By Charles King, Pund-IT, Inc. June 14, 2017
The tech industry has long promoted the concept and value of “co-opetition” – a process in which even viciously competing vendors can, in some areas, willingly cooperate in mutually beneficial ways. There are countless examples where the co-opetition dynamic works as advertised, some of them going back for decades.
For example, system vendors that develop their own networking switches, including Dell, HP and IBM also sell Brocade, Cisco and/or Juniper solutions. Similarly, though most major server vendors have their own in-house storage systems, they also support offerings from storage specialists, including EMC, HDS, NetApp and many others.
That doesn’t mean that co-opetition partners don’t occasionally get on the wrong side of one another. For example, Cisco’s decision to launch its own Unified Computing System (UCS) servers in 2009 rubbed many of its system vendor partners the wrong way. Then again, Cisco got some of its own back when strategic partner (and then-fellow VCE co-owner) VMware bought Nicera in 2012 to get a leg up in software-defined networking.
When good partnerships go bad
But sometimes these disagreements can become poisonous, especially when one partner oversteps the bounds of wise judgement. Many consider Oracle to be a poster child for this kind of misbehavior, taking positions that spark wrangling with partners that occasionally end up in litigation. For example, the company famously claimed in 2011 that HP (now HPE) was on the cusp of halting its use of Intel’s Itanium processors.
Some analysts suggested that Oracle’s real aim was to migrate HP clients to its own systems acquired in the 2009 purchase of Sun Microsystems. In any case, Oracle declared it would stop developing its database products for HP’s Itanium servers. HP cried foul and, after Oracle refused to relent, sued and won an initial ruling forcing Oracle to continue Itanium system support. Then in 2016, a follow-up trial ordered Oracle to pay HP $3B in damages (a judgement that Oracle is appealing).
Competitive issues have colored and injured other Oracle relationships, as well, including its partnership with IBM. The pair have worked closely for decades with the latter’s mainframe and Power Systems supporting the latter’s database solutions for thousands of enterprise customers. The results have steadily progressed despite the fact that IBM develops and delivers its own enterprise-grade DB2 database offerings.
Just the fake news, ma’am…
However, in 2012-13, Oracle ran a series of high profile ads claiming that its SPARC T5-based servers were faster, cheaper and better than IBM’s Power 7+ systems. Problem was that the only way Oracle could reach those favorable conclusions was to compare its new servers with IBM solutions and benchmarking data that were years out of date.
IBM complained to the watchdog National Advertising Division (NAD), which ruled against three of Oracle’s ads and fined the company. After Oracle ran a fourth bogus campaign that featured the same “stark, overbroad IBM-versus-Oracle comparison that NAD recommended against in the three previous cases,” NAD asked the FTC to investigate Oracle for “possible law enforcement action.”
While it’s one thing for a company to pursue areas necessary for its competitive survival, lying about its strategic partners’ products goes well beyond the pale. The kindest interpretation of Oracle’s actions would be to call the company a “fake news” pioneer. If there’s a clearer example of one company attempting to sow baseless fear, uncertainty and doubt (FUD) about another, it’s difficult to identify.
But rather than stewing about the problem or waiting for somnambulant bureaucrats to act, IBM instead decided to achieve with innovative tools what Oracle was attempting with FUD: to deliver fully reliable, attractively priced DB2 alternatives to Oracle’s costly database products. Over the past few months, IBM has put that strategy to work with eye-opening, even stunning success.
DB migration challenges and innovations
Before getting into IBM’s new DB2 Direct solutions and services, why are enterprise database migrations so painful in the first place? Complexity and business criticality are the two biggest issues that come to mind.
In the former case, choosing a database platform is one of the more important IT decisions that companies make, and has ramifications that extend across the organization for years. As a business grows and evolves, its databases tend to expand in-kind to the point that they intersect with, influence and, hopefully, enhance virtually every part of the organization.
That’s especially apparent in the tens of thousands of enterprises that utilize online transaction processes (OLTP) to support business critical applications. So it’s no surprise that the notion of disturbing, let alone replacing existing database platforms is anathema for most companies. As a result, databases have become what are essentially “Roach Motels” for many enterprises, where customers check in but they don’t check out.
