How to Negotiate with Oracle Post-Canary Swallowing

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.

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