Software // Information Management
Commentary
4/4/2007
04:04 PM
Rajan Chandras
Rajan Chandras
Commentary
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Trashing the Competition: Oracle, Microsoft & More

You already know about the Oracle/SAP flap: Oracle's contention is that... SAP's strategy is to: • Offer cut-rate support services to Oracle customers • Lure Oracle customers to (SAP) • Siphon off valuable software maintenance revenue from Oracle • Compete with Oracle support and maintenance services... But this is just the latest episode of a long running comedy-drama.

You already know about the Oracle/SAP flap: Oracle is claiming that a SAP subsidiary has illegally downloaded Oracle software and documentation, and wants this grievance redressed. But that's just the latest episode of a long running comedy-drama…

The Oracle complaint, filed in California, makes for surprisingly easy and interesting reading. In essence, Oracle's contention is that the software/documentation downloads, and indeed the SAP strategy, is to: • Offer cut-rate support services to Oracle customers • Lure Oracle customers to (SAP) • Siphon off valuable software maintenance revenue from Oracle • Compete with Oracle support and maintenance services on Oracle products, despite not owning any of the software code

[The reasons for this curious format will become clear shortly…]In itself, this is yawn-inspiring: competition and business espionage have been around as long as commerce itself. It's the legality and ethics of the matter that need to be examined - legality by the courts, and ethics, presumably, by the rest of us.

There is also an element of irony, because Oracle is no stranger to dubious competitive practices. First, there was the unsavory "Larry digs into Bill's trash" episode of 1999, when Oracle hired an investigative firm to uncover the dirt on public, purportedly independent pro-Microsoft campaigns. The investigative firm took the assignment literally: It went digging into dumpsters and sorting through the trash of these campaign offices, and how the dirt flew! Evidence found amongst the trash showed that Microsoft itself was funding (at least in part) the public campaigns, which proved highly embarrassing for Microsoft - and the "dumpster tactics" left Oracle and Larry Ellison red in the face as well. Furthermore, it seems that Microsoft had also used these "dumpster tactics" against a competitor earlier, which completes this comedy.

Then, of course, there is the Oracle-Red Hat episode of last year, which smacks of tactics very similar to Oracle's accusations against SAP. In October 2006, apparently dissatisfied with Red Hat Linux support policies, Oracle announced an "Unbreakable Linux Program" that would provide support for Red Hat Linux software at reduced rates. In other words, through the Unbreakable Linux program, Oracle would:

• Offer cut-rate support services to Red Hat customers • Lure Red Hat customers to Oracle • Siphon off valuable software maintenance revenue from Red Hat • Compete with Red Hat support and maintenance services on Red Hat products, despite not "owning" any of the software code (of course, Red Hat does not "own" Linux either, but arguably has a lot more invested in it.)

Well, then why is Oracle complaining if SAP does to Oracle what Oracle did to Microsoft and Red Hat? The difference is the modus operandi and legality. Oracle did not ask the investigative firm (or anybody else) to do anything illegal…it appears that the "dumpster strategy" is perfectly legal, and the undercutting of Red Hat may turn out to be brilliant strategy…who cares if it seems a little ethically challenged? For SAP, there is more at stake. If Oracle's allegations - laid out in details in the court filings - turn out to have substance, SAP faces a major legal and public relations challenge.

Comments, corrections and legal opinions, anyone?You already know about the Oracle/SAP flap: Oracle's contention is that... SAP's strategy is to: • Offer cut-rate support services to Oracle customers • Lure Oracle customers to (SAP) • Siphon off valuable software maintenance revenue from Oracle • Compete with Oracle support and maintenance services... But this is just the latest episode of a long running comedy-drama.

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