Oracle acquires Sun: what do the analysts say?

As the comments begin to settle down around Oracle’s latest blockbuster acquisition, let’s have a look at who reacted how quickly, and the quality of their comments.

There’s plenty of discussion of the basics: that Oracle is to acquire (“rescue”, according to some coverage) Sun Microsystems. The crown jewels are:

• the Solaris version of Unix, which Larry Ellison talked up and which is perhaps the most important platform for Oracle’s proprietary software portfolio. Relevant past acquisitions here include PeopleSoft/J D Edwards (Dec 2004) and Siebel (Sep 2005), both hard-fought battles
• Java, the basis for Oracle’s growing middleware business. BEA Systems was acquired in January last year.
• Sun hardware … it will be interesting to see what Oracle does with this, as an indicator of the company’s future direction
• Star Office and Open Office – there’s not much comment about these. But Ellison may well encourage them, the better to compete with Microsoft
• MySQL open source database, widely used by start-ups and web companies
• Definitively stopping a link-up of IBM and Sun

When I looked at coverage of the Satyam scandal, the questions were: who reacted first? Who has the most incisive coverage for the enterprise user? Who had the best accessible coverage?

But things have moved on, not least with Gartner’s entry to the blog movement. The major analysts had blog postings up pretty much on the day, and so did a range of other commentators. Some postings are very short and don’t do much more than register that the analyst had seen the news. But some have significant analysis, and I’d commend Darryl Plummer from Gartner, James Kobelius and Ray Wang from Forrester, and Bruce Richardson of AMR who all quickly began to explore the implications. Stefan Ried of Forrester waited a couple of days and then, after a call with Oracle, brought together some of his colleagues’ earlier comments so that’s a useful link.

And at this stage there is not much early stage formal research reporting. There are a couple of reports from the big two (Forrester and Gartner). Forrester haven’t disappointed as they did last time: the quality of accessible coverage in the blogs is high. Gartner’s blog coverage is more random; perhaps this is where Forrester’s approach to blogging, with topic-related rather than personal blogs, pays off. Then there were rapid initial research notes from Forrester and Gartner but not a great deal more.

As with Satyam, there’s no consensus about the future direction of this integration. The main disagreements are:

• will Oracle divest the hardware business, or leverage it? Significantly, the Oracle press resource talks about delivering “an integrated system—applications to disk”, not “applications to CPU”.
• will MySQL be used as a route to migrate more customers for Oracle’s database and then killed off? will it be actively supported? or will it be cut loose for the open source community to work with?

So perhaps the main conclusion for insight service users is that the pace and quality of fast-response comment to major events has significantly picked up. And that there were no real surprises about coverage – except that I discovered a new source (GigaOM) which had an incisive article – matching Forrester’s Kobelius for early considered analysis. That’s a source I’ll be watching in future.

Links:
• Oracle and Sun, Oracle press and information website
• Forrester: Oracle’s Sun Acquisition Is A Game Changer, 22 April, client research targetted at vendor strategy professionals (i.e. the IT supply side) but relevant to users too
• Gartner: Oracle/Sun Deal Will Change Competitive Landscape in IT, 22 April, client research, short but publicly available
• Our Full Analysis of the $7.4B Oracle-Sun Deal, GigaOM, 20 April

To see more of the coverage identified for this survey, click for items tagged in del.icio.us.

Satyam: an analyst case study

So who was first to react to the Satyam scandal? And who had, and continues to have, the most incisive comment for Satyam’s users and other heavily outsourced operations?

I’ve been catching up on commentary from the analysts, and doing a little research. Considering how important outsourcing is, from global enterprises down, it’s disappointing. There’s really limited coverage. You might find these notes interesting not just for themselves but for what they tell us about the speed with which the analyst community reacts.

Remember the timescale: the Satyam chairman’s resignation took place on 7th January. Who reacted first, and whose insights are the most actionable? I’m not looking at news coverage, but at advice and interpretation offered to enterprise users of insight services. Satyam’s customers include many of the largest global companies. What can this tell us about the insight services you rely on? And importantly, what’s available even if you’re not a client?

So here are the key analyst reactions and the timescales. I used Malcolm Ramsay’s specialist search engine at AllTheAnalysts to see what was out there.

First to react: AMR Research
First coverage: Satyam’s Woes Put India’s Services Industry in the Hot Seat, 7th Jan (client access)
Accessible coverage: First Thing Monday podcast, 9th Jan
Follow-up: Beware of the Satyam Ambulance-Chasers, 15 Jan (client access)
Focus: the future of Satyam. AMR expect Satyam to be acquired within 1-2 months for the sake of their client base.
Client advice (from the podcast): having to switch providers is very expensive for a client. It’s the people that matter; look for continuity. Don’t panic; the people will stay put in the current climate.

