view the GoldenGate product suite as perhaps the premier offering on NonStop when it comes to data replication and transformation, but with these outbursts from Larry and the deteriorating situation between Oracle and HP, it does make you wonder how enamored Oracle executives will continue to be with the NonStop marketplace and how quickly their commitment to the NonStop server will be curtailed.

According to Thomas Golerfeld, in a recent email exchange we had, and looking beyond any comparisons with GoldenGate “DRNet takes comForte into a new area and it extends our foot print in the security space. It’s all been about encryption of data (in transit, at rest, better management of Safeguard) and now we can offer customers business continuity solutions” To comForte executives, this relationship with NTI represents “a logical extension of what the company has done so far” and further populates a critical market segment, important for all NonStop users.

As the article in The Motely Fool observed, “Oracle and HP have become Silicon Valley’s serial acquirers … Oracle is moving into hardware with its Sun purchase, and HP wants to take on Oracle and IBM in the realm of enterprise services.” Wherever this takes us, any business dependent upon data base solutions from one or the other may really need to rethink the commitment of the vendor in order to continue to rely on support for tools and capabilities – after all, if this squabble continues, there’s no predicting where the lines around strategic offerings may be drawn!

4 comments:

  1. Card shuffling ...

    Rather than fences going up, I can hear the cards shuffled for an entirely new round of competition in IT. Roles and players are changing, and as the cards are newly dealt the players will have to decide abour their strategy in the new game. Sticking to their old strategy would be very likely to make them losers ...

    SUN has disappeared and became absorbed by Oracle. Oracle doesn't want to concentrate on the volume business as they don't see much to gain there, so Oracle rather concentrates on competing against IBM in the value business. Currently IBM and Oracle are the dominators of
    value business, whereas HP and Dell are more in love with the volume business. The big question will be whether the value or the volume business will bring better profits and higher stock prices ...

    Larry Ellison's attacks on HP have a clear background - he sees HP's value business as prey and wants to take it away ...

    Time will tell to what extend HP can fend off that attack. HP's success in that area will largely depend on how much focus will be given to the value business (Unix and NonStop). Services in the volume business tend to be less profitable, so a undifferentiated focus on services will probably not be of much help to HP.

    It is somewhat ironic that the obvious weaknesses of SUN could not be exploited better by HP in the recent years - and it remeains to be seen whether HP can improve the success rate of SUN attacks in the future ...

    The big strategic disadvantage that HP as an IT vendor has is the lack of a own database (let's forget NonStop SQL for a minute, the others forget NonStop SQL all the time ...).

    So HP not really being aware of it's own database, they need to try leveraging their enemy's databases (Oracle and DB2) or to resort to Microsoft's SQL Server (which is a good fit for the volume business, but seen as somewhat less compelling in the value business).

    It is quite clear that also in the coming years HP will have its main revenue in the volume business. It is up to HP to decide whether the company just wants to defend its position as "king of the hill" in volume business - or, as the world's largest IT company, wants to play a bigger role in the value busines too. If so, HP will have to step up investments in NonStop as plain vanilla Unix just isn't enough.

    The Internet age holds many strong requirements that are extremely difficult to fulfill with standard Wintel/Lintel technology, but where the old NonStop fundamentals provide a perfect fit.
    And there is an even stronger new requirement - IT security. We all know that IT security in the Internet is in a big mess and there is no hope whatsoever to really fix the related weaknesses in Wintel/Lintel technology in the foreseeable future. Again, NonStop provides a much better alternative here.

    So, while the cards are shuffled for a new round in the IT game, it will be interesting to see how the players will stack up their cards ...

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  2. Can't let enough alone with the comment:

    "Currently IBM and Oracle are the dominators of
    value business, whereas HP and Dell are more in love with the volume business."

    Bit harsh, isn't it?

    While HP continues to work with partners (there's more Oracle hosted on HP than pretty much anything else as best as I can tell), IBM continues to send mixed signals about its intentions and surprising the market with its investments in solutions providers. As IBM moves from just supporting solution partners to where it's cherry-picking selected items, its not encouraging to those left behind.

    Either buy them, or partner, not both ... and for the stance HP is taking and how it deals with it's partners, the paramteres are better understood and the market just as responsive.

    In other words, HP's pursuit of partnerships is a trategy I think hold the greater promise over the long term ...

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  3. I like the word "trategy" in the last sentence. A mix of tragedy and strategy - sounds right in this context.

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  4. Good catch but rather unfortunate ... yes, it should be startegy but I do like the point you make!

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