Magicians work their performances with a combination of talent, slight-of-hand and a lot of misdirection. On stage, a well-orchestrated misdirect is enough to pull off the best illusions. In the corporate world, it can sometimes work well, too, as Oracle seems to have discovered with their school-yard baiting of IBM – a move that is distracting some away from Oracle’s missed third-quarter earnings.
To see the misdirect in action, let’s briefly look at the timeline of events:
- Mar. 20: On Oracle’s third-quarter call, the company reports a significant earnings miss, which initially drove the company’s stock down 8% in trading. Executives on the call noted a 2% drop in new software sales and Internet-based software subscriptions in the quarter, a problem they attributed to a rapidly expanding salesforce (i.e., blame it on the new sales folk).
(See also Oracle’s Big Miss: The End Of An Enterprise Era?)
- Mar. 26: Oracle announces a new SPARC T5 line of mid-range servers (along with some mainframe M5 boxes), which starts yet-another line of questioning about the viability of using expensive multi-threaded servers in an age where Intel dominates single-threaded commodity servers and ARM-based servers are on the horizon. It’s a familiar question, since some were asking it when Oracle pushed out its T4 line in 2011. But such questions are soon forgotten, because…
- Still Mar. 26: During the SPARC announcement, Oracle CEO Larry Ellison, well known for his genteel manners and discretion, throws down some smack talk on IBM’s more expensive server line, with the stats to back up their claims, claims such as “[t]he SPARC T5-8 server delivers 1.4 times better performance than the next best single system result, the 32-processor IBM Power 595, at one-fifth the price/performance.” Wait for it… wait…
- Mar. 27: IBM Marketing Manager Steve Sibley chomps at the bait, firing off a response to Business Insider that Oracle’s comparisons are wildly off the mark, since they are comparing brand-new Oracle boxes to IBM setups that are completely different configurations and also three to five years old. Sibley also reminded BI that this isn’t the first time IBM’s had Oracle pull down wild claims in advertising and public statements about the performance of its servers.
(Check out Oracle Has Problems Telling The Truth In Its Advertising)
- Mar. 28: Oracle doesn’t back down, as John Fowler, Oracle’s executive vice president of systems, emails Business Insider: “IBM customers are being wildly over-charged for the performance they’re getting.”
Note, please, that in all of this hullaballoo, no one is talking much about Oracle’s missed earnings, and any conversations about Oracle’s hardware are in the context of comparing them to IBM’s older hardware products – right where Oracle wants those conversations to be.
“A la peanut butter sandwiches!”, as The Amazing Mumford would say.
If this were a one-time thing, it would be merely something of note. But a pattern seems to be forming with Oracle and their product announcements: it’s not enough to just hold up their own hardware and software features, but they habitually have to take pot-shots at anyone else in the space as well. That’s all part of doing business, of course, but Oracle appears to just make things up or cherry pick data to create a scenario that makes them look the best.
Sooner or later, though, such tactics may wear thin on potential customers and even existing customers. If you treat marketing as one big magic trick, how long before people start to wonder if what you have to offer is real, or an illusion?
