Sony cries foul over Oracle buying spree

Individual vendor support and R&D falling behind

Oracle's incessant acquisition play of the past few years has had a negative impact on the enterprise software industry according to one high-profile customer, Sony Pictures Home Entertainment (Sony) US.

With software previously purchased from at least four separate vendors acquired by Oracle, Sony is now firmly an Oracle customer as a result of market dynamics more than choice.

Sony's vice president and CIO, David Cortese, made no secret of his dislike of the enterprise application consolidation trend that has continued into 2007.

"I've had the luxury, maybe not so much the luxury, of having an application portfolio that has PeopleSoft, JD Edwards, Demantra, and Hyperion," Cortese said.

With all those vendors now under the Oracle umbrella, Cortese said: "The good thing is I only have to write one cheque instead of four. The bad news is it's Oracle."

In Sydney for the Teradata Universe 2007 conference, Cortese also expressed concern over the wider industry implications resulting from rampant consolidation.

"I'm very concerned about the consolidation on some of these applications from Oracle," he said. "My observation has been that the creativity and growth around the product set tends to be a bit more stagnant and working with them gets more bureaucratic and [there is] more red tape behind that over time."

"In fact, I could fairly confidently, and frankly, say that the customer service component to working with those software vendors since the Oracle acquisition - each one of them on their own - has not helped. They have gotten worse [and] the service has gotten worse."

Cortese said as the products have become "somewhat stagnant" it is a real concern for him because Sony has a heavy portfolio that is moving towards "a more monopoly type of application portfolio perspective" when Oracle is doing this much buying.

When asked whether Oracle is making more money out of him, Cortese replied "not me".

"My feeling is the Hyperion deal will go through. It's a really scary thing," he said.

Competition is also another casualty of consolidation, particularly when the acquisition deals drag on over a long time.

"In particular, we're a big JD Edwards shop and when they go into acquisition mode and that drags on six, to 12, to 18 months, people stop buying," Cortese said. "The development costs and R&D start to go down, the products become stagnant, and they don't get the influx and the input and they lose momentum in the marketplace."

"[This] is why, at least in the States, I would say that SAP has just given them [Oracle] a beating because when people are figuring out what to buy and one goes into an acquisition routine and you don't know what the outcome of that is going to be and where that product is going to end up, it becomes a concern."

Cortese is even left wondering about the future of Teradata as a potential acquisition.

"It's a bit concerning to me with Teradata now off on its own, separate from NCR, it is a bigger target than it once was," he said.

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