The Tenuous Ties that Bind High-Tech Together

It can be maddening for any CIO (or journalist) to try to keep track of the complex web of relationships and partnerships that rule the high-tech industry.

The recent saga of Leo Apotheker is an illustrative case: 20-year veteran of SAP, unceremoniously dumped seven months after getting the SAP CEO spot in 2009, just hired by HP, which also happens to be a critical hardware and services partner of SAP’s.

Executives at SAP- and HP-level megavendors, in particular, are masters at damning with faint praise a rival—while also noting the strength of the partnership between the two vendors, since, invariably, all the enterprise vendors have tentacles that reach into all the other vendors’ product lines.

In this environment, it is the unwise executive who burns bridges on his way out of HQ, multimillion-dollar lawsuits are “nothing personal,” and your enemies’ enemies might just be your best friend.

It’s a bit incestuous, if you ask me. And vexing for vendors’ customers who are inundated with FUD from their vendor reps and unaware of some of the back-channel dealings among vendors.

Oracle is probably the most notable example of this “strange bedfellows” phenomenon. One minute Larry Ellison is trashing, say, IBM, HP, SAP or Salesforce.com; the next, he’s praising the strategic relationships or portfolio of products or whatever of said sworn frenemy.

Of course, the more massive a vendor swells, the greater the degree of difficulty in managing these relationships. Bombastic exec personalities dispensing ill-conceived commentary add to the challenge.

And let’s not overlook the most important element of any of these partnerships: The billions of dollars at stake. That kind of dough can make up for a lot of hurt feelings and lawsuit threats.

As to the newly hired HP CEO, Leo Apotheker, no lawsuits are predicted. But think that first sit down with SAP could be a little awkward? Maybe. Then again, it’s just all part of the game—accepted by all players on the money-laden field.

Someone who knows a lot about this topic is Seth Ravin, CEO of Rimini Street, a third-party provider of maintenance and support for Oracle’s and SAP’s legacy enterprise software products. (Oracle and SAP are not big fans of the services Rimini Street provides.)

Seth’s saga, in brief: Worked at ERP vendor PeopleSoft (now owned by Oracle); left it to cofound TomorrowNow (the predecessor to Rimini Street) in 2002; became a VP at SAP when SAP bought TomorrowNow in 2005; and then left SAP to start Rimini Street. Oracle is still suing SAP over TomorrowNow; and Oracle is also suing Rimini Street, which is countersuing Oracle.

Ravin is stuck in the middle of all of this, usually found with a sly remark at the ready and grin on his face.

“These are extremely complex relationships, and you don’t just have enemies or friends: Everyone is your enemy and your friend at the same time,” Ravin told me, at an offsite interview during Oracle’s OpenWorld 2010 show. “You hear this doublespeak happening every single day. There are no real friends; there are friends of convenience. And everyone’s trying to figure out ways to screw the other guy in the future.”

As to the lawsuits, Ravin says: “People misread litigation. Litigation is a part of the business process. It’s about leverage, positioning.” (See: HP’s announced lawsuit of former CEO Mark Hurd, Ellison’s outraged reaction, and then the “all’s fine here, nothing to see” announcement a couple of days later.)

Ravin adds, to show the oddness: “We’re helping out SAP with the [SAP-TomorrowNow-Oracle] litigation.” That’s the same SAP whose business Rimini Street it trying to undercut.

Compare the high-tech world to, say, Coke vs. Pepsi. They’re not partners in anything. They’re not sharing bottling plant alliances or back-office secrets. They’re not anything but cut-throat competitors.

As consumers, we know what we’re getting when we select a Coke or Pepsi. With Oracle or HP or IBM or SAP, it can be difficult for a CIO to know he’s making the right choice in committing to one vendor’s ecosystem of technology products and service providers.

If vendors truly want to be strategic partners with their customers, then those customers need to have ultimate faith in their vendors. Right now, with so much in flux and so many changing sides so quickly, it’s hard to know who to trust.

Thomas Wailgum covers Enterprise Software, Data Management and Personal Productivity Apps for CIO.com. Follow him on Twitter @twailgum. Follow everything from CIO.com on Twitter @CIOonline. E-mail Thomas at twailgum@cio.com.