Oracle Exadata Ad Pulled After IBM Complaint

Oracle has agreed to pull advertising claims that its Exadata systems are much faster than IBM's hardware following an IBM complaint to the Better Business Bureau's National Advertising Division.

The Better Business Bureau said that Oracle has agreed to pull its advertising claiming superiority of its Exadata database machines over IBM systems; however, the company plans to appeal the bureau€™s rap over its claims.

The Better Business Bureau€™s National Advertising Division (NAD) on July 24 issued its second ruling this year against Oracle advertising€”for making deceptive, misleading claims about IBM hardware. NAD recommended that Oracle should discontinue use of its claim, "Exadata 20X Faster ... Replaces IBM Again," because Oracle failed to demonstrate that it had support for that performance claim.

The organization previously reached the same finding March 26 over another Oracle ad, "SPARC SuperCluster T4-4 runs Oracle & Java Twice as Fast as IBM's Fastest Computer," that ran for months in The Wall Street Journal.

IBM initiated the NAD action with a complaint. Oracle said it would voluntarily discontinue the challenged claims, but noted that it would appeal NAD€™s decision to the National Advertising Review Board, possibly coming back with evidence to substantiate its claim.

The advertising claims at issue appeared in a full-page advertisement in The Wall Street Journal and included the following:

  • €œExadata 20x Faster €¦ Replaces IBM Again€
  • €œGiant European Retailer Moves Databases from IBM Power to Exadata €¦ Runs 20 Times Faster€

NAD also considered whether the advertising implied that all Oracle Exadata systems are 20 times faster than all IBM Power systems. The advertisement featured the image of an Oracle Exadata system, along with the statement: €œGiant European Retailer Moves Databases from IBM Power to Exadata Runs 20 Times Faster.€ The advertisement also offered a link to the Oracle Website: €œFor more details€

IBM argued that the €œ20x Faster€ claim makes overly broad references to €œExadata€ and €œIBM Power,€ resulting in a misleading claim, which the advertiser€™s evidence does not support. In particular, the challenger argued that by referring to the brand name €œIBM Power€ without qualification, Oracle was making a broad claim about the entire IBM Power systems line of products.

Oracle, on the other hand, argued that the advertisement represented a case study, not a line claim, and noted that the sophisticated target audience would understand that the advertisement is based on the experience of one customer€”the €œGiant European Retailer€ referenced in the advertisement.

In an NAD proceeding, the advertiser is obligated to support all reasonable interpretations of its advertising claims, not just the message it intended to convey, the Bureau said in a press release on the issue. In the absence of reliable consumer perception evidence, NAD uses its experienced judgment to determine what implied messages, if any, are conveyed by an advertisement. When evaluating the message communicated by an advertising claim, NAD will examine the claims at issue in the context of the entire advertisement in which they appear.

In this case, NAD concluded that while the advertiser may have intended to convey the message that in one case study a particular Exadata system was up to 20 times faster when performing two particular functions than a particular IBM Power system, Oracle€™s general references to €œExadata€ and €œIBM Power,€ along with the bold unqualified headline €œExadata 20x Faster Replaces IBM Again,€ conveyed a much broader message.

NAD determined that at least one reasonable interpretation of the challenged advertisement is that all€”or a vast majority€”of Exadata systems consistently perform 20 times faster in all or many respects than all€”or a vast majority€”of IBM Power systems. NAD found that the message was not supported by the evidence in the record, which consisted of one particular comparison of one consumer€™s specific IBM Power system to a specific Exadata System.

NAD further determined that the disclosure provided on the advertiser€™s Website was not sufficient to limit the broad message conveyed by the €œ20x Faster€ claim. More importantly, NAD noted that even if Oracle€™s Website disclosure was acceptable€”and had appeared clearly and conspicuously in the challenged advertisement€”it would still be insufficient because an advertiser cannot use a disclosure to cure an otherwise false claim.

NAD noted that Oracle€™s decision to permanently discontinue the claims at issue was necessary and proper.

Oracle, in its advertiser€™s statement, said it was €œdisappointed with the NAD€™s decision in this matter, which it believes is unduly broad and will severely limit the ability to run truthful comparative advertising, not only for Oracle but for others in the commercial hardware and software industry.€

Oracle has said it has no comment for publication. However, in a statement, IBM said: €œIBM is pleased the National Advertising Division recommended that Oracle discontinue the use of what it described as an €˜overly broad claim€™ in the ad. We believed Oracle made false, misleading and deceptive claims in violation of advertising law.€

Longtime industry observer Rob Enderle, in a blog post on IT Business Edge, said the advertising incidents appear to point to deeper problems at Oracle.

€œOracle is one of the few companies led by sales, and sales-led organizations tend to function tactically, tend to trend more to high inaccuracy with advertising claims (particularly when their products aren€™t competitive) and have a tendency to create teaser pricing plans where what you think you are going to be charged is a fraction of what you are charged,€ Enderle said. €œAll of these are consistent with complaints common with Oracle customers.€

Enderle added: €œAt the core of Oracle€™s problem is clearly that its new hardware division isn€™t working out. We€™ve already seen internal communications from its own sales people (I believe the term used was "Sun hardware blows"). I€™ve personally reviewed a case (PULSE) recently where, in a mixed shop, Oracle wasn€™t even invited to bid Exadata because the IT organization felt the technology was obviously not competitive.€