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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.
"The integration cost that the customer incurs—both in-house and their integrators—is many times that of the Oracle products, and there's been no diminishing of that labor requirement," Mills said. "And so although it's an interesting assertion, if you qualify the question, you're certain to get the answer you want. If everything worked together perfectly, would you buy from one vendor?

"Well, that's a big but, and it's one of those highly qualified questions where the customer is clearly now being baited into saying, 'Well, of course! If you could solve that problem for me—if you could make all this stuff work together, and if it came to me that way, and ifyou significantly reduced my cost, then you have my attention.' So it's one of those fundamental truths—but of course it's a function of how you phrase the question in terms of the answer you'll get," Mills said.

"Customers will also tell you that they don't want to give Oracle pricing power—they don't view Oracle as a friendly company to do business with. They view their contracting and their licensing terms and their charging mechanisms and their up-charging and their embedded-feature charging, which is not always visible when you buy a product, and their maintenance policies and so on, all to be fairly onerous."

"The real value," says SAP's Sikka, "will come in rethinking the stack, which is precisely what we are doing and these giant stacks completely miss that. They don't take advantage of the new realities around real-time technologies and so they just miss that huge cost-savings opportunity for customers.

"We're going to make this very clear at the upcoming TechEd show because we see things very differently from these traditional vendors and their very big stacks."

That's a profoundly telling comment coming from Sikka and SAP: before February of this year when SAP brought in not only two new co-CEOs but also entirely new ways of looking at their business and their customers, could you have imagined SAP even attempting to portray itself as anything but the very model of a "traditional" vendor? The old SAP absolutely defined the traditional ideal of a cautious, low-risk, and low-change model where the one and only mission is to keep grinding away year after year, looking for incremental efficiency gains and avoiding risk at all costs.

And I emphasize that because it plays into the larger point of today's column: in 2011, the big IT vendors are going to be pitching a very different set of products, technologies, and IT philosophies than they were at any time in the past. While Oracle might be taking the most-radical approach, SAP and IBM and Hewlett-Packard and others will also be coming to you over the next 12 months with ideas and solutions that will be dramatically different from the old and traditional models.

The best and brightest CIOs will be keeping their minds fully open to these new-wave ideas because the larger business world is not at all what it used to be, and the IT approaches and solutions of just a few years ago will simply not support the new demands and new flexibility required to meet the steeper demands of that dynamic global-business environment.

And you just might find that some of these so-called nutty approaches might not be so nutty after all.

RECOMMENDED READING:

Global CIO: Oracle's Success Breeds Fear And Loathing At The New York Times

Global CIO: IBM Doubles Down On Red-Hot Optimized Systems

Global CIO: The CEO Of The Year Is SAP's Bill McDermott

Global CIO: IBM Top Product Exec Discusses Strategy, Systems, And Oracle

Global CIO: Larry Ellison And The New Oracle Rock The Tech World

Global CIO: IBM's Blazing New Mainframe Wins Raves From Citigroup

Global CIO: Oracle's New Fusion Apps: An Inside Look

Larry Ellison Rips Red Hat Linux, But Stays Committed

Global CIO: Will Larry Ellison Launch Bidding War With IBM For Netezza?

Global CIO: Oracle Product Chief Offers Glimpse At New Fusion Apps

Global CIO: Oracle Launches 'Cloud In A Box' And New Cloud Business

Global CIO: At Oracle Open World, Oracle Commits To Cloud Computing

Global CIO: Larry Ellison's Top 10 Priorities At Oracle Open World

Global CIO: Larry Ellison Embraces Cloud Computing's 'Idiocy'

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

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].