To avoid potentially painful disruptions, customers maintain often costly existing databases and relationships with their vendors. Not everyone or every vendor is happy with this situation. A wide variety of alternative proprietary and open source databases have arisen over the past decade. Few have been able to loosen Oracle’s hold on traditional database customers and markets, but IBM’s new DB2 Direct offerings seem likely to shift the balance.
IBM’s DB2 Direct
Why so? Due to the technical innovations underlying IBM’s migration offerings and its remarkably aggressive new pricing model.
In the first case, DB2 supports native and new PL/SQL compatibility features that make migrating easier than ever before. Those include advanced support for triggers, new scalar features and declared types and procedures within a local scope. Add in the 98%+ compatibility between DB2 and Oracle customers’ application code, and migrating is simpler and less disruptive than ever before.
IBM’s pricing for DB2 Direct is equally or even more innovative, relying on what the company terms Virtual Processor Cores (VPC) as units of measurement for DB2 licensing. VPCs are hardware-agnostic, meaning they aren’t tied to any specific chip architectures or server platforms. Additionally, they can be used in on-premises systems, via cloud services or in hybrid cloud models.
That’s a significant departure from previous DB2 migration solutions that emphasized IBM’s POWER-based servers. The company will still happily sell DB2 Direct on Power Systems, and claims customers will enjoy a 30% performance advantage over Intel-based hardware, but it’s no longer a requirement.
Standardized pricing on VPC makes DB2 Direct far easier to parse and manage than Oracle’s complex pricing models that combine expensive software licenses with annual, steadily escalating support fees. In stark contrast, IBM charges a flat fee that includes the software license, plus subscription and support costs that together are a small fraction of Oracle’s software license alone.
However, that already low IBM fee drops by nearly 80% in the following year, and grows at a far smaller and slower rate than Oracle’s. The result of IBM’s approach for customers is a radical reimagining of database CAPEX and OPEX that results in phenomenally inexpensive enterprise-grade solutions. IBM notes that in many cases its DB2 Direct offerings cost 90%+ less than what Oracle charges for comparable database license, subscription and support.
That’s right – 90%+ less.
These savings and innovations are not being ignored by former Oracle customers who have successfully migrated to DB2. They include high profile companies, such as:
- Audi migrated over SAP systems from Oracle database to IBM Power Systems and AIX with IBM DB2. The company is enjoying 50-70% lower storage costs, much higher application performance and 50-70% reductions in system energy consumption.
- Coca Cola achieved a 20% reduction in database size and 40% lower storage requirements after the migration from Oracle. The company also captured a 60% improvement in supply chain process runtimes and reduced transaction completion time by 30 to 60%.
- Honda Motorcycle and Scooter India used its migration to support SAP ERP with IBM DB2 and hardware, improving application performance by 40%+ and increasing database compression and performance by 50%+. It also decreased database administrators’ workloads by 25%.
Co-opetition has a respected place in the IT industry and other sectors, and confers notable benefits for both the involved companies and their common customers. Strategic partnerships don’t and shouldn’t prevent vendors from pursuing innovation on their own. However, it also shouldn’t be surprising when unseemly behavior sparks eventual, often unexpected challenges for bad actors.
You can’t draw a straight line between IBM’s new DB2 Direct offerings and the unrelenting, unsubstantiated FUD the company endured from its close strategic partner, Oracle. IBM database migration solutions and services existed for years before the launch of DB2 Direct. However, the new PL/SQL compatibility features and Virtual Processor Core-based licensing make DB2 Direct easier and more attractive than earlier versions.
More importantly, IBM’s pricing model for DB2 Direct simply blows the doors off Oracle’s solutions and most every other enterprise-grade database platform. IBM’s DB2 Direct is also a superb example of the fact that innovation can touch far more areas than technology alone and deliver far deeper benefits. IBM’s DB2 migration customers certainly understand that point, and it is a lesson that Oracle is likely to learn repeatedly in the months ahead.
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