ITIC » HP

2011 in High Tech YTD Part 2: Management Shakeups at Google, HP, Microsoft etc.

Laura DiDio — Fri, 06 May 2011 16:36:25 +0000

Revolving Door
In contrast to Apple’s stunning success, the first calendar quarter of 2011 was a revolving door for other Silicon Valley companies and executives. There were management shifts, shakeups and ousters at Advanced Micro Devices (AMD), Google, Hewlett-Packard (HP) and Microsoft. They were variously aimed at jumpstarting product momentum (AMD, Microsoft), polishing a tarnished image and placating stockholders (HP) and providing an orderly transition of power (Google).
You need a scorecard to keep up with all the comings and goings.
AMD’s board ousted chief executive Dirk Meyer in mid-January after only 18 months on the job. It then appointed Senior Vice President and CFO Thomas Seifert, as interim CEO while the search goes on for a permanent chief executive. Siefert continues as chief financial officer and says he does not want to be considered for the permanent CEO position. This is probably a smart move. AMD’s flamboyant co-founder Jerry Sanders spent 33 years as CEO (1969 to 2002), but everyone who’s followed has had a short tenure.
The challenge for any AMD chief executive is to jumpstart momentum and somehow find a way to gain ground on perennial logic chip front runner Intel and Nvidia which dominates the mobile (Tegra 2) and graphics chip market. AMD’s Opteron dual and quad-core processors and the mobile and graphic chips which it acquired in its 2006 purchase of ATI are all solid offerings. However, AMD’s former CEO Hector Ruiz and Meyer elected to focus on optimizing their chips for traditional notebooks instead of the lightweight mobile devices and tablets that are stars in today’s markets. According to statistics published by International Data Corp., Intel’s share of the PC and server chip market is approximately 81% compared with AMD’s 19%.
AMD continues to shuffle its executive ranks. In February, two senior executives, Bob Rivet, executive vice president and chief operations and administrative officer, and Marty Seyer, senior vice president of corporate strategy, also resigned. In late March the company named former HP executive Mike Wolfe as its new chief information officer. Prior to joining AMD, Wolfe served as vice president of information technology for product development and engineering at HP. Wolfe is now responsible for managing AMD’s global technology infrastructure. Ironically, AMD’s former CIO Ahmed Mahmoud, who departed in 2010, went to HP where he is currently the Senior Vice President of the global information technology group.
HP Still Hurting from Hurd Scandal
HP has also had its share of executive shakeups in 2011. All of them stem from the continuing fallout from former CEO Mark Hurd’s exit last summer. The reverberations have tainted the company’s once pristine image and they are as toxic to HP as the radiation leaking from Japan’s Fukushima nuclear power plant. Hurd left under a cloud of scandal amidst charges of sexual harassment and dodgy expense accounting related to an undefined but inappropriate relationship with a female contract employee. A scant week after Hurd’s departure which included a platinum severance package worth $44M — a group of HP shareholders filed suit. The suit alleges that HP board members are guilty of “gross mismanagement and waste of corporate assets.” They claimed the board put the shareholders’ finances at risk by failing to disclose the charges of sexual harassment against Hurd. It sounds reasonable. What’s particularly galling to shareholders and rank and file employees is that Hurd got rewarded for his bad behavior after he spent the last several years cutting tens of thousands of workers from HP’s payroll.
In January, HP replaced four of its board members and added an additional director to the board. The departing HP board members are Joel Hyatt, John Joyce, Robert Ryan and Lucille Salhany. They are replaced by Shumeet Banerji, chief executive officer of Booz & Company; Patricia Russo, former CEO of Alcatel-Lucent; Gary Reiner, former CIO at GE; Dominique Senequier, CEO of AXA Private Equity and Meg Whitman, former president and CEO of eBay Inc.
The new board members provide HP with diversity and wide ranging experience. By overhauling its board, HP seeks to mollify outraged shareholders and distance itself from the Mark Hurd debacle. This is no easy task. HP launched its own investigation of Hurd’s departure. It will be conducted by CEO Leo Apotheker, the new board members and outside legal counsel. Apotheker has wasted no time assembling his team. On April 18, HP announced that Thomas Hogan, who headed the company’s enterprise business sales and marketing, will leave on May 31 to “pursue other interests.” Hogan’s replacement is Jan Zadak (a former Compaq executive). Zadak is presently the managing director for HP’s Europe, Middle East and Africa (EMEA) operations. In mid-April, HP also appointed Marty Homlish as executive VP and chief marketing officer. Homlish will be responsible for overseeing and leading marketing across the company and will become a member of the company’s Executive Council, reporting directly to Leo Apotheker. Homlish and Apotheker worked together before at SAP AG, where the latter was CEO. Prior to joining HP, Homlish spent 10 years at SAP AG, where he served as the global chief marketing officer and corporate officer, as well as president and CEO of SAP Global Marketing, Inc.
There was also a seismic (though amicable) shift at search engine market leader Google. The company announced in January that Eric Schmidt would relinquish his CEO post in April in favor of company co-founder Larry Page. Page took over in early April and immediately reshuffled managers and the reporting structure.
The CEO change at Google is prompted by the desire to aggressively expand into new markets. Page is going to have to prove himself. Wall Street is nervous. In the wake of continuing skirmishes with leading vendors including Microsoft and Apple and latest and somewhat disappointing financials reported on April 14, many on Wall Street are concerned about Google’s prospects. They question the company’s aggressive spending spree. Months ago Google announced plans to hire 7,000 to 10,000 new workers; hand out 10% company-wide salary increases and aggressively pursue new business. That includes technology expansion into everything from smart phones to social networking to mobile and expensive marketing campaigns.
In its latest quarter, Google reported expenses of $2.84 billion; a 54% increase from the prior year. While revenues in the latest quarter ended March 31 rose by 29%, Google’s stock price has decline by nearly 9% since January when it announced that Schmidt was stepping down as CEO. The decrease has wiped out roughly $12.5 billion from Google’s market capitalization which now stands at $173.09 billion (still one of the best in the industry). Google remains the dominant player in the search engine arena with a commanding 65% market share. Its next closest competitor is Microsoft’s Bing which has about 14% and Bing is linked to Yahoo which has another 16% for a combined share of 30%. Google’s Android mobile operating system meanwhile remains the undisputed market leader with a solid 45% market share; twice that of its nearest rival Apple’s iOS.
“Dog Wars” Android App Bites Google’s Image
Meanwhile, Google faces growing and well deserved criticism by the Humane Society, the ASPCA and animal rights activists who are outraged over an Android application called “Dog Wars.” The video game built by Kage Games glorifies dog fighting and depicts a bloodied pit bull next to the game’s logo on Kage’s website. Humane Society President Wayne Pacelle said in a prepared statement that “Dog Wars” could be used as virtual training ground for would-be dogfighters. Even Philadelphia Eagles quarterback Michael Vick who spent 18 months in prison after being convicted of illegal dogfighting, condemned the Android application. “I’ve come to learn the hard way that dogfighting is a dead-end street,” Vick said in a statement posted on the Humane Society’s website. “Now, I am on the right side of this issue, and I think it’s important to send the smart message to kids, and not glorify this form of animal cruelty, even in an Android app.”
Google ducked the issue for two weeks before it was finally pulled from Android Marketplace. on April 28. This incident also shines the spotlight on a larger issue: as Google further expands into the gaming industry via the number one Android operating system, will profits win out over principles and ethics? To further extend the Android mobile OS and solidify its lead, Google launched the new “Games at Google” gaming unit and they are seeking a Product Manager to fill the post. Let’s hope it top management provides some much needed ethical oversight.

Changes are also afoot at Microsoft. In late January CEO Steve Ballmer announced the departure of 23 year veteran Bob Muglia who successfully ran the company’s very profitable Server and Tools business. Under Muglia’s direction, STB recorded a $1.63 billion operating profit on sales of $3.96 billion in the prior fiscal quarter. Muglia will leave sometime this summer. To date, Microsoft has been mum about his replacement and while the company isn’t saying anything publicly word inside the company is that Ballmer forced Muglia out to accelerate Microsoft’s cloud strategy.
Whether or not that’s the case, Ballmer should speed up the search for Muglia’s successor and plug the gaping holes left by other very visible departures. They include: Brad Brooks, a corporate vice president in the Windows consumer marketing group who left to work for Juniper Networks; Matt Miszewski, the general manager of Microsoft’s government business who is taking an executive post Salesforce.com and Johnny Chung Lee, the infamous Wii hacker who partnered with engineers in Microsoft’s Applied Sciences group to develop the Kinect for the Xbox 360. Lee is defecting to Google. Ouch! The Kinect motion camera has been an unqualified success for Microsoft. It sold eight million units in the first 60 day. Microsoft is also betting heavily on its Windows Phone 7, which has garnered generally positive reviews. Microsoft says it has sold over two million units to date but it isn’t clear how many of those units (which have been shipped to partners) have actually been sold. Microsoft will have to bring its “A” game to challenge Android-based smart phones, Apple’s iPhone 4 and RIM’s Blackberry.

