Oracle-Sun: Volume, Value and Price

Last thursday I had the chance to take the floor after the speeches at an Oracle “partner welcome event”.

I’d like to jot down my point of view, just to be sure it does not go with the wind…

It’s frankly undeniable that present days are quite hard days for Sun, their customers and their parters too: administrative andorganizational procedures are all tripped up and it takes a lot of patience to bear with as long as the rearrangement will be completed (hopefully by the end of current year’s first half).

My intervention dealt with this uncertainity phase as well as with the future we all eagerly await for.

Firstly: transaction

A smooth transaction would be of great help for all: customers, partners and Oracle-Sun itself!

By now Oracle shouldn’t impose its own margin nor sales policy, because former Sun ecosystem inhabitants are used to deal with hardware, not software nor appliances (I namely termed Exadata appliances as washing machines)

Sun products although being valuable, do not sport any truly superior value than HP, Dell or IBM products, to justify an higher price. To keep your competitive position Oracle/Sun must fairly price their product and process the offers in a timely manner (Oracle/Sun bureaucracy is reminescent of Ministry of Budget’s)

It’s easy to see potential customers flee from a potential supplier not able to offer a right price in a timely fashion.

One more bad thing to do is to abruptly cut a business partnership (I’m thinking about HDS) without offering any option to the resellers. Don’t tell me they thought Exadata were a suitable surrogate for a real storage..

Then: future.

Any reflections about future are quite hard to ponder, I hope that Oracle (along with a couple of former-Sun manager) can give us the right directions.

At present I can just confirm dubts that customers and resellers are raising about hardware strategies being defective, to say the least. Let’s get back to the washing-machines (Exadata appliances), Oracle will offer a turnkey product, hw, sw and services.

A customer who buying that solution should simply not care about what’s inside.

Exadata and similar products are software focussed: they do not use the best hardware, what the hardware lacks for is made up by sw, i.e. ASM (in a coarse way: Oracle volume manager) overcomes disks breakdown by means of sw

data protection. So? It’s easy to comprehend, to build appliances you need nothing more than second-class hardware, anonymous servers with taiwanese mobos. Just take a look at any appliance you have, surely the hardware is not from a major vendor nor a last generation one (it would cost too much and grant a too low margin), surely is what you can call a volume server.

Volume servers or high-performance enterprise-class servers?

When my dearest bought our last washing-machine didn’t care about CPUs, RAM, PCI bus, connectivity and so on, instead she asked about cycles, about the closest support center (you know, with 2 pre-school aged children this is mission critical), usability, power consumption and so on. I bet customers do ask similar questions when buying an Exadata: why should they care about what’s inside? HP, Sun, Dell hardware? They just trust in Oracle….

Indeed the message Oracle delivered is blurred. Do they want to manifacture/sell volume servers (good for washing-machines) or higher priced as well higher-performance value servers? Do they want to sell Oracle branded volume hardware, as a resell I can agree, but their price must be fair (low).

I can agree about selling high priced value servers too, but in this case the hardware must sport top notch qualities to allow a higher price margin.

At the partner event I gave the iPhone example: either you sell the best cell-phone in the market, the product everybody wants, the coolest, most efficient, best engineered, or you just are one among many! Price depends on quality (or better, perceived quality) not just on the company brand. When Apple entered the cell-phones arena they offered the best phone

in the market, competing with RIM (CISCO ?) but leaving well behind Nokia (HP), Motorola (Dell) and Samsung (IBM) scratching each other’s eyes out in the ordinary cell-phones market.

You can see people queuing to buy iPhones whithout a single cent rebate, most of the times with carrier tying contracts, just because that phone is perceived to be the best, because you can find a very wide software offer, because of its useability, or because it does (almost) everything and well.

Oracle, please tell us what side are you on, volume hardware appliances or value (higher margin) servers (why not, to build value appliances upon)?

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