Best accessible coverage: Gartner
First coverage: Prepare for Aftereffects of Satyam Accounting Scandal, 2 page document, 8 Jan. Although a client research note, this document is available free through gartner.com. But you need an external search to find it
Accessible coverage: online documents and Gartner Voice podcast 12th Jan. But oddly, no blog coverage visible.
Follow-up: two subsequent short documents (accessible). One longer client-only document dated 9 Jan. Local event in Mumbai upcoming on 10 February
Focus: the broad implications for the global IT services industry. Gartner expect Satyam to cease to exist in its current form by “some time in 2010” for this and other reasons. It will be crippled from development, so that its expertise will decline. It will be starting from scratch to rebuild client trust. But Satyam has Indian Government support offering some confidence for clients.
Client advice: look more deeply than just financial stability when selecting an outsourcing vendor

Disappointing: Forrester Research
First coverage: Satyam’s Fraud Leaves Clients In The Lurch, 8 Jan (client access)
Accessible coverage: none located, no coverage in the Forrester blogs
Follow-up: teleconference, 20 Jan (client access, available from archive)
Client advice: can’t be inferred from what’s visible

Others: Ovum
First coverage: The ‘mithyam’ (deception) behind Satyam, 19 Jan 2009
Accessible coverage: none found
Focus: the reputation of India’s IT industry (based on provider’s abstract)
Client advice: can’t be inferred from what’s visible

IDC
Coverage: The Satyam Saga: What Next for the Company, Its Customers, and “Outsourcing India? No specific date (just January); client access, 6 pages
Client advice: can’t be inferred from what’s visible

Celent of India published a report on Indian IT services firms on 29 January which appears to make no mention of Satyam’s troubles. No other services show coverage of the crisis to date.

Client conclusion

Forrester’s web conference, particularly, will be of value to clients and can be replayed; but lack of coverage in the blogs is disappointing. The Sourcing and Vendor Management blog has no entry since October.

AMR Research show up well in this, specialists that they are, and Gartner exhibit their strength in fast considered reaction. There are clear differences in the interpretation and advice they are giving, particularly in the timescale for Satyam to disappear in its current form and in the likelihood of staff attrition. Both offer some clear guidance: AMR is more sanguine of an acceptable short to medium term outcome, at least for Satyam customers.

And the learnings? In a sudden crisis like this one, where your exposure could be significant, find all the advice you can. Find your way to the openly accessible content. Look at the specialist insight services, and always at Gartner, even if you’re not a client. Weigh the opinions: they may vary widely. And in the end, make your own decision – not theirs!

Links:
• Prepare for Aftereffects of Satyam Accounting Scandal, Gartner, 8 Jan 2009
• Life after the Satyam scandal, Gartner Voice, 9 Jan 2009
• Satyam’s Woes, AMR Research, via First Thing Monday (click More and locate the title)
• AllTheAnalysts

InformationSpan Report series launched

InformationSpan has begun to create a series of survey reports which will look at Insight Services coverage of specific IT topic areas.

The first Report surveys insight services for Business Intelligence. Recent significant consolidation in the BI marketplace makes authoritative advice essential in this area: reports prior to mid 2007 are likely to be very dated. We review providers with known coverage in this area, from the InformationSpan database of over 400 providers, using our industry structure model for classification: global generalists; global specialists; local generalists; and niche providers.

You can view this first report for free: go to the website and click on the new tab labelled “InformationSpan Reports”. Even if BI isn’t your primary area, you might like to see the approach. Comments will be welcome here, particularly if you think I’ve missed something!

I’m planning one report a month from now on; current planned coverage includes the Emerging Technology agenda; Risk Management; and Merger & Acquisition Support. If you would like to influence this agenda, or commission a special report, do get in touch!

Once again, no other Links in this posting.

Providers: how accessible is your meta-information?

I’ve been doing research to update an InformationSpan coverage report on Business Intelligence. I’m struck by the different approaches of providers that help, or hinder, this task.

Remember – I’m not trying to read the content necessarily (though some elements of it are useful). I’m coming at it from the perspective of an enterprise trying to find the best insight services provider for their needs. So I’m trying to find out the depth of their coverage, how important the topic is for them, and how up to date they are. What I really want is meta-information: information about information.

To show what I mean, here are a handful of case studies.

Analyst firm A – a well known global specialist – offers me a guest account. Even without this, I can explore in reasonable depth just using the search box on the home page and the About section of the website. Then, when I sign in, I can see the whole structure of their website as a paying client would see it. I can browse the analyst biographies, undertake searches, and in fact do pretty much anything a client would do except read the premium content research. So I have a pretty good idea how many analysts cover this area, which of them I’ve heard of or encountered, and from the abstracts of the published reports I can see at least some of the companies covered in their writing. I think I can make a pretty good assessment of their coverage, based on what I’ve seen.

Company B has a similar model, and their guest login provides a lot of offers of complimentary access to the full text of quite recent reports – cleverly, using a Flash Player presentation which means there’s no downloadable version but you can see the whole thing. Even better!

Analyst firm C – a global generalist – has a great deal of good content. In fact, BI is one of their primary coverage areas. But if I didn’t know, I might well not realise it. I can see a fully featured non-client home page. But there’s no search box on it, so it’s rather difficult to assess what they’ve got. It turns out that the best route into the information I need is to browse the Analysts section, because their people are indexed by coverage area; or to go through Events. There are links there to reports, but only the barest abstract is visible as a non-client. I did find a key report via a vendor’s website (though I had to use Google to find it) and in the end, from prior knowledge and reasonably successful online research, again I have a fair idea of their coverage. But it was a lot harder work!

Provider D may or may not have content. But since the only information I can find from their web pages, as a non-member, is about the structure of their service and the highest level information about content, and there’s no search function without a login, I simply don’t know!

So if I’m an enterprise trying to find specific coverage, across the marketplace of four hundred or so general and specialist providers, guess which providers simply aren’t going to figure? They can’t be assessed, and they won’t make the cut.

Providers – please, at least, provide a search box so that we can see what you do!

PS – you can see the report via the InformationSpan website. Click the new tab section for Reports. No other links on this posting!