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Competitors Weigh In on Oracle's Single-Stack Plan

SAP says it's a fantasy while IBM asks "what took you so long?"

Oracle's plan, laid out last week, to offer a single technology stack combining Sun hardware and operating systems with Oracle middleware and applications is either hopelessly naive or woefully late to the market. At least that's the perspective of Oracle's two biggest rivals, SAP and IBM.

Oracle says its single-vendor stack will eliminate many of the hassles faced by modern IT shops, starting with integration and deployment and extending to ongoing administration and upgrades. In the bargain, Oracle is promising both better application performance and reduced administrative overhead within customer data centers.

The rationale sounds good in theory, admits Kaj van de Loo, senior vice president of technology strategy at SAP, but it doesn't square with customer practices. For years, he says, companies have been working toward standardization in their data centers, specifying hardware, operating systems and systems management software, and training people accordingly. In many cases the choice is HP-UX or IBM-AIX for large applications and Windows for everything else.

"If you dump a new stack into that data center, the total cost of administering the overall system landscape is going to go up," van de Loo says. "It doesn't matter if that one piece is easy to manage or upgrade, it's a foreign object that the data center will have to learn how to handle."

Perhaps Oracle shops already running Sun hardware would face minimal, one-time adjustments, van de Loo acknowledges. But he doesn't foresee other customers ripping and replacing current technology to adapt to new standards.

Van de Loo's analysis may seem contradictory, given that SAP itself preintegrates its All-in-One software for midsized companies with hardware from HP and IBM. But those offerings, as well as SAP's Business Warehouse Accelerator and BusinessObjects Explorer appliances, aren't comparable to enterprise applications, van de Loo insists.

"The [prepackaged] model works for special-purpose appliances... but ERP systems require configuration that is at the heart of how you run your company; you really want to adapt it to your business," he says. "Appliances are best for products and solutions that don't change a lot over time."

Many observers say Oracle's integrated-stack push harkens back to the single-vendor solutions of the 1960s, the era in which IBM established its grip on the mainframe market. Oracle, too, has invited the comparison, but it says the key difference is that its offerings are based on open, rather than proprietary, operating systems, programming languages and application integration standards.

IBM says it's about time Oracle woke up to the advantages of integration. "Oracle is now acknowledging what IBM has been delivering for several years on its Power Systems and for decades on its System Z," says Bernie Spang, IBM's director of product strategy. "The more we integrate the software with the hardware, take advantage of the architectures and put it all together in a well-tuned package, the more time and cost we can save our customers."

Unlike SAP, IBM does not offer ERP or CRM applications, but it has been bundling and preintegrating more of its modern-era software. For example, The IBM Smart Analytic System introduced last year goes beyond the data-warehouse-appliance model proven in recent years by adding data-integration and business-intelligence modules. IBM also offers vertical-specific "solutions" options for the system addressing insurance, banking, retail and other industries.

But at its core, the Smart Analytic System is a data warehouse appliance. Analytic applications running on top might provide decision support, but they are not akin to the backend, transactional systems that Oracle now plans to deliver on a single stack. SAP does offer the transactional applications, but van de Loo says the company doesn't have to own or ship all the pieces in one box into order to deliver well-integrated technology.

"We have a big building in Walldorf that's full of SAP and partner engineering people who test up and down the stack," says van de Loo. "I don't see how it could get much better just because somewhere up the organization you're part of one company."

If recent history in the data warehouse appliance market is any indication, the one-box, one-vendor approach may be more compelling than SAP is counting on. "The days of the old, roll-your-own data warehouse approach are rapidly waning," says James Kobielus, an information management analyst with Forrester Research. "In today's market it comes down to which appliance from which vendor is right for your needs."

It will be interesting to see if enterprise applications follow the same path.

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