Anti-Trust and Suite-Sized Software: Page 2

Oracle's attempted takeover of PeopleSoft seems to be foundering on the shores of anti-trust law. Enterprise Advisor columnist Josh Greenbaum argues that U.S. and European market regulators are dead wrong.
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Reason two is that these companies compete against, and beat, SAP, Oracle, and PeopleSoft regularly, and, at times, spectacularly. Granted, one could argue, as I have, that some of my other suite vendors would have trouble servicing a $100 million global deal in every country and language supported by their products. But service trouble is something that no vendor could ever have a monopoly on. The fact is, a merged Oracle/PeopleSoft would still be able to lose deals, and would still be subject to genuine competition in the marketplace.

But reason three is the real kicker. Turns out that, despite all the marketing hype around software suites, almost no one is buying a full suite today. Take a look at the average deal size for all the vendors named in this column. Not a one can claim an average deal size north of $1 million, which means that the average deal by definition falls well short of being "suite-sized." It's been a fact of life for more than three years that suite-sized deals are an artifact of a more naive and cash-rich yesterday, when mega-deals were the norm and shelfware the inevitable result. Now every CIO worth his or her salt is an expert at buying only what's needed at the moment and only what can be implemented without starting with a clean slate and a $100 million price tag.

So, credit Larry Ellison with making his life a little more complicated by espousing a marketing message that has tried for years to convince buyers to throw out their moribund IT environments and standardize on the Oracle suite. It was a good idea out of touch with market reality, and had been relegated to the ash-heap of marketing rhetoric by any serious observers of the enterprise software market. The fact that DoJ and the EU are taking this hype seriously shows how much they have to learn about enterprise software. Hopefully they understand the rest of their purviews a little better.

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