How to Negotiate with Oracle Post-Canary Swallowing

By Lisa Vaas  |  Posted 2004-12-21 Print this article Print

Opinion: When customers head into licensing negotiations with Oracle post-PeopleSoft merger, they should be prepared to wage a little psychological warfare, negotiating experts say.

When it comes to sales and to negotiating licensing and support, Oracle has always been stocked with tough-as-nails negotiators. The company at times has attempted to domesticate its team, such as in August when it released its first-ever set of guidelines to instruct its direct sales staff in North America on how to play nice with partners. Feedback on that move has been that its like putting a Band-Aid on a gushing artery, however. And it hasnt helped customers that, oftentimes, Oracles terms are confusing, leaving customers scratching their heads as they try to figure out when to migrate or convert licenses to a new model and how to figure out if its cost-effective; when to buy an applications suite versus components; and how to determine support and product maintenance costs.
If you think its been tough so far, however, just think of what negotiations will be like now that the cat has swallowed the PeopleSoft canary. Running your PeopleSoft applications on Oracle databases? The following negotiating tips, gleaned from a duo of experts, are especially relevant to you.
Not that everyone thinks customers are up a creek at this point. Peter Burris, an independent analyst, told me that Oracle will "absolutely have to continue" to slash prices post-merger—just as both Oracle and PeopleSoft did while this battle was ongoing—if it wants to continue to acquire new customers. But how many new customers are there for databases and ERP (enterprise resource planning) applications? The number of new applications going in are pretty modest, compared to the late 90s, when everybody was doing ERP and grand, unified applications were going to solve everyones problems. Since then, Burris noted, people have stepped back and said hey, lets not try to solve everything at once with one big application. "A lot of the activity is in much more segmented problems being solved, utilizing technologies that are relatively easy to implement and relatively inexpensive to manage," he said. "Certainly MySQL, the whole Microsoft [SQL Server stack], and Sybase still does OK in that world." True, you can plug MySQLs open-source database into a certain segment of jobs, and true, vendors are all hot to get their hands on SMBs (small and midsized businesses) that want to do modest things with commodity databases, such as serving up Web pages. But when it comes to serious enterprise girth, IBM and Oracle are the players that most people take seriously. And when it comes to enterprise applications, we get down to Oracle CEO Larry Ellisons take on the software market, which is that its mature and ripe for consolidation. Next Page: Lessen dependence, or give the impression of it.

Lisa Vaas is News Editor/Operations for and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.

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