Rating the Benefits

Will customers gain or lose from vendor smack-downs?

Oracle launches a hostile takeover bid for PeopleSoft and claims it will be good for the customer. SCO says customer benefit is a goal of its suit against IBM alleging IBM violated its Unix license. Palms acquisition of Handspring was touted, in part, as a way to "deliver more value to the customer." Are there any real customer benefits from these vendor smack-downs?

If you take the two basic reasons for investing in technology—a bottom-line benefit from doing more with less or a top-line benefit from extending your business reach—finding that elusive customer benefit becomes easier. Does the customer have more choice? Thats good. Does the customer have a more stable supplier? Thats also good. Or does the customer hold back on technology decisions because of uncertainty about the health of the vendor, the longevity of product lines and the general immobility caused by fear, uncertainty and doubt? When that happens, its not good for anyone.

Recently, I was at a meeting for editors at American Power Conversion (you know, the power supply people) in Rhode Island. Over the past several years and despite the tech industry downturn, APC has been building on its core business. APCs coolest—on several levels—product for the enterprise has been its Infrastruxure (its spelling) rack system. The typical user experience in designing and building a server room or data center is often one of delay, consultant overload, overbuilding and overbilling. For a different process, head over to www.apc.com and use APCs Web site to design your own server room, get a bill of materials and get a price online within 30 minutes. Whether you decide to use APC products isnt as important as the power the site hands to the customer. It is the equivalent of getting the real pricing details on a new car before you head to the dealers showroom.

"Rightsizing through modularity can save up to 60 percent of the physical infrastructure costs," said Neil Rasmussen, chief technology officer and a founder of APC.

But back to the vendor smack-downs: How do they rate, in terms of the customer gaining or losing power?

Oracle buying PeopleSoft: Although customers could gain from having an integrated system from database through applications, Larry Ellison has not convinced me that the current deal, which is based on consolidation through a hostile takeover, has any overriding customer benefit. Currently, Oracle execs are touting the benefits as mainly what they will not do, such as discontinuing PeopleSoft products. Sure, customers hate to be forced into a product migration, but Oracle needs to do a much better job of showing how the combined companies bring a better solution set to the customer base.

SCO suing IBM: I actually think this one has a benefit, although its in the category of unexpected consequences. Would it have been better for the SCO claims to have been resolved years ago? Yes. Would it be even worse for SCO to assert its claims a year from now, when Linux is even further along in its development as an enterprise platform? Absolutely. SCO has a right to protect its intellectual property. Its better to get this one out of the way now than create even more consternation several years from now.

Palm buying Handspring: This was a necessity. Palm has gone from being an industry leader in a new category to nearly being crowded out of the dance by newcomers, established computer vendors and just about every mobile handset developer. Palm needs the industry relationships developed by the Handspring team as well as the focus and drive of the Handspring executives when they come (and in many cases return) to the Palm organization. The customer benefit is a stronger, focused company offering alternatives to Microsoft-based vendors and the telecom giants.

Will a white knight appear to rescue PeopleSoft from the clutches of Oracle? Will the SCO suit end up being settled for some outrageous amount? I dont know, but I do know that whatever transpires, it will be pitched as benefiting customers. Whether the final outcomes really are to your benefit will be for you to decide.

Eric Lundquist can be reached at eric_lundquist@ziffdavis.com.