Oracle vs. SAP: Stand By Your Vendor

Monday Mar 26th 2007 by Rob Enderle
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Opinion: As the fracas between Oracle and SAP heats up, supporting your favorite vendor is more important than ever – you want them to be around tomorrow.

Analysis: When the news surrounding the lawsuit filed by Oracle against SAP hit the wires I thought back on PeopleSoft, and the old Tammy Wynette song, “Stand By Your Man,” started playing over and over again in my head.

I’ve since gone on medication and the song has stopped, but I now recall a survey that was done years ago on Oracle, and the one stand out comment from a CIO, which was “I don’t know who [Oracle CEO] Larry Ellison’s enemy is, but I’m afraid it’s us.” There is no medication I can think of that will make that go away, but folks, there comes a time when you really may want to step back and take a look at what is going on here.

Oracle Wears the Black Hat

Even though it is Oracle complaining about the theft, it is my read that, from the perspective of the IT buyer, Oracle wears the black hat here.

The sequence of events, as I understand it, are that Oracle, which was facing increasing competitive pressure from PeopeSoft, used their superior resources to do a hostile takeover and shut down the company. This denied you, the buyer, choice. And by removing a competitor, it allowed Oracle to improve their own financial position. In effect it putting them at cross purposes to your best interests.

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A large number of you objected and to address that market opportunity SAP hired some of the ex-PeopleSoft folks to provide alternative support for their PeopleSoft stuff. At least one did this by going on to the (now Oracle owned) PeopleSoft support sites to get the information needed to keep the folks running who didn’t want to work with Oracle.

Now what these SAP employees did was clearly wrong but it was also just as clearly in the best interest of the IT organizations they were trying to support. And the entire thing never would have happened if Oracle had not done the hostile takeover in the first place.

This will be one of those things where a jury is likely to go south and side with the defendant if they understand what caused the behavior.

But, at some point, if you want choices in the market, you the buyer need to stand up and help protect your chosen vendor – or choose vendors who can better protect themselves.

Why You Should Stand Up For Your Vendor

One of the interesting aspects of this market, and one that I doubt is unique to it, is how seldom companies come to each other’s defense.

If you have a vendor who is in trouble, even if you like them a great deal, that trouble is more likely to result in your changing vendors rather than finding a way to help them. Given how costly it is to change vendors and how grateful they are when you do this (it can turn a marginal business relationship into a lifetime, “whatever you want,” friendship) I wonder why this is the case. I’ve concluded that it is all about risk.

But what is the risk of getting down to two or three choices in the market? The way it is going for a broad selection of enterprise products there will shortly be only three: Oracle, IBM, and Microsoft. While these folks can likely pound on each other for some time, Oracle is on a last-man-standing kind of strategy. And that suggests that even this number could still be reduced.

We complain about Microsoft a great deal, but stop and think what it would be like if Oracle reached monopoly status and they could literally charge whatever they wanted and do whatever they felt needed to be done to increase their bottom line?

If IBM was bad in that position, and Microsoft is a problem, Oracle would likely be much worse.

And remember how much fun Computer Associates was at its peak? I can recall the days when CIOs wouldn’t buy from companies they thought “might” get acquired by CA. Compared to the PeopleSoft thing CA wasn’t that bad.

Standing Up for SAP

If you currently have SAP as a vendor and you want to keep it that way, they could use your help and it is in your own best interest to give it. There are a number of things you can do.

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First, if there are things you really like about SAP, become a vocal supporter of those things and look for opportunities to sing SAP’s praises. Often we only talk about a vendor when things aren’t working and few go out of their way to praise a vendor for things they do right. Right now, helping SAP find other customers is in your own best interest because a strengthening SAP can better fight against Oracle.

Second, call your SAP contact, particularly if they are supporting your PeopleSoft implementation, and offer your support. Chances are they won’t be able to use you but the offer of support will be appreciated and you might just be able to help them in their plight.

And remember, they got into this mess at least partially to help you out, so a little help back will be deeply appreciated. This kind of thing can change a loose partnership into a close friendship where, whenever you have a problem, you get a top executive who will take that problem as a personal priority. This can make all of the difference in the world when it works out.

Third, if you have Oracle, you might want to take a moment to express your dissatisfaction with their behavior. If you are letting a bid out, don’t let them bid. This is a good time to put forth your position, along with others, that their success at your expense is not an option you want a vendor who is working for you to consider, let alone act on.

Oracle is going down an ugly path when it comes to IT and this is a good time to remind them that this path has consequences that both of you would like to avoid.

Praising and Pounding

I’m a firm believer in pounding on a vendor when they do something bad and praising them when they do something good.

This is because I’ve seen what the alternatives of praising or pounding on everything can do. I particularly believe that if you like working with someone or some company you should take the trouble to support them as you would like to be supported because, often, the opportunity will come around where they can, and will, return the favor. But, selfishly, I know what a huge pain in the butt it is to change vendors and I don’t think any other vendor should force that on anyone, particularly me.

In the end, if you take care of the folks who take care of you, you’ll get better service. Whether that is from a waiter or SAP, the rule of ‘treat others as you want to be treated’ applies. Please take it to heart.

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