Oracle and IBM: Two Different Takes on Enterprise Integration

Loraine Lawson

It's hard to believe that Oracle's Larry Ellison actually once turned his nose up at the idea of acquiring a company, retorting, "We write software, we don't write checks."


It's also hard to believe that, some $35 billion spent buying five dozen acquisitions later, Oracle's about to take on IBM using the business model IBM once excelled at-selling hardware and software. And yet, that's exactly where things seem to be headed, according to this Reuters Special Report on Ellison and his role in merging Sun into Oracle.


It's an excellent feature that provides insight into Ellison's plans for Oracle and his very hands-on management of the Sun integration. It's particularly noteworthy in that Reuters managed to secure an interview with Ellison himself and write a piece about Ellison without once dissing SAP.


That said, there Ellison makes plenty of critical remarks about Sun's previous executives, especially Sun CEO Jonathan Swartz, as well a few darts toward Oracle's new main rival, IBM.


It turns out, Ellison excels at integration, at least from a management standpoint, which might explain why he's also betting on integration as a key differentiator for Oracle. The article says his mantra is: "Best of breed" is good for dog shows, not for software-a hit at those who argue for best-of-breed solutions over integrated solutions from one vendor. The article includes this telling quote from Ellison:

Where we think we'll make our money -- where we think we're able to differentiate ourselves from IBM and everybody else -- is by building complete and integrated systems from silicon all the way up through the software, all prepackaged together.

In fact, Oracle seems to be stealing IBM's playbook. Its first product using Sun technology is the Exadata, which, the article notes, is a 1-ton, 6-foot-tall machine that costs more than $1 million. Maybe you technologists can help me out here, but in what world is that NOT a mainframe?


Dave Gelardi, the vice president of systems strategy at IBM (you know, the company historically known for producing mainframes), responded by calling Exadata "a one-trick pony that has no ability to integrate," although Big Blue apparently cared enough to respond with a range of integrated systems.


Integration, it seems, could become a strategic differentiator here. Certainly, Ellison thinks companies are tired of integration headaches and want a complete solution. In fact, Oracle CIO Charles Phillips recently said outright the way to solve IT's integration problems is to standardize on Oracle.


IBM, on the other hand, does have "the world's largest technology-services organization, which generates billions of dollars a year in fees by helping companies build customized systems," as the article points out. It's also heavily invested in its profitable Websphere middleware, so clearly, IBM makes a good deal of money from offering integration solutions.


But let's get real here: This is IBM, and it still sells hardware and appliances. In fact, after my a recent discussion with IBM about the Cast Iron acquisition, I'm positive appliances and packaged solutions will continue to play a key role in IBM's business model.


In the long run, I cynically suggest that solving IT integration will boil down neither to Oracle nor IBM nor any other vendor, but to one question: How much money are you willing to spend?

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Add Comment      Leave a comment on this blog post
May 15, 2010 9:24 AM Aheesh Aheesh  says:


Quite a few players in the data integration area Boomi, pervasive, snaplogic etc...

Would be great if you could share your views on these players.


May 20, 2010 9:10 AM Mike Q. Mike Q.  says:

Isn't "How much money are you willing to spend?"..essentially the question behind most solutions, let alone IT?

Just wonderin'



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