Global CIO: In Oracle Vs. SAP, IBM Could Tip Balance
The big IT players are realigning and while Oracle's love-fest with Salesforce.com is nice, Oracle will need a whole lot more friends than that to compete against not just SAP but also IBM.
Maybe Oracle's love-fest last week with Salesforce.com means Larry Ellison realizes that after he's made plenty of IT-industry enemies, he could probably use a few friends.
Oracle's elbow-deep in its battle with SAP in the enterprise-app market, it dumped Hewlett-Packard as hardware partner for the strategically vital Exadata database machine, its scrapping with IBM for database and middleware customers, Ellison pointedly ridicules Microsoft at every opportunity, and he's promised via Sun to slug it out in hardware with IBM at the high end and HP and Dell everywhere.
In that overall scrum, while SAP will no doubt continue to be a primary antagonist, IBM is rapidly becoming every bit as direct and personal a competitor to Ellison as SAP and Microsoft have been. Here's why (And for deeper analyses of the developments noted in this column, please be sure to see the "Recommended Reading" list at the end.):
1) Hewlett-Packard HP is, officially, a close partner of both companies—after all, just last week it was a high-level sponsor at Oracle OpenWorld. And a few weeks ago during Ellison's public comments at the Churchill Club, he described how he and HP CEO Mark Hurd have an excellent relationship and that their companies will continue to be strategic partners even though (a) Oracle dumped HP on the Exadata deal, and (b) HP has been one of the primary pillagers of the Sun customer base in the lame-duck days until European bureaucrats approve Oracle's acquisition of Sun.
In the meantime, HP and SAP have forged close ties on BI hardware/software collaboration—that's not just business as usual, but is indeed a big step in a very important new direction for both companies. And while everybody can so that it's perfectly normal to compete over here but collaborate over there, I don't think that flimsy rationale will hold when HP becomes one of Oracle/Sun's most bitter rivals in high-end systems.
So as for whether Oracle of SAP will have the more-valuable relationship with HP, the advantage goes to SAP.
2) IBM SAP and IBM have been collaborating for 35 years in a multitude of ways, including on the development and leverage of deep vertical-industry expertise for big global clients that want SAP's software to run on IBM hardware guided by IBM integration and consulting specialists. And earlier this year, IBM and SAP released a jointly developed software product called Alloy that allows data and information from SAP applications to be accessed and expressed in Lotus Notes format.
Yes, Ellison has said that IBM Global Services installs more Oracle databases than any other reseller, but the current and future mortal combat between the two companies in not just middleware and databases but also high-end systems will more than offset that marriage of convenience.
So as for who's closer with IBM: advantage to SAP.
3) Microsoft Let's see: Oracle can't stand Microsoft and vice-versa, and IBM doesn't seem to care much for Microsoft, and a few weeks ago Microsoft CEO Steve Ballmer took a walk on the bizarre side with a rather pointless broadside against IBM and its lack of innovation, so as with a lot of things right now involving Microsoft, it's hard to know just what's going on. However, Microsoft and SAP just agreed to try to pull their products together through the efforts of Capgemini via a program called "ERP+" that is intended to drive greater enterprise-level interaction and value between the two companies' platforms and applications.
4) Dell While CEO Michael Dell joined Marc Benioff onstage at Oracle OpenWorld last week to talk about the new joint effort Dell and Salesforce.com are aiming at SMBs, Dell has been right there with IBM and HP in ripping away at Sun/Oracle's customers. That's just not the sort of thing that goes away once the merger is concluded, so the reality will be that while Dell and Oracle have had a good relationship over the years, and while Dell and Salesforce have created a strong relationship, there is no question that just like Salesforce and Oracle, Dell and Oracle will spend a lot of time competing aggressively against each other. The winner here: