In HP-Oracle Itanium Feud, Customers' Voices Ring Loudest


Hewlett Packard is rallying its partners to convince Oracle to change its mind on the Itanium issue, but customers are the only parties that have any chance of swaying Oracle's opinion on the matter.

That's according to solution providers who've been working to calm clients who've invested in HP's Itanium-based Integrity, NonStop, and OpenVMS servers and are running Oracle applications on them.

"In my customer base, it's not 'Oracle is the bad guy' or 'HP is the bad guy', it's more like, 'We bought a solution from you two and we're holding you both responsible,'" said Fred Traversi, CEO of AdvizeX Technologies, an Independence, Ohio-based solution provider that partners with both companies. "Our belief is that customers talking to Oracle will have a more significant impact on their strategy than any reseller would have."

In the weeks since Oracle decided to stop developing software for Intel's Itanium processor, AdvizeX has reached out to its base of around 270 customers that are running Oracle software on HP Integrity servers. Traversi says customers who've built significant customization on top of their Oracle application base stand to lose the most, so their voices are likely to be the loudest.

"These folks are going to spend millions of dollars to migrate apps," Traversi said. "In planning, that's a year or more of their budget cycle, depending on the degree of application customization and integration to other systems. They just don’t want to do that."

HP is in the midst of a spirited social media campaign to pressure Oracle, and partners are playing a central role. HP executives have been marshaling public opinion on the company's #HPCustomersFirst Twitter feed, which launched in the wake of last month's Americas Partner Conference. HP this week also announced that Connect, a 52,000-strong community of HP users, is on board with the effort.

Frank Rauch, vice president of channel sales for HP's Enterprise Storage Server Networking (ESSN) group, reiterated the message that Oracle's Itanium decision is bad for customers earlier this week at Ingram Micro's VentureTech Network conference in Chicago. "My advice to you is, if you feel the same way as I do about your customers and your investment, write Oracle and tell them how you feel. We need to get them to reverse the decision," Rauch said at the event.

HP's leveraging of partner angst is unique -- and possibly, a blueprint for how these sorts of hot button issues will be hashed out between companies in the future. "HP is trying to build a groundswell of opinion, and it seems to be a reasonable tactic to see if the market can rally with a loud voice to get Oracle be more fair and open," said Steve Tepedino, president of Melillo Consulting, a Somerset, N.J.-based solution providers.

However, many HP partners believe that Oracle CEO Larry Ellison would rather show up at the next America's Cup in a rowboat than bend to the will of HP.

"I would love to think the HP partner community could wield enough influence to change an Oracle decision. However, judging from Oracle's actions in the past, I’m not sure that anyone could change Ellison's mind on this matter," said one HP partner, who spoke on condition of anonymity.

The fact of the matter is that customers are tired of the bickering and acrimony between HP and Oracle and want it to stop. "A lot of our customers are concerned but in the long term aren’t sure what to do. They don't want to take Oracle on by themselves," said Tepedino. "They're saying please don't make me choose between database and OS -- we want you guys to get along."

"We all live together in an ecosystem that works by us creating opportunities and solutions for customers. We make both HