A Race Foretold

 
 
By Eric Lundquist  |  Posted 2005-01-24
 
 
 

"The event has not yet started." That was the message I was getting from my media player as I tried to watch Oracles Web conference last week. And while I had to opt for the audio conference to hear from Larry Ellison and friends about the future of the Oracle-PeopleSoft combination, the message in my browser window seemed inadvertently appropriate to the subject matter of the Webcast.

Or maybe the browser message should have read, "The event is just now starting." Not just now starting only for Oracle, but also for such diverse vendors as Hewlett-Packard and Intel. The event, I believe, is that customers are ready to make some fundamental decisions about their technology infrastructure. And vendors, recognizing that readiness, have reacted by acquiring, repositioning and reorganizing their companies to be on the buy side of the customer evaluation process.

Last week, Oracle presented its plans for keeping Oracle, PeopleSoft and J.D. Edwards customers happy. HP picked last week to place its personal computer group under the printer group. And Intels soon-to-be new boss announced a plan to restructure the company with a platform orientation.

While the start of a new year is often an opportunity to lay out a companys plans for the coming months, this year seems unusually active in the business vision arena. Why? Three reasons: One, vendors need sales to justify their acquisitions and stated business expectations; two, the technology slowdown over the past few years has meant that vendors increasingly look for business by raiding their competitors customer bases rather than finding new customers; and three, the advent of open-source software has given customers the ability to explore technology choices beyond locked-down, proprietary confines.

The Oracle conference provided examples of all three trends. Oracle acted fast to embrace the PeopleSoft organization and quickly laid off about 5,000 employees, but the company also acted fast to promise that technology development under the Oracle, PeopleSoft and J.D. Edwards banners will continue apace. Oracle CEO Larry Ellison promised a lot in contending the company could continue developing products under all those banners while also building a new product platform that would incorporate all the operations. To promise less would give rise to the departure of large chunks of customers. Ellisons contention that many of the major upgrades will be available in a year will put a strain and a visible deadline on the combined Oracle development team.

HPs announcement that the company will combine its personal computer and printer operations under Executive Vice President Vyomesh Joshi acknowledges the job Joshi has done over the past three years. Printers and imaging products—once the poor siblings of the computer operations—have been the backbone of HP, while the other product lines resulting from the HP-Compaq merger have yet to live up to industry expectations.

As Ann Livermore, executive vice president of the Technology Solutions Group, responded in a chat session during an HP Webcast introducing the companys new server line, the thinking behind the reorganization under Joshi "is to have the new Imaging and Personal Systems Group be a head-on competitor to Dell." In a company moving toward everything being "digital, mobile, virtual and personal," as CEO Carly Fiorina repeated in an endless loop during the Webcast, for now the company is putting more emphasis behind the group that produces those most analog and tactile of products: printers, paper and ink.

The Intel reorganization under soon-to-be-CEO (in four months) Paul Otellini recognizes that customers want to build their applications on top of platforms that fit a cohesive plan rather than a conglomeration of chips with ever-faster performance. The success of the Intel Centrino as a mobile computing platform was a positive reinforcement of that for Intel, and the success of AMDs Opteron provided an example of what happened when Intel forgot the platform approach. As I said at the beginning, the event is just now starting.

Editor in Chief Eric Lundquist can be reached at eric_lundquist@ziffdavis.com.

Rocket Fuel