by Thomas Wailgum

Oracle’s “We’d Better Do Something” Moment

May 05, 20093 mins
Enterprise Applications

We’ve all had these types of situations happen, right? When we’ve either done something really, really stupid and realized we had to fix it pronto or there would eventually be hell to pay. Or we’ve ignored a small-ish problem and it’s now on the verge of blowing up into something much, much worse.

That’s essentially what happened to Oracle, and why, at its International Oracle User Group’s annual conference, executives announced a small, short-term pricing discount for enterprise software customers sticking with aging versions of Oracle applications.

In essence, the temporary discounts work out to about a 10 percent reduction in fees for some older versions of Oracle’s ERP and CRM apps: a collection of geriatric JDE, E-Business, Siebel, Oracle Database and PeopleSoft software.

A resounding “Gee…um, thanks, I guess,” could be heard from locked-in and frustrated Oracle customers everywhere desperate for help amid a worldwide recession. It’s a kind gesture, I suppose, but that’s really it?!

“We saw what is going on in the market. We are all facing the same pressure as our customers,” Juergen Rottler, EVP for Oracle customer services, told Computerworld. (Oracle gets compassionate. Did visions of Mother Theresa just come into your mind, too?)

Really, Juergen? I wonder how many of your customers’ businesses are sitting on approximately $7 billion in cash and are able to tap into annual revenue streams anything like the outrageous maintenance and support fees that deliver 90 percent profit margins to the bottom line? (Oracle has those two, in case you’re wondering.)

Doesn’t sound like a lot of the companies I know today.

The Oracle temporary price breaks reminded me of these famous (or infamous, rather) reactions of businesses and non-business organizations over the years:

  • Apple’s “that’s life in the technology lane”-inspired rhetoric that eventually led to a cut in the price of the iPhone from $600 to $400, and an “in-store credit” to those early adopters.
  • How Microsoft has dealt with the Vista public relations nightmare.
  • Mark Zuckerberg’s and Facebook’s handling of the “Terms of Service” debacle in 2009.
  • JetBlue’s response to the Valentine’s Day ice-storm debacle in 2007.
  • And last, but not least, President George W. Bush’s and the Federal Emergency Management Agency’s response to Hurricane Katrina in 2005.

The “glass half full” person in me would say that at least Oracle is doing something (especially since SAP had just scaled back the immediate increases on its new maintenance fees).

But the “glass half empty” person sees this as both a half-hearted acknowledgement of the excess in maintenance fees and a half-hearted, condescending attempt to actually help customers through unprecedented times.

As ERP guru and Deal Architect founder Vinnie Mirchandani writes in a blog on the Oracle price cuts, “This is a small bone hoping the maintenance issue will disappear into the background. Good dog—now go back to your corner and keep writing those checks.”

So, IT pros, the question is, are you going to gnaw on your bone quietly or bark back at Oracle?

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