Correcting Oracle's misleading advertising

A couple of weeks ago Oracle ran an advertisement declaring that only 4% of SAP customers upgrade to the latest version of our product, confidently citing a Gartner Group research report that looked at the subject back in March of this year.

Gartner Group fired back, declaring that "the (Oracle) advertisement egregiously misrepresents the data." Gartner addressed the issue in a rather blunt post on their Ombudsman Blog. It is also worth pointing out that the analysts have clear rules about quoting their research in their advertising and Oracle clearly broke these rules with the full page ads they ran (why? because it's hard to unring the bell), but are now artfully working around this their website by referring to "recent research".

This Oracle claim is really beyond the pale. We are accustomed to sharp elbows in this business but there are times when a participant is such a bad actor that it really causes one to pause. What is terribly ironic (at least as far as Oracle's customers are concerned) is that this is a company that should be the last one to fly the flag on this issue given that their track record on product upgrades is so bad. Here are the facts on the subject, all based on "recent research", you decide for yourself who you would want to do business with:

• The Gartner report in question also stated that "less than 10 percent of Oracle's installed base will be live on v.10 of 11i by the end of 2005 (0.7 probability)." What Oracle is attempting to do is claim that all 10 versions of 11i are current releases and by adding up the percentages they get to 94% (which is actually qualified as a "predicted" number by the end of 2005 and not an actual... remember the report in question was authored in March of this year.)
• Oracle’s de-support of 10.7 in June 2003 essentially forced an upgrade. The Gartner report that Oracle uses states that Oracle had “driven users from v10.7 to 11i”.
  • SAP is providing end-to-end support for every current product in our portfolio through the end of 2009 and in the case of our ESA platform the support commitment goes through 2013.
  • In the March '05 Gartner report it was also noted that "SAP's flexible maintenance option will provide customers that want to embrace SAP's Enterprise Services Architecture (ESA) with an option to wait until it matures within future versions of mySAP ERP. This option also allows the deferment of the upgrade project costs for an incremental increase in maintenance fees."

• The poor quality of 11i was major factor in the frequency of upgrades following the initial release of that product

  • 5000 bug fixes were released in the first 6 months (Forrester, 2001)
  • It took two years and six releases before it was viewed as stable Gartner, 2002). To add insult to injury, Oracle de-supported the 8i database this year meaning that customers who were on the minimally stable 11i.6 release were forced to upgrade again.
  • 11.9, which came out in 2003, still had bugs according to Gartner (2003), and their most recent release will probably be identified with bugs, after it has been out long enough for customers to try it.
  • Oracle forced customers to upgrade to obtain bug fixes by sending out family packs with patches and bug fixes
  • According to an AMR study (2004), Oracle customers were more likely than average to identify bug fixes as a reason for upgrading.


• SAP customers do not upgrade as often as Oracle customers because of the value its software is already delivering. According to AMR, the maturity, or rich functionality, of SAP’s software reduces the necessity of customers having to upgrade. In addition, according to AMR, it better enables SAP customers to upgrade to achieve desired changes in business processes.

• According to AMR (2004), Upgrades cost an average of $1839 per user and one man-week of labor for every business user. Upgrades, even when they provide value, are disruptive to customers and SAP understands this.

• With Fusion, Oracle customers will have to undergo a number of upgrades similar to what occurred with e-Business Suite, which was a smaller undertaking than Fusion. This is reflected in Gartner’s (2005) and Forrester’s (2005) cautions to customers about the implications for Fusion of Oracles history of poor quality and immature software.

• SAP’s approach is to make each software version a high quality product, with mature functionality that works as promised.  SAP has a stringent process for quality, and does not release a product until it has been thoroughly tested.  Analysts, (e.g., Giga, AMR) agree that SAP leads in delivering quality software.

• This highlights another difference between SAP and Oracle. When SAP stated it would invest in Research and Development, at the expense of increasing its own respectable profits Oracle’s CEO chided SAP for this customer commitment. “Mr Ellison ridiculed SAP's decision to sacrifice short-term profit growth. 'We're (earnings per share) obsessed,' he said."

Comments

[Vinnie Mirchandani]

I believe Oracle also used the data when it rolled out its OFF SAP campaign in June.

I do think SAP has a challenge within its user base - see my viewpoint at

http://dealarchitect.typepad.com/deal_architect/2005/12/the_pot_and_the.html