Strategic CIO // Executive Insights & Innovation
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2/1/2010
02:54 PM
Bob Evans
Bob Evans
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Oracle's Ellison: We'll Grab Share By Going Direct

Promising to improve installation and support for Oracle-Sun products at Sun's 4,000 top customers, Oracle's Larry Ellison said the new company must "do a better job" of "working with those customers to make sure they get [Sun technology] installed successfully and running successfully." He didn't say so explicitly, but Ellison's implied message to Sun resellers and integrators: better give HP a call.

Promising to improve installation and support for Oracle-Sun products at Sun's 4,000 top customers, Oracle's Larry Ellison said the new company must "do a better job" of "working with those customers to make sure they get [Sun technology] installed successfully and running successfully." He didn't say so explicitly, but Ellison's implied message to Sun resellers and integrators: better give HP a call.CIOs can expect to gain some significant benefit from this new or enhanced direct relationship with Oracle-Sun, particularly in the next several months as the new company begins rolling out integrated systems with Oracle software on Sun hardware.

At the same time, however, that benefit could come with a hefty price tag, as my colleague Chris Murphy described in a recent Global CIOarticle called Oracle Bringing Its Support Fee Philosophy To Sun, in which Murphy said the following:

Juergen Rottler, Oracle executive VP of customer services, noted that Oracle's philosophy is that every customer should have the same level of service--"one, best level of service." Said Rottler: "You should expect something very similar for the Sun customer base." Rottler described Sun's support system as overly complicated, with many levels of support and different support offerings for each product, hardware and software. Rottler summed it up as part of how Oracle will "simplify how you purchase" support. Having one level of support also means that customers can't opt to pay less and get less service, the way a tiered approach would; for Oracle enterprise software, the typical fee is 22% the license fee each year.

That's the sort of support philosophy Sun's customers can expect from Sun, in return for which Ellison promised to deliver enhanced value to CIOs:

"Sun has a fabulous installed base, a fabulous group of customers, a wonderful pipeline of technology, and we just have to do a better job of taking this wonderful engineering output and delivering it to customers directly and working with those customers to make sure they get it installed successfully and running successfully, and benefit from those technologies," Ellison said last week at the Oracle-Sun Roadmap event.

"Sun sold through partners and serviced their customers primarily through partners we're going to take the top 4,000 Sun customers and go direct: we'll sell to them directly, service them directly, work with them directly, and make sure those customers get a good return on investments," Ellison said.

"We know the technology is great; now we've got to transfer that technology to our customers and use our engineering talent not just to build the stuff but to deliver the stuff to our customers, and make our customers successful, and if we do that well, they'll buy more."

If that plan works-and if those Sun customers and future prospects find that Oracle's "one, best level of support" delivers fair value in return for whatever support fees Oracle chooses to charge-then, Ellison said, Oracle expects to achieve significant growth from its new hardware businesses as well as the software products it acquired from Sun.

"So we think Sun's a growing business: we expect to take share in servers, we expect to take share in storage, we expect to take share in archival tape-y'know, the StorageTek business, these are the leading tape libraries on the planet," Ellison said.

"StorageTek is the market leader in tape, they are the technology leader in tape for backup and archive, and that business is gonna grow. The Sparc Solaris business is gonna grow. The MySQL business is gonna grow, and the Java business is gonna grow.

"And that's how we're approaching this merger and we've talked to a lot of customers and they're very excited the uncertainty of the past is now gone. And they can see we are investing in the Sun business, from engineering to delivery. And their investment in Sparc and Solaris is going to be preserved, and they can continue to invest in and exploit that technology to run their businesses."

Interesting plan-we'll see what the customers think when it moves from theory to application.

RECOMMENDED READING:

Global CIO: Oracle's Ellison Challenges IBM, NetApp, And-Well-Everyone

Global CIO: Oracle CEO Larry Ellison's Top 10 Reasons For Buying Sun

Global CIO: Oracle CEO Larry Ellison On The Future Of IT

Global CIO: Oracle-Sun A Bad Deal? Only A Fool Would Say That

Global CIO: Apple's Steve Jobs Torpedoes Another Stale Business Model

Oracle-Sun High-Performance Computing: Still Committed?

Oracle CEO Ellison: Sun Will Be Profitable In February

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