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Global CIO: Larry Ellison Is Rewriting The Golden Rule Of IT Strategy

Ellison defies conventional wisdom by promising that extreme dependence on a single IT vendor (that would be Oracle) doesn't kill you and in fact will make you stronger.

"With IBM, there are any number of places where you can have a single point of failure," Ellison said.

And his central point is that customers that choose to run on the Oracle-optimized, Oracle-configured, and Oracle-integrated systems and infrastructure will be able to leverage all that standardization to their great benefit, instead of having to muck through all the complexity and cost and time that come with cobbling together all the components from a slew of different vendors, after which comes the tuning, testing, configuring, etc.

"We're talking about standard configurations," Ellison said, "with lots of customers running that exact same configuration, and the reason that's so important is that if one customer finds a bug, we know we can just release just a single patch to all customers and the problem will be fixed immediately, and in turn this proactively and dramatically reduces the amount of bug discovery.

"It lets us do a much better job of testing before we ship the software because whatever bug one person finds, we can fix it immediately in all the thousands of customer sites because all the configurations are standard," he said.

"That is a huge, huge difference from today's unique hardware-software combinations where every single one is unique and finding the source of problems is extremely difficult and time-consuming. So we are betting heavily that that will be very important to customers: there'll be fewer bugs to discover, and we'll be able to fix them faster because of everyone having standard hardware/software configurations."

But SAP chief technology officer Vishal Sikka says this all-Oracle-stack approach will bring customers nothing but trouble, and that Ellison's theory is a lot of nonsense. Sikka contends that the imminent IT revolution that will be triggered by in-memory computing and databases will dramatically reduce the size and complexity of traditional stacks—yet Oracle, he says, is pushing customers to continue buying all those components even though the time is near when some of those pieces will be obsolete.

"There is an unbelievable cost-benefit to in-memory computing that customer after customer is telling us they're discovering as they find ways they can simply wipe out big layers of the stack because you don't need to make that long and expense round-trip from transactional systems to the database to do the analytics and then back again," said Sikka in a phone conversation last week.

"But the key message Oracle is missing with all their talk about these giant Exadata machines is that Oracle is still talking about the same stack with the same layers and the same expensive components that have been around since the 1980s: disks and fabrics and interfaces and all that infrastructure—it's all still there with their giant new systems."

IBM group executive and senior vice president Steve Mills, who's run the company's software group for many years and recently was given additional responsibility for hardware, also vigorously contested Ellison's theory and said customers will continue to battle against any approach that they feel is leading to vendor lock-in and a loss of control over key vendors.

In a recent interview at IBM headquarters, Mills said that while customers are clearly excited about the new wave of optimized systems coming from his company, from Oracle, and from various partnerships, "The customers also say, 'By the way, we like choice. We don't like giving vendors pricing power over us. We're the consumer, and they're the provider. We will evaluate total cost of ownership, we will evaluate time to value, we'll take all those things into consideration.'

"But they still want standards, they still want openness, they want open connectivity—they're the customer, so they want their cake and they want to eat it, too," Mills said. "So we have to be able to give them more of a prepackaged system where they want it, we have to be able to give them time to value and show them that, yet we also have to show them that we're not wiring things together in a way that inhibits their actions in the future.

"They don't like lock-ins, because the technology by its nature is general-purpose and they want to be able to apply it as they need it."

And Oracle's approach, said Mills, cuts directly across the grain of those customer desires and priorities, and Mills pointed to IBM's own extensive first-hand experience in doing Oracle implementations to shoot down Ellison's claim that customers will reap lower IT costs by turning to an all-Oracle stack:

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