ITIC 2011 Reliability Survey: Users Give IBM AIX v7, Windows Server 2008 R2 Highest Security Marks

Laura DiDio — Mon, 04 Apr 2011 15:25:49 +0000

IBM AIX v7 and Windows Server 2008 R2 Highest Security Marks
Nine out of 10 — 90% — of the 470 respondents to ITIC’s 2010-2011 Global Server Hardware and Server OS Reliability survey rated the security of Microsoft’s Windows Server 2008 R2 and IBM’s AIX v7 as “Excellent” or “Very Good.” This was the highest security ratings out of 18 different Server Operating System distributions (See Exhibit below). Three-quarters or 75% of survey participants gave HP UX 11i v3 “Excellent” or “Very Good” security ratings; this was the third highest ranking of the 18 major server OS distributions polled. This was followed by Ubuntu Server 10 and Debian GNU/Linux 5, which tied for fourth. Seven out of 10 survey participants — 71% — of those polled ranked the two most popular open source distributions’ security as “Excellent” or “Very Good.” Red Hat Enterprise Linux v 5.5 and Novell SuSE Linux Enterprise 11, the two most widely deployed Linux distributions trailed Debian and Ubuntu but were nearly tied with each other in security rankings. Just over two-thirds — 67% — of Red Hat users rated its security as “Excellent or Very Good” while 66% of survey participants judging Novell SuSE Linux Enterprise 11 security to be “Excellent” or “Very Good.”
Some 58% of Apple Mac OS X 10.6 survey respondents rated its security as “Excellent” or “Very Good,” putting it at the bottom of the pack, beating only Oracle’s Solaris 10 which was rated “Excellent” or “Very Good” by 63% of respondents.
, which in the past two years has been notching modest gains among corporate users,
Also noteworthy was the fact that only a very small percentage of respondents gave thumbs down “Poor” or “Unsatisfactory” security grades to their server operating system vendors. In this category, Apple had the highest percentage of respondents – 7% — who gave its Mac OS X 10.6 both “Poor” and “Unsatisfactory” marks. This might appear puzzling to some since Apple’s users have long touted the security of the platform. Apple users have long boasted about the fact that there are far fewer viruses and malicious code written targeting Macs compared to Windows. However, now that Apple is once again re-emerging as a significant presence in corporate networks, the Mac OS X 10.6 will no longer enjoy the “security by obscurity” that it claimed as a standalone consumer OS. Macs, iPhones, iPads and tablets are becoming mainstream staples as business tools. Hence, the number of exploits, including such malware as worms, Trojans and bots that target the Mac is increasing commensurately. Apple will have to respond accordingly with tighter security.
Survey Methodology
ITIC and our survey partner GFI Software conducted an independent Web-based survey of 470 corporate IT mangers and C-level executives worldwide from November 2010 through February 2011. The survey’s objective was to poll corporate customers on the reliability of 14 of the most popular server hardware platforms and 18 of the top server OS distributions.
Survey participants came from 23 countries worldwide; approximately 83% hailed from North America. The survey consisted of multiple choice questions and one essay question. ITIC supplemented the Web survey two dozen first person customer interviews. In order to maintain objectivity, ITIC accepted no vendor sponsorship monies.
Solid Security is Essential to Network Reliability
Solid security is an essential element for every network environment. The server operating system upon which corporate middleware and software e.g., databases, word processing applications, spreadsheets and other mainstream line of business (LOB) applications run is the cornerstone of the entire network computing environment. As the saying goes, “the chain is only as strong as the weakest link.” Server and their operating systems literally run the business and incorporate a significant percent of organizations’ sensitive data and intellectual property (IP). If server OS security is flawed, buggy or easily hacked, the entire business and its operations are potentially at risk.
Each GFI/ITIC survey invariably serves up some unexpected responses. And in this survey the biggest came in the responses regarding server operating system security.
The biggest of these, of course, was Microsoft, which like the Bible’s Prodigal Son, has returned home to rejoicing and rave reviews. Over the past decade Microsoft has struggled to shed the stigma that Windows is a porous server OS, perennially plagued with security flaws and easily compromised. It is now nine years since Microsoft publicly launched its Trustworthy Computing Initiative which was designed to make all of the company’s software inherently more secure by default and by design. Based on the survey responses, Microsoft has succeeded – particularly with Windows Server 2008 R2.
Of particular note, Windows Server 2003, Windows Server 2008 and Windows Server 2008 R2 are the only three operating systems out of the 18 different server OSes in the GFI/ ITIC poll in which the majority of the respondents indicated that the security has improved over the past 3 years. This is an 18 percent improvement over Windows Server 2008 and a 30 percent jump in the number of survey participants who gave a similar rating to Windows Server 2003.
It is equally true in analyzing the responses that the Windows Server OS was the platform that most needed to strengthen and shore up its security. Based on the results of prior ITIC surveys as recently as 2008, user perception was that Windows Server security lagged behind nearly all of the other server OSs by a substantial margin.
Other Server Operating Systems Stay the Course
In all of the other 15 distributions, the majority of survey participants indicated that the security of the other server OS platforms “has remained the same.”
If Windows Server 2008 R2 is the Prodigal Son, then IBM’s AIX v 7.1 is the “Good Son” which has consistently delivered superlative security year after year, always garnering top ratings for overall reliability and security in each of the annual ITIC Reliability surveys. The 2010-2011 Global Server Hardware and Server OS Reliability poll was no exception. IBM tied for first place with nine out of 10 respondents – 90% — giving AIX v 7.1 an “Excellent” or “Very Good” rating. Many of the IBM security managers ITIC interviewed, cited the consistency and inherent ‘bullet proof” nature of the server OS source code and the fact that IBM is quick to discover, inform them and issue a fix when a security issue does arise.
Other distributions like HP’s UX, Red Hat Enterprise Linux , Novell SuSE Linux Enterprise and Apple’s Mac OS X 10.x also received high security marks and praise from customers.
The results of ITIC’s latest 2010-2011 Global Server Hardware and Server OS Reliability survey indicated that organizations of all sizes and across all vertical markets feel that it is critical that they monitor the server OS and associated server-based line of business (LOB) applications for vulnerabilities. A 51 percent majority of businesses feel that the security of the OS has an impact on the overall security and reliability of the network. Specifically, 60% of respondents indicated they place equal importance on monitoring the vulnerabilities of all network components followed by 56% that rated the OS as crucial and 42% say they feel the security of their databases and other main LOB applications are pivotal to the overall security of their network computing environments.
Among the other security highlights in the ITIC/GFI 2010-2011 Global Server Hardware and Server OS Reliability Survey:
• In response to the question: “Estimate the impact or perceived impact that server OS security has on overall network reliability”
o 10% of respondents said “No impact, they are separate and distinct”
o 37% of participants said “minimal impact
o 21% said “moderate impact
o 17% said “significant impact
o 12% said “extremely crucial, server OS and security are intertwined”

Based on ITIC’s first person customer interviews, we determined that the biggest customer complaint was not with the inherent security of a specific server OS platform, but rather in finding fixes and getting technical service and support when the organization was stymied. In many of these particular instances, the organizations were very large enterprises and a common complaint was that searching for a fix was akin to finding “proverbial needle in a haystack.” Since the underlying reliability and security of nearly all the server operating systems and server hardware has improved, the majority of the more moderate and severe Tier 2 and Tier 3 outages are mainly due to integration and interoperability issues e.g., incompatible applications or drivers.

Conclusions and Recommendations
Server OS security is fluid and not static. No server operating system, application or hardware component is immune to penetration. Customer perception can and does change the minute a security flaw is found or malware is unleashed that successfully penetrates or threatens to compromise the security of any platform.
None of the server operating system vendors can rest on their laurels. Microsoft has made impressive security gains making Windows Server inherently secure by default, design and deployment, now it must endeavor to maintain the consistency of its security. Windows Server also has the biggest bull’s eye on its back since it is one of the most widely deployed server operating systems. Other server OS distributions, most notably Apple’s OS X 10.6x, which has so far managed to avoid falling prey to very major or public security holes, must likewise maintain its vigilance as the OS increases its presence in corporate enterprises.
Corporations also bear at least 50% of the responsibility for securing their respective environments. Even the most bulletproof server OS can be compromised and undone by configuration errors and failure to install and turn on OS security features. Organizations are also advised to conduct quarterly threat assessments of their environments. Staying current on the latest patches and fixes is also a must, as are regular updates of anti-virus applications and other security packages. Corporations should also review and update their security policies and procedures annually.
These results are especially important considered in light of the ongoing economic crunch which has caused companies to cut their IT budgets and reduce staff. As they strive to accomplish more with fewer resources, IT departments must rely even more heavily on their vendors to deliver more reliable and secure servers and server OS platforms.
Time is literally money. Even a few minutes of downtime – especially when a hack or a suspected security leak occurs — can result in significant costs and cause internal business operations to grind to a halt. Downtime as a result of a security breach can also undermine company’s relationship with its customers, business suppliers and partners. Reliability or lack thereof can potentially damage a company’s reputation and result in lost business.

ITIC 2011 Reliability Shows that Dell, HP, IBM & Stratus Score High Marks for Service & Support

Laura DiDio — Mon, 04 Apr 2011 15:19:38 +0000

Dell, HP, IBM and Stratus Technologies won high praise from corporate users for their prompt and efficient after market technical service and support in the latest ITIC 2010-2011 Global Server Hardware and Server OS Reliability survey.
The results came from a broad based survey that polled organizations worldwide on the reliability, security and technical service and support from among 14 of the leading server hardware platforms and 18 of the most widely deployed server operating system distributions.
As we said in an earlier discussion, each poll elicits some surprising and unexpected revelations. In this survey, users reserved their highest encomiums and most critical barbs for the server hardware vendors – both in terms of product performance and reliability and the service and support they receive from their respective vendors.
Among the mainstream hardware vendors with the largest market shares, users expressed the most satisfaction with Dell, HP and IBM service and support. Stratus Technologies, whose ftServer line specializes in high availability, also got customer kudos for delivering superior service and support.
Specifically, the results show that 76% of HP customers rated its service and support as Excellent or Very Good, followed by 72% of IBM corporate accounts who gave Big Blue servers Excellent or Very Good grades and 70% of Dell customers who said their technical service and support was Excellent or Very Good.
Equally important is the fact that only a very small minority of Dell, HP and IBM customers dinged those vendors with negative ratings for their technical service and support. Only three percent of IBM server users rated the company’s technical service and support as Poor and none called it Unsatisfactory. Among Dell users, only a very small two percent minority called technical service and support Poor and only one percent deemed it Unsatisfactory. Similarly, only three percent of HP server respondents called technical service and support Poor and only two percent rated it Unsatisfactory.
The high ratings users gave HP and IBM is perhaps not surprising since service and support is a core competency that represents roughly 50% of each company’s respective annual revenue. The most common complaints voiced about HP support was that updates are difficult to roll out because they come out sporadically and there is a constant need to check HP’s website for the newest updates. IBM customers were mainly satisfied with the alacrity and quality of Big Blue’s support, but some did complain that it “was too expensive.”
Over eight-out-of-10 or 84% of Stratus ftServer customers gave the company’s technical service and support an Excellent or Very Good rating. Significantly, none of Stratus’ customers said the technical service and support was Poor or Unsatisfactory. Stratus, based in Maynard, MA and which is among the last of the small, independent server vendors, won rave reviews from mid-market and enterprise customers for the depth and breadth of its technical service and support and the willingness of its support staff. “In the rare instances when we have occasion to call Stratus support, they are extremely responsive and always willing to do whatever it takes to resolve the issue,” said an IT director at a mid-Atlantic enterprise.
User Support Concerns
ITIC conducted over two dozen first person interviews with IT managers and C-level executives in order to delve more deeply into issues like technical service and support that positively or negatively impact reliability. Based on those conversations, we determined that with rare exceptions the biggest customer complaint was not with the inherent performance, reliability or security of a specific server hardware or server OS platform, but rather in finding a fix and getting technical service and support when an IT department is stymied.
This is especially problematic for enterprises that have large, complex enterprises and multiple remote locations. This means that network administrators spend more time ferreting out the cause of the outage before they can even begin to search for a fix.
Since the underlying reliability and security of nearly all the server operating systems and server hardware has improved, the majority of the more moderate and severe Tier 2 and Tier 3 outages are mainly due to component failures, integration and interoperability issues e.g., incompatible applications or drivers.
Interestingly, the service and support issues that most irked IT managers were the sometimes lengthy waits for replacement component parts for their servers and incompatibilities among the server hardware, server OSs and third party applications. The latter point left many IT managers scrambling to escalate support issues to get the fix in a reasonable amount of time.
An IT administrator at an SMB construction firm and a self-described “Dell fan boy” commented, “I have always found Dell’s support to be good… but over the last year to year and a half I have had some problems getting parts or servers in a timely fashion. I ordered two servers last year that the sales rep quoted 2-3 weeks to arrive. It took almost 3 months to get the servers and only after having to escalate the order more than once.”
The long lead time in ordering and receiving replacement parts was not limited to Dell. Many IT managers voiced the same complaint about other vendors, although there did not seem to be a groundswell of consensus that the lead times to receive replacement parts affected one vendor more than any other.
Network administrators like the manager at an SMB manufacturing firm, lamented the lack of an overarching toolset that could be used for more synergistic security and system monitoring. He noted that while there are some overlapping tools that can be deployed for the server OS, the server hardware and the networking gear, there is “no comprehensive “offering.
“It would certainly be nice to have a common portal to manage & monitor all aspects of security and reliability among all hardware/OS platforms. This may not make sense for large organizations, but for the SMBs, where all of these systems are managed by the same team (or individual), it would be a dream,” he said. “We just don’t have the manpower to keep an eye on everything 24×7. The sooner we can react to issues, the better our business operates,” he added.
A VP of IT and security at a midsized organization in the Northeast observed that size does matter when it comes to technical service and support. “Most of the big server vendors provide adequate support if you have 50+ servers and you can escalate past first level support quite easily.”
So how do SMBs who lack the budgets and the clout of their enterprise counterparts manage? The survey responses and customer interviews reaffirmed the fact that SMBs are heavily reliant on managed service providers (MSPs) or consultants to solve thorny reliability issues.

Survey Methodology
ITIC conducted an independent Web-based survey of 470 corporate IT mangers and C-level executives worldwide from November 2010 through February 2011. The survey’s objective was to poll corporate customers on the reliability of 14 of the most popular server hardware platforms and 18 of the top server OS distributions.
The survey participants came from 23 countries worldwide; approximately 83% of the respondents hailed from North America. The survey consisted of multiple choice questions and one essay question. ITIC supplemented the Web survey two dozen first person customer interviews. In order to maintain objectivity, ITIC accepted no vendor sponsorship monies.
Nonetheless, downtime, regardless of the reason, still disrupts network operations, costs the corporation time and money and raises the risk of litigation. Additionally, any extended amount of downtime (and these days even a 15 or 20 minute outage can be classified as lengthy) will almost certainly cause service disruptions that can have a domino effect on business partners, customers and suppliers.
This underscores the importance of timely and efficient technical service and support, which can make the difference between minutes or hours of downtime. It is not hyperbole to state that technical service and support is one of the pillars – along with product features, performance, security and scalability — that solidifies or undermines the overall reliability of the network infrastructure.
Conclusions and Recommendations
Vendors’ ability to deliver top notch technical service and support – including a quick response with updates, fixes and patches to known flaws and security vulnerabilities – has a direct impact on overarching network reliability. Technical service and support – good and bad – also distinguishes and differentiates vendors from their competitors. How promptly, efficiently and courteously a vendor responds to its customers definitely plays a role in an organization’s planned purchases and upgrades.
Vendors who provide shoddy service, or have been inattentive to their customers’ requests for information on products and pricing or who fail to effectively respond in times of crisis, may find that such behavior backfires. A vendor that ignores its clients needs once the contract has been signed, may find themselves unable to upsell to those users or tossed out of the account completely when the contact expires. At the very least, such vendors can expect that service contract renewals will be imperiled.
Competition is fierce among hardware and server operating system vendors. Users have choices and they know it. In 21st Century networks, time is literally money. Fast action and superior service and support can save or cost a corporation thousands or even millions of dollars for every minute of downtime.

ITIC Reliabiity Survey: Oracle Users Anxious/Angry Over Service, Support Slippage

Laura DiDio — Thu, 03 Feb 2011 18:33:33 +0000

Oracle must move quickly and decisively to customers’ anxiety and restore confidence in the database maker’s technical service and support organization – particularly with respect to the company’s Sun Microsystems’ software and hardware assets. The latest independent ITIC/ GFI Software (formerly Sunbelt Software) 2011 Global Server Hardware and Server OS Reliability Survey, polled 468 businesses worldwide found It found that Oracle products received the lowest ratings for the quality of its service and support of any of the major vendors. Users gave Oracle products, service and support mixed ratings.

Three out of 10 organizations rated Oracle products, technical service and support as Excellent or Very Good. A nearly equal number of survey participants – 26 percent gave Oracle’s offerings a Good rating, while 25 percent graded it as just Satisfactory. Nearly two out of 10 of the organizations polled, gave Oracle’s products, services and support a negative rating; with 13 percent judging it Poor and the remaining six percent giving it an Unsatisfactory rating.
Oracle Reliability, Service and Support by the Numbers

The reliability of Oracle’s Solaris operating system and the company’s x86 and SPARC servers remains fairly strong and competitive, though their uptime and reliability do not match the leaders in those categories.
Specifically, 71 percent of customers running Oracle Solaris 10 on SPARC servers reported they experienced one or fewer minor unplanned Tier 1 outages per server, per annum; while 79 percent of users running Oracle Solaris on x86 based server hardware recorded one or fewer Tier 1 per server annual unplanned outages.
While those reliability figures are very respectable they lag well behind the 85 percent of IBM AIX 7.1; 84 percent of Novell SuSE Linux Enterprise 11 users; 84 percent of Debian GNU Linux 4.0 and 5.0 users; 82 percent of HP UX 11i v.3 and Ubuntu Server 9 and 10 users who reported one or fewer unanticipated per server, per annum minor Tier one incidents.
Oracle Solaris 10 (on x86 servers) and Oracle Solaris 10 (on SPARC servers) logged similarly respectable statistics for the most severe Tier 3 outages, with 85 percent of x86 based Solaris users and 80 percent of Solaris SPARC based users indicating they had experienced one or fewer per server, per annum Tier 3 outages of four hours or longer duration.
However, once again the Oracle Solaris OS Tier 3 performance trailed rivals HP UX 11i v3 (86 percent), IBM (all versions of AIX – v5.3, v6.1 and v7.1 – 88 percent), Microsoft (Windows Server 2003, Windows Server 2008 and Windows Server 2008 R2 – 90 and 92 percent), Novell SuSE Linux Enterprise 11 (86 percent); and Ubuntu Server 9 and 10 (87 percent).
Even Apple Mac OS X 10.6, a recent entrant into the corporate server OS market, managed roughly equivalent Tier 3 server outage statistics (83 percent of users reporting one or less than one per server, per annum outage) to the Oracle Solaris server operating system platforms.
The survey participants were in accord that the majority of their unplanned Tier 1, Tier 2 and Tier 3 server outages were due to integration, interoperability and technical service and support issues rather than any inherent flaws in the underlying platforms themselves, the vendors’ ability to respond quickly and efficiently when problems arise becomes a crucial component that positively or negatively impacts the length and severity of a server OS or server hardware outage.
It was clear both in customers’ responses to the Web-based multiple choice questions, as well as the anecdotal essay comments and first person customer interviews, that many enterprise customers are unhappy with Oracle service and support.
Users Say Oracle Service and Support Slips

Satisfaction with Oracle’s technical service and support in its Oracle database core competency, the former Sun Solaris operating system and x86-based and SPARC hardware lagged far behind longtime rivals like IBM, Microsoft and HP.
Only 31 percent of the respondents gave Oracle an “excellent” or “very good” rating for product performance, service and support. This is in sharp contrast to the over 75 percent of survey participants who gave rivals HP and IBM and 70 percent of Dell users who gave those vendors “excellent” and “very good” marks for their hardware product performance, service and support.
And in Oracle’s core competency databases, both IBM’s DB2 and Microsoft’s SQL Server scored significantly higher satisfaction ratings among survey respondents. Over 80 percent of those polled gave IBM DB2 and Microsoft SQL Server “excellent” or “very good” ratings compared to the 43 percent of respondents who gave the Oracle DB an “excellent” or “very good” rating.
Some of the anecdotal user comments about Oracle support were scathing by any measure:
“Our Sun support has become even more abysmal since crazy Larry purchased them; it’s hard to believe,” remarked an IT manager at a large healthcare organization with over 100 servers.
The VP of IT at a large insurance company was equally critical. “We’re paying top dollar for Oracle Premier Service and support – which keeps going up – and we have little or nothing to show for it other than a big bill,” he said.
Such comments unfortunately were not the exception.
Oracle also registered the highest percentage of dissatisfied users: 20 percent or one-in-five respondents judge Oracle (Sun) hardware products, service and support to be “poor” or “unsatisfactory.” By contrast only a small five percent minority of HP users, four percent of Dell customers and less than two percent of IBM users rated those companies’ hardware offerings to be “poor” or “unsatisfactory.”

Another factor playing a pivotal part in 2011 market dynamics is how Oracle will manage, support and integrate the Sun Microsystems’ offerings into its own product portfolio. This includes the aforementioned Sun Solaris OS, x86-based and SPARC server hardware and the open source MySQL database. Despite repeated public assurances from Oracle executives that it will continue to support and develop MySQL and even provide integration with other Oracle offerings, users are still wary. The Solaris and SPARC installed base of customers are equally restive and frankly skeptical based as much on what they haven’t seen in last 12 months since Oracle completed the Sun acquisition.

Conclusions

Oracle must act quickly and decisively to shore up and improve service and support for all its major products. Otherwise, customers – particularly the already ravaged and diminished Sun Microsystems Solaris, MySQL, and SPARC and x 86 server installed base will continue to decline and defect. They will be encouraged by rival vendors, particularly IBM, HP and Microsoft, who will continue to aggressively capitalize on user confusion and dissatisfaction to entice corporations to their respective platforms.

IBM and Microsoft are very well positioned at present and over the next 12 months. IBM’s AIX server operating system, DB2 database platform and System x and Power Systems communities are solid, stable and very loyal. The fact that 72% of survey respondents to ITIC’s January 2010 Database survey said they hadn’t switched DB platforms in the last three years and the fact that it’s harder for very large enterprises in market segments like banking, financial and insurance (traditional IBM strongholds) to switch because of the legacy investment, bodes well for the company. Many of these enterprises have mature DB environments that are likely to remain stable for many years to come.

In Microsoft’s case the ongoing, tangible improvements to both the Windows Server 2008 R2 and SQL Server 2008 R2 platforms make them extremely robust, reliable enterprise ready solutions. Microsoft’s close partnership with server hardware vendors Dell and HP provides Windows Server with a solid foundation that bolsters the overall reliability of the OS. Microsoft also has a very strong developer community, combined with a vibrant reseller channel, puts Microsoft in a good position to expand its presence into SME and enterprise organizations.

By contrast the Oracle customer base and associated developer communities – particularly Open Source developers – remain extremely skeptical and wary.

Oracle also faces other challenges that could hamper its efforts to ameliorate its all-important technical service and support issues. The company’s myriad acquisitions over the last five years could continue to be an unwelcome distraction and hamper efforts to rapidly respond to customers and developers. That said, on the plus side, Oracle’s financials continue strong. The company continues to see strong demand for new software license renewals and maintenance plans. Oracle posted has quarterly earnings growth of 28.30 percent and quarterly revenue growth of 46.50 percent in its latest financials. It’s profit margins are a healthy 21.18 percent and return on assets stand at 21.88 percent.

The key to Oracle and any vendor’s continued success is to put customers first. According to the findings in our survey, Oracle would be wise to fix its service and support problems fully and quickly.

The Patent Game: Everybody’s Playing, You Snooze, You Lose

Laura DiDio — Thu, 16 Dec 2010 15:56:01 +0000

“Let the future tell the truth, and evaluate each one according to his work and accomplishments. The present is theirs; the future, for which I have really worked, is mine.” Nikola Tesla

Thomas Edison and Nikola Tesla have a lot in common with Apple, Google, HTC, and Motorola & Research in Motion.
They were/are all warriors in the ongoing war to see who can amass the largest number of the most lucrative technology patents. Edison and Tesla waged their battle from the late 1860s through the 1920s and the stakes were just as high then as they are now.
Nary has a week gone by without mention of the latest contretemps among the high tech industry titans. There’s been no cessation of hostilities during the holiday season. If anything, top tier companies have become even more aggressive about solidifying and extending their dominance in and out of their core competencies as 2010 comes to a close.
This week is no exception. Now comes word (still rumored albeit, absent any confirmations or denials) that a Who’s Who of high tech Titans, including: Apple, Google, HTC, Motorola, Nokia and Research in Motion (RIM) have been engaged in a bidding war over the past six months to acquire a staggering 4,000 patents owned by Canadian telecommunications firm Nortel. You may recall that Nortel filed for bankruptcy in June 2009. Though it was unsuccessful in emerging from Chapter 11, Nortel still has great value. It holds patents in some of the technology industry’s most pivotal sectors including mobile phones, PCs, wireless infrastructure — the latest 4G wireless technology — Voice technology (VoIP) and Web-based advertising, to name a few.
So it’s not hard to see why Apple, Google, HTC, Motorola and RIM covet those patents.
Back to the Future: Edison vs. Tesla and the Fight for Patents
Ironically, in the late 19th and early 20th Centuries, Edison and Tesla famously waged increasingly acrimonious battles for patent rights to precursors of the aforementioned technologies. Likewise, Alexander Graham Bell competed against Elisha Gray during this same time period to patent the telephone system.
History records that Edison emerged victorious because of his business acumen. Edison knew that the key to succeeding in technology was to monetize his inventions. The surest and swiftest way to do that was to patent his own inventions and swoop down and buy up his rivals’ patents by the dozens, sit back, collect the royalties and establish his reputation as a genius.
The Croatian-born Tesla, who worked for, competed against and whom many believe was the true genius and superior inventor, was ultimately was overshadowed by Edison.
Edison was assigned 1,093lifetime U.S. patents beginning in 1869 with US Patent No. 90,646 for the electrographic voice recorder and ending with his final patent in 1926 for a design for a phonograph cabinet. Edison’s outpaced his former employee and later acrimonious rival Tesla patent output by a 10-to-1 margin. Tesla holds 112 patents registered with the US Patent and Trademark Office (USPTO) from 1886 through 1928, with his final patent being for an “Apparatus for Aerial Transportation” or a flying machine. Tesla holds over 800 lifetime patents.
The rivalry between the two heated up in the late 1800s when they each developed competing power systems. Edison promoted direct current (DC) while Tesla championed alternating current (AC). George Westinghouse bought Tesla’s system while Edison DC system became the foundation for General Electric one of the world’s largest multinational companies.
Additionally, almost all of Edison’s patents were commercial successes. Tesla monetized his inventions and patents early on after leaving Edison’s employ and working for Westinghouse. However, once he went out on his own, he became the Linus Torvalds of his day: he wanted to make the technology behind many of his ideas “free.”
At the dawn of the 20th Century, Tesla’s most cherished dream was to create a network that would transmit audio and video wireless energy signals around the world by linking telephone and telegraph networks. Tesla’s vision was to transmit information, weather and stock reports and even pictures. Sound familiar?
In 1900, Tesla obtained $150,000 in funding from financier J.P. Morgan. That was a hefty research and development (R&D) fund that would be worth tens of millions in today’s currency. Tesla constructed his “wireless broadcasting system” tower in Shoreham, Long Island, New York. Unfortunately, it was never completed or fully functional. J.P. Morgan pulled his funding when he realized that Tesla wanted to provide “free” energy.
Tesla lived to be 86 years old, dying alone and impoverished in the New Yorker Hotel in 1943. His proponents claim that he could have eclipsed Edison’s 1,093 patents and become the preeminent inventor and recognized genius of his era, had he been able to afford the fees necessary to file the patent applications. According to Paul Brown an IT technician at the US Patent and Trademark Office (USPTO), the fees for filing patents for individuals can range from an initial investment of a few hundred dollars to several thousand for repeated filings and information before the patent is assigned. “It’s expensive for an ordinary person,” Brown says.
Patently Flush – with Cash
Fast forward to 2010 – 2011.
For companies like Apple, Google, Hewlett-Packard, IBM, Intel, Microsoft, Motorola and RIM a few thousand dollars in fees is spare change. And it’s more expensive for these companies to pass up patents.
Most of the top tier high technology firms have no fear of going broke.
Apple currently has $25.62 billion in cash and no debt, while Google has $33.38 billion in the bank and just $2.12 billion in debt. Those are among the biggest war chests in Silicon Valley. Wall Street likes to see companies make strategic investments; it increases their valuation and market capitalization.
There are several main objectives spurring these industry giants to spend millions and possibly in excess of billion in pursuit of Nortel’s patents. They are:
• To keep competitors from getting them
• To grow by acquisition, strengthening leadership position and weakening rivals
• To ensure a recurring revenue stream via royalties and licensing rights
• To insulate the company from potential lawsuits involving use of IP in products
• To use the existing IP, improve upon it and spur the release of innovative new products
• To keep several technological steps ahead of competitors
• To potentially resell the patents after purchasing them
In their desire for dominance – both within their respective core competencies and to expand into new markets — all of the top tier high tech vendors are bumping into one another. Google is not just a search engine company, Apple is not just a consumer hardware manufacturer and Microsoft makes a lot more than Windows and Office.
To high technology firms, patents represent a very real and powerful form of currency. It’s like playing Monopoly, acquiring Boardwalk, Park Place and all the utilities and then putting up houses and hotels and charging anyone who lands on your property a fee – in this case licensing and royalty rights. They are the difference in collecting monies or potentially costing a company millions or billions in legal fees and settlement costs in the event one is sued for patent infringement.
Patents Breed Lawsuits & Trolls
Patents are fertile breeding grounds for controversy and lawsuits. For every patent filed by and assigned to inventors like Edison or Graham Bell or large multinational corporations like Apple, IBM, Intel, HP, Microsoft, Motorola et al, there are rivals like Tesla, Gray and other corporations who claim (sometimes truly) that they got beat to the patent office by minutes or had their ideas stolen outright.
One would be hard pressed to identify a single instance of a major patented invention that has gone unchallenged.
It doesn’t matter whether the product is as facile as a bending straw or a smile button, or as complex as the design for a new wireless communications system or software application with tens of millions of lines of code.
Lawsuits dog patents like feathers stick to hot tar.

In the last decade alone, most of the high technology vendors have sued, been sued and agreed to pay each other billions to settle patent infringement lawsuits after protracted and enervating legal battles. One could write tomes about even a single instance where one or more corporations is challenging a competitor on a specific patent.
Just as patents are big business, so are the lawsuits that accompany them. There’s a very thriving and growing industry around patent “trolls.” These are companies that purchase patents from other firms – many of which have filed bankruptcy or are going out of business – for the express purpose of suing companies that use these patents. The patent troll business is increasingly sophisticated. The trolls do their homework, discover the net worth and revenues of the patent users and then contact them, threatening to sue for patent infringement if the alleged infringer doesn’t ante up with settlement fees. The trolls are usually clever enough to ensure that the settlement fee doesn’t exceed the company’s ability to pay. And usually the settlement fee is less expensive and far less time consuming than a lengthy legal battle.
The American Intellectual Property Law Association (AIPLA) based in Arlington, Va. publishes a bi-annual Economic Survey. This research calculates the length of time and average costs associated with defending against patent infringement suits based on the monetary value of the IP at risk. In the top 20 cities, the cost ranges from over $1.5 million to well over $10 million and the case may drag on for years. AIPLA’s most recent “Report of the Economic Survey 2009 found that the median cost of litigation for cases with estimated damages of under $1 million was $650,000. For cases with projected damages of $1 million to $25 million companies could expect to spend an average of $2.5 million in legal fees. And for patent infringement cases involving damages in excess of $25 million, the average cost of litigation is $5.5 million.
In the last decade alone, Microsoft has spent billions in settling copyright and patent infringement cases with companies like Sun Microsystems (now owned by Oracle) and Novell. So it was a Happy Thanksgiving for Microsoft on November 26, when via CPTN Holdings LLC, (a consortium of technology companies that it organized) Microsoft purchased 882 patents from long term rival Novel $450 million cash, according to a US Securities and Exchange Commission filing submitted by Novell. This is a veritable bargain for Microsoft. In addition to saving money, Microsoft won’t be burdened with the distraction of having its executives spending valuable time giving depositions.
Microsoft is hardly alone. In March of this year Apple sued rival phone maker HTC of Taiwan and filed a complaint with the U.S. International Trade Commission, charging that the company infringed on 20 Apple patents related to the iPhone’s graphical user interface (GUI); as well as the hardware and software design. Apple is seeking a permanent injunction against HTC prohibiting them from importing and selling infringing devices into the U.S. market.
The smart phone, mobile and wireless markets are among the hottest technology arenas. It’s no surprise then that competitors are flocking to these lucrative technologies and that the competition and the number of patent infringement and intellectual property suits is increasing. One would be hard pressed to name a major vendor that is not being sued or suing one or more of its rivals.
Purchasing patents is a smart defensive and offensive strategy. Once you buy a patent you lower your risk and exposure to lawsuits and your firm gains an ongoing source of very lucrative revenue. And in today’s highly competitive fast paced world, holding IP rights to specific patents boosts companies’ chances of getting more innovative products to market more quickly at a fraction of the R&D costs associated with developing a product organically – from scratch.
High technology firms from established players to upstart startups will play the patent game to win. A quick look at the numbers tells the tale: companies are buying up patents at record numbers.
Company Patents Assigned
Apple 3,601
Google 553
HP 40,392
IBM 63,227
Intel 61,607

Microsoft 69,575

Motorola 55,366
Oracle 10,892
RIM 279
Source: US Patent and Trademark Office
The vendors don’t release how much they make and how much they save by purchasing patents but you can bet it’s a very substantial amount and growing by leaps and bounds.
Patents are pure platinum. They represent a sound investment, money in the bank, a recurring revenue stream, a powerful leverage and insurance policies all rolled into one. You can bet that Ballmer, Jobs and Schmidt know that and won’t make the same mistakes as Tesla.

As Ellison Rips Rivals, Oracle Services Slip, Support Prices Soar

Laura DiDio — Sat, 20 Nov 2010 19:47:22 +0000

Memo to Larry Ellison: The Roman Coliseum halted gladiator combats around 435 A.D. SAP has thrown in the towel and has no interest in continuing a court battle. Hewlett-Packard executives are refusing to accept service on your lawsuits and HP’s newly named chief executive Leo Apotheker is laying low, presumably dodging your increasingly vituperative verbal assaults. You’ve got no takers for the bloody, bare knuckles brawl you crave. What does that tell you?
It should signal an end to the Circus Maximus sideshow but it won’t.
No one desires this much attention or sticks their chin out spoiling for a fight like Ellison. And in an industry like high tech that’s overflowing with giant egos, that’s saying something. It’s true that Ellison’s antics always make for reams and reams of good copy. Reporters calling for comments on the latest developments don’t even bother to suppress their mirth. Enough is enough, though. The Larry Ellison Show would be more amusing if corporate customers weren’t getting caught in the crossfire.
The ongoing court case involving SAP’s acquisition TomorrowNow is not of course just about wresting an enormous $4 billion settlement out of SAP for copyright infringement. Where Oracle’s chief executive is involved, it’s never just about the matter at hand. There’s always a bigger agenda and it usually involves a grand spectacle.
In this case, Ellison is attempting to shoot and wound/kill two competitors — SAP and Hewlett-Packard with the same bullet — all the while “treating” industry watchers to a front row seat to his latest histrionics.
Remember that 60s axiom, “What if they gave a war and nobody came?” That’s exactly how competitors are reacting to Ellison’s bitter, bellicose attacks. The other combatants are surrendering (SAP) or hiding from him (HP’s Apotheker) and Ellison refuses to cease hostilities.
One can only shake one’s head at the serio-comic spectacle of SAP executives who have admitted that the now defunct TomorrowNow infringed on Oracle’s copyright. Earlier this week SAP co-CEO Bill McDermott apologized to Oracle in Federal court (when does that ever happen?), acknowledging that SAP had not been “appropriately vigilant” in overseeing the actions of TomorrowNow. For those not familiar with the case TomorrowNow illegally downloaded software and support documents from Oracle Web sites.
Ellison is unlikely to get that $4 billion in damages he claims Oracle is owed for TomorrowNow’s copyright infringement. Ellison testified that up to 30 percent of Oracle’s PeopleSoft customers and 10 percent of Oracle’s Siebel Systems users might have defected. But when pressed to provide actual figures, he revealed that Oracle had only lost about 350 customers and not thousands.
Oracle customers concerned over rising support costs, product security issues
Ellison should count his blessings. Oracle may in fact face customer defections in double digit percentages over the coming months and he won’t have anyone to blame but himself.
Over the past four years, Ellison has spent over $40 billion, gobbling up over 40 companies including large companies like PeopleSoft, Siebel Systems, BEA Systems, Sun Microsystems and ATG. Under the best circumstances, even the most amicable and complementary mergers and acquisitions are challenging for the merged entities and their respective installed customer bases. Oracle’s seemingly non-stop M&A spree has been characterized by several, very public, protracted internecine conflicts – most notably PeopleSoft.
Ellison continues to spew venom against his rivals while Oracle’s own customers fume. The Sun Microsystems SPARC, Solaris and MySQL users or what’s left of them, are increasingly restive. They are rightfully concerned about the fate of these acquired products under Oracle’s brand. They are also increasingly vocal in their complaints about rising service and support costs and worsening security. Oracle’s own database platform has had the dubious distinction of recording the highest number of security vulnerabilities of any of the major databases for the last eight years, according to statistics compiled by the National Institute of Standards and Technologies (NIST).
On these subjects Ellison is silent.
Last week, Oracle sought to staunch a backlash from confused and frustrated MySQL users worried about new pricing and packaging options. Rumors swept the Web that Oracle was reportedly doubling the pricing. There’s more to the story than that, but the MySQL open source database pricing and support has increased since Oracle acquired Sun. To be fair, Oracle simplified the complex MySQL product packaging and support pricing structure that existed under Sun. Oracle now gives all MySQL users 24×7 global support. Under Sun, users who purchased the MySQL Basic package for $599 were not entitled to any phone support. Oracle now gives MySQL Basic customers support; however the new entry level pricing has risen from $599 to $2,000 for the Standard Edition. Additionally, large enterprises that paid Sun Microsystems $4,999 for the MySQL Cluster Carrier Grade Edition also got sticker shock: Oracle hiked the price to $10,000 per server.
And that’s not all. Earlier this year, Oracle quietly also initiated widespread changes to the Sun Microsystems’ SunSpectrum support (which officially ended in mid-March) replacing it with a new program. This significantly hiked support costs for many former Sun customers at a time when many businesses are struggling to find the funds for new product upgrades. On a positive note, support renewals for existing SunSpectrum contracts are now priced at a flat annual price based on the individual user’s SunSpectrum contract. The renewal price is the same as the SunSpectrum contract currently in place. However, users who read the fine print, will note that Oracle changed the terms and conditions of its hardware warranties and Premier Support for Systems contracts.
Translation: Oracle cut back on standard support services and will provide onsite coverage only for specified products. Oracle’s new product coverage and support fees for the former Sun products and services take the concept of “nickel and diming” to new heights.
Customers that want 24×7 coverage, onsite response and faster responses times above and beyond a limited one-year warranty and Monday through Friday phone support will pay handsomely for the top tier coverage. Oracle now requires customers to buy support for every component, part and spare part they order. There are no add-ons to existing contracts; customers don’t have the option of cancelling contracts and customers receive not credit for any equipment covered under their contracts if they decide to take them out of service or dispose of them.
Corporations that opt not to purchase a support agreement at the time they buy their products will pay a hefty “reinstatement fee” of 150 percent of the standard support for the period of time between the initial product sale and the date they purchase the support. The 150 percent fee is exclusive of the standard yearly support contract prices!
Businesses that want to hang on to their capital expenditure monies are well advised to instruct their IT managers to learn how to install and replace parts themselves. Oracle will charge customers incremental fees to install any “self-service replacement part.”
Oracle is not alone in initiating price hikes for service and support. But its users might have less cause to grumble if they were satisfied with the quality of the support.
The latest ITIC 2010-2011 Global Server Hardware and Server OS Reliability Survey, which polled over 400 businesses worldwide found that Oracle products received the lowest ratings for security and for the quality of its service and support of any of the major vendors. Only 31 percent of the respondents gave Oracle an “excellent” or “very good” rating for product performance, service and support. This is in sharp contrast to the over 75 percent of survey participants who gave rivals HP and IBM and 70 percent of Dell users who gave those vendors “excellent” and “very good” marks for their hardware product performance, service and support.
And in Oracle’s core competency databases, both IBM’s DB2 and Microsoft’s SQL Server significantly scored higher satisfaction ratings among the survey respondents. Over 80 percent of those polled gave IBM DB2 and Microsoft SQL Server “excellent” or “very good” ratings compared to the 43 percent of respondents who gave the Oracle DB an “excellent” or “very good” rating.
Some of the anecdotal user comments about Oracle support were scathing.
“Our Sun support has become even more abysmal since crazy Larry purchased them; it’s hard to believe,” remarked an IT manager at a large healthcare organization with over 100 servers.
Oracle registered the highest percentage of dissatisfied users, with 20 percent or one-in-five respondents judging Oracle (Sun) hardware products, service and support to be “poor” or “unsatisfactory.” By contrast only a small five percent minority of HP users, four percent of Dell customers and less than three percent of IBM users rated those companies hardware offerings to be “poor” or “unsatisfactory.”
Focus on Business Not Brawling
It’s clear that SAP clearly has no interest in continuing its court battle with Oracle. Since Ellison is obviously still spoiling for a fight he might instead get himself booked on a TV show like “Survivor” or Donald Trump’s Celebrity Apprentice. Alternatively he could see if one of the boxing associations will oblige him and arrange a match with one of their champions.
Ellison and Oracle should let the lawyers hammer out an appropriate settlement with SAP. And for the sake of its large common customer base, call off the search to serve Apotheker the subpoena, tone down the anti-HP diatribe and get back to work.
The best thing Oracle can do is to concentrate on shipping high quality, high performance and highly secure products and delivering top notch service worthy of those pricy support premiums.
Otherwise, one of these days Ellison might be surprised to find that the Oracle customers, like the noble gladiator Spartacus have revolted and defected to competitors who wisely paid more attention to business than brawling.

Oracle & HP Appear to Have Made Up But They’re Gearing up for Battle

Laura DiDio — Wed, 06 Oct 2010 13:17:12 +0000

“When two elephants fight, it is the grass that gets trampled.” African proverb
Hewlett-Packard Co. and Oracle Corp.’s decision to settle the lawsuit over Oracle’s hiring of Mark Hurd as co-President after weeks of public wrangling is welcome news to everyone but the corporate attorneys.
But don’t expect the two vendors to just pick up and resume their former close partnership. It got very ugly, very fast. And the reverberations from Hurd’s hiring to HP’s recent appointment of Leo Apotheker, as the new CEO effective November 1, will be felt for a long time. HP’s decision to hire the German-born Apotheker, who is also the former CEO of SAP, is to put it politely a big “take that, Oracle!” Forget the surface smiles, behind the scenes Oracle and HP have their ears pinned back, teeth bared and swords sharpened as they gird for battle.
This was not the typical cross-competitive carping that vendors routinely spew to denigrate their rivals’ products and strategies. The issues between HP and Oracle are very personal and very deep. The verbal volleys Oracle CEO Larry Ellison lobbed at HP in recent weeks exposed the changing nature of this decades old alliance. It is morphing from a close, mutually beneficial collaboration to a head-on collision in several key product areas. Ellison’s words did more than just wound HP: they also opened up deep fissures in the relationship which are as big as the San Andreas Fault.
The HP/Oracle relationship will survive for the sake of their common customers but will likely never be the same.
The industry-at-large will probably never learn the “real” reason(s) the HP board of directors peremptorily ousted Mark Hurd as CEO. What is clear is that Oracle CEO Larry Ellison was motivated by more than just concern for his friend when he publicly castigated HP for the firing and extolling the business acumen of his tennis buddy. You just knew Ellison was going to give Hurd a prominent position at Oracle. And he did: co-President. In a regulatory filing earlier this week, to end the lawsuit, HP disclosed that Hurd will give back 325 thousands shares of restricted stock shares valued at $13.6 million that Hurd received as part of his severance package. Hurd gets to keep the over $12 million in cash he received. In exchange, Hurd will not disclose any of HP’s trade secrets.
This last stipulation is very sticky. Defining what constitutes intellectual property (IP) is just as tricky as defining obscenity. In over 30 years, the Federal Communications Commission (FCC) has been unable to achieve consensus on what constitutes obscenity.
How exactly will HP monitor Hurd to prevent him from telling Oracle what he knows about HP’s general tactics, strategy and relationships with customers, partners, competitors and general product directions and acting on them by counter-marketing and ? It’s not like they can put ankle monitor around his brain. Short of bugging Hurd’s communications, HP can never have 100 percent surety that some of their secrets are no longer secret. Hurd will use his knowledge of HP’s workings and wield it like a weapon – on Oracle’s behalf.
Any way you look at it losing Hurd to Oracle is a big blow to HP even if they did fire him for undisclosed inappropriate behavior.
Larry Ellison is many things. But of all the many adjectives, epithets and sobriquets that have been used to describe him and invectives that have been hurled at him, stupid is not one of them. Mr. Ellison has a plan. It most assuredly involves the aggrandizement of Oracle at the expense of competitors as his firm increasingly finds itself in head-to-head competition with HP. Why else, would he effectively trash the decades long, mutually beneficial and collaborative partnership between his firm and HP and then deliver the coup de grace by hiring Hurd?
The HP Board of Directors, while more reserved and civil than the outspoken and openly bellicose Ellison, is just as committed to the ongoing fight for high tech supremacy. Outwardly HP will maintain its dignified and understated mien but behind the closed (and hopefully not bugged) doors of its boardroom, the HP “suits” are plotting each move and counter-move with great deliberation. Their decision to file suit against Hurd scant hours after Oracle announced his appointment as co-President of the database market leader, shows that they’re shedding the velvet gloves in favor of the iron fist.

Regardless of the settlement, the underlying reasons that HP said it filed suit against Hurd for taking the Oracle co-Presidency: “…In his new position, Hurd will be in a situation in which he cannot perform his duties without necessarily using and disclosing HP’s trade secrets,” still exist.

Hurd and Oracle are highly unlikely to steal any of HP’s IP with respect to specific products and engineering. But there’s a lot of gray area surrounding IP and what types of knowledge are already in the public domain. You’d better believe that both HP and Oracle have set up war rooms in their respective boardrooms.
Make no mistake; there will be casualties of war.
And to quote the African proverb, the blades of grass in this fight are the respective customers, third party suppliers as well as the sales and distribution channels that support the enormous HP and Oracle ecosystems.
According to International Data Group (IDC) statistics, HP is the world’s largest technology company by revenue, and the top PC and server vendor and Oracle is the world’s third-largest software company.
HP and Oracle by the Numbers
On paper HP and Oracle appear evenly matched. The notable exception is in revenues, even after a five year multi-billion buying spree, Oracle sales still trail significantly behind HP.

From Collaborative to Competitive
Until recently the two firms did not compete head-on. Though HP and Oracle’s management and styles were/ worlds apart, their partnership thrived despite such differences.
Oracle is defined by the brash Ellison, while HP executives take a low-key and platform agnostic approach to most high tech competitors excepting IBM. For years Oracle and HP were bound by their mutual rivalry albeit in different product arenas – Oracle competed fiercely with IBM’s DB2 database while HP and IBM competed in just about everything else including, PC and server hardware, as well as the lucrative services market.
After decades of publicly hurling invectives at one another, Oracle and IBM in the last several days have done an about-face and are now engaged in an almost embarrassing display of public affection. This love fest would truly be gag-worthy if not for the realization that Big Blue and Oracle don’t hate each other any less; at this point in time they just loathe HP more. It’s truly a case of: “the enemy of my enemy is my friend.”
IBM chief executive Sam Palmisano decided to seize the opportunity to blast HP, publicly castigating them in a September 15 Wall Street Journal interview. Palmisano gave a detailed litany of HP’s faux pas. They included mishandling Hurd’s ouster by giving him a $40 million+ severance package which he said was “not a good use of shareholder money”; allowing Hurd to slash HP’s research and development budget to $2.8 billion – just 2.5 percent of total revenue and for getting in a bidding war with Dell over the acquisition of virtualization storage vendor 3Par and paying more that what it’s worth. Palmisano’s most acerbic statement was that HP was in such a weakened state that IBM no longer considered them a competitor. Not true of course, but it stings just the same.
It was Ellison and Hurd’s turn to heap praise on IBM during the Oracle September 16 earnings call. Ellison called IBM “a great services partner,” and said his partnership with IBM is “absolutely critical.” Ellison positively gushed while observing that “IBM’s mainframes add value because they aren’t commodity boxes and serve a real need.”
HP has remained characteristically mum about Palmisano’s and Ellison’s comments but it is undoubtedly plotting a counter attack. .
Collaboration and “co-opetition” between HP and Oracle may exist on paper and publicly but there is open enmity behind the scenes.
Merger Mania
The reality is that all of the top tier high technology vendors are on a collision course with one another spurred on by the need to grow by acquisition rather than organically. In a challenging economy it’s a dog-eat-dog fight for corporate and consumer monies.
Consider this: In the last six years Oracle’s Ellison has spent as much on mergers and acquisitions – over $40 billion (including the January acquisition of Sun Microsystems for $5.9 billion) – as the company’s profits over a 30 year span. In Ellison’s grand strategy scheme, the moves make sense because a bigger Oracle can more equally compete with the likes of IBM and SAP. HP is keeping pace with Oracle in the M&A sweepstakes – having bought Compaq, EDS, 3Com and most recently swooping down and outbidding Dell Computer for virtualization storage company 3Par for $2.4 billion and security vendor ArcSight for $1.5 billion. And now HP is in a bidding war with IBM to buy Israeli based Radware which makes application delivery, application security solutions and load-balancing switches.
Winners and Losers
Corporate customers are the biggest and most immediate potential losers. Partnerships, mergers and acquisitions may look like a game of Monopoly on paper but there’s a lot at stake. Even the best of circumstances – an amicable and well planned purchase with little or no product overlap – there’s a certain amount of disruption that follows an acquisition. In these cases, it takes six months to a year to integrate and assimilate an acquired firm into the fold. Oracle’s acquisition of Sun Microsystems which includes Sun’s SPARC server hardware, Solaris operating system and the open source MySQL database has a lot of users concerned about the future of those product lines, despite the company’s public reassurances.
And while few distributors or users will go on the record, many of them are understandably nervous about the potential ramifications when their major hardware infrastructure and software vendors fall out.
Imagine you’re the CEO, CIO, CTO or VP of IT who has to make purchasing decisions for the next three-to-four year upgrade cycle. Can you trust that HP and Oracle have truly made up? Or are worried about when hostilities between the two will break out again and that your firm might get caught in the crossfire? Can you trust the promises of your vendor(s) to retain an acquired firm’s product portfolio? And even if they do, will the top engineers and product managers from a company like Sun (to cite just one example) remain with the company post-acquisition? Will the licenses carry over or will your organization face steep price hikes in volume licensing? Service and support is another big issue in a post merger entity. Once again, corporate customers are wise to ponder potential changes.
Organizations also get rightfully nervous that their vendors will get distracted by the public wrangling and potential lawsuits. These issues frequently lead to product delays and quality issues. Oracle is the world’s Number One database vendor and the Oracle database also has the dubious distinction of being the platform with the most security flaws. According to the National Institute of Standards and Technology (NIST), the government agency tasked with monitoring security vulnerabilities, it recorded a whopping 321 security vulnerabilities associated with the Oracle database from January 2009 through June 2010. That’s six times more than the 49 vulnerabilities Microsoft’s SQL Server notched and nearly triple the 121 security vulnerabilities recorded by IBM’s DB2 database during the same eight and a half year period. Though there’s no proof of a connection, the security issues associated with Oracle’s database spiked sharply in 2006 – around the same time, the company embarked on its merger and acquisition campaign and they’ve remained elevated over the past four years.
Though reluctant to speak on the record, corporate customers and distributors have some trepidation about the impact of the growing competition between HP and Oracle, even though the immediate crisis appears to be over. If you have concerns, now is the time to voice them and also exercise your right to comparison shop. Speak frankly with your sales representatives and resellers. Use the confusion to your advantage to negotiate for better terms and conditions.
The biggest potential winners in this fight are HP and Oracle competitors. IBM, Dell and other hardware vendors have been openly wooing Sun’s SPARC and Solaris customers ever since Oracle first announced its intention to purchase Sun. Those efforts will continue unabated. IBM and Microsoft executives are also undoubtedly contemplating special sales promotions to lure customers away from the Oracle and MySQL database platforms.
IBM’s Palmisano was right about one thing: HP seriously erred when it slashed its R&D budget to just 2.5 percent of annual revenue. It should rectify that immediately.
There’s another apt African proverb: “When the music changes, so does the dance.” And when it comes to vendors, there’s no such thing as a permanent partner.

HP, Microsoft Still Have Some ‘Splainin’ to Do on Application-to-Infrastructure Pact

Laura DiDio — Fri, 22 Jan 2010 15:41:29 +0000

The recently announced joint Hewlett-Packard/Microsoft Application-to-Infrastructure Model Partnership has intriguing possibilities for both companies and their respective and overlapping installed customer base. However, it remains to be seen how quickly and efficiently the two industry giants can deliver products and market the merits of the solution. Now $250 million is huge investment even for two high tech powerhouses like HP and Microsoft. So we know this is a serious committment.

To recap, HP and Microsoft said they will invest $250 million into their Frontline Partnership. The deal aims to deliver full, integrated stacks that support Microsoft’s Exchange Server and SQL Server, including management, virtualization and cloud implementations. The resulting product offerings will consist of pre-packaged application solution bundles that incorporate the aforementioned management and virtualization capabilities. The two companies said the pact calls for them to partner on engineering, R&D, marketing and channel sales.
Still, the announcement left many industry watchers with more questions than answers. As my colleagues Charles King and Merv Adrian noted in their Breaking News Review in the January 14 special edition of Charles King’s Pund-IT, HP and Microsoft “have worked closely for years, share tens of thousands of common customers and channel partners and have long supported each other’s interests.”
So what’s new about this announcement? That question should be answered during the coming months. A $250 million investment is considerable even for two high technology titans. It now remains for HP and Microsoft to execute on their promise to produce solutions that thoroughly integrate the two companies’ infrastructure and applications stacks to ship pre-configured and optimized solutions for Microsoft’s Exchange Server, and SQL Server, virtualization, cloud computing converged infrastructure and pre-packaged application tools.
But perhaps the most immediate and daunting challenge is for HP and Microsoft to deliver a product roadmap that also includes specific details about the pricing, training and services the two firms will commonly deliver. Above all, companies must market and sell this deal to the legions of skeptics. The high tech industry has witnessed numerous high profile partnership deals announced amidst much industry fanfare never to be heard from after the initial press releases.
Remember the Cisco Systems/Microsoft Directory Enabled Network (DEN) initiative of the late 1990s? No. Not many people do. Announced with great fanfare, this dream team was supposed to incorporate the functionality of Microsoft’s Active Directory into Cisco routers and provide network administrators with a more comprehensive means of managing various devices on their network. In reality, the Cisco/Microsoft DEN initiative was a partnership on paper only. There are dozens of similar examples. Hence, the skepticism that greets such announcements is understandable.
This is all the more reason for HP and Microsoft executives to follow up on last week’s announcement with quick, decisive action and not just more fodder for the PR Newswire. For example, when can we expect to see the first fruits of the so-called “deeply optimized machine environment” that will provide turn-key, pre-packaged and pre-integrated server, application, networking and storage solutions? Who are the specific target users and how will they benefit? How will Microsoft and HP license and service these products? Those are just a few of the questions that need to be answered.
Non-Exclusive Partnerships Sometimes Make Strange Bedfellows
The partnership also has especially intriguing implications for HP which now has pacts in place with all of the major virtualization providers, including Microsoft’s biggest rival, and VMware. The new HP/Microsoft Application-to-Infrastructure is a non-exclusive three year partnership. It’s worth noting that HP already has a deal in place with VMware, whose ESX Server is the market leader in server virtualization. Microsoft also gets a boost from this deal. Microsoft’s Hyper-V has been gaining ground, particularly among small and mid-sized corporations. However, it has a long way to go to catch up to ESX Server’s installed base, particularly among large enterprises, so this pact helps keep Microsoft competitive. Additionally, HP also delivers a full suite of management solutions that integrates VMware’s vCenter offering with HP’s Insight management product. HP and Microsoft intend to similarly integrate HP’s Insight and Microsoft’s Systems Center. So again, this helps Microsoft broaden the appeal of its virtualization appeal to its existing base and makes it a more attractive solution for prospective customers.
The partnership with Microsoft put’s HP in the proverbial cat-bird’s seat: it now has a full line of its own servers that runs all the VMware products and similar plans to support Microsoft’s SQL Server and Exchange Server. This gives HP the ability to offer a full line of integrated hardware and services customers their choice of virtualization vendors, while remaining agnostic.
From Microsoft’s perspective, the partnership with HP also has immediate value: it allows Microsoft – at least on paper – to keep pace with VMware, by working with HP, a top OEM hardware vendor and services provider, which is no mean feat. Former Microsoft executive Paul Maritz who now runs VMware is intent on rejuvenating that company and he knows that the way to solidify and expand VMware’s influence is to increase its stake in management and applications. Just last week, VMware purchased Zimbra, the open source Email and collaboration unit of Yahoo for a rumored $100 million. Not coincidentally, Zimbra describes its Collaboration suite as the “next generation” Microsoft Exchange server.
Microsoft clearly felt the need to respond in kind.
The plethora of technology and partnership deals such the HP/Microsoft Application-to-Infrastructure pact, serve as a reminder of the intensity of the IT industry’s competitive landscape – particularly in burgeoning markets like virtualization and by extension, nascent markets like cloud computing. No vendor can afford to rest on its laurels. They must continue to upgrade their product and services offerings to keep pace with the competition.
Microsoft and VMware will continue to try and top one another, and HP is the beneficiary of this ongoing rivalry. Let’s hope the end users are also winners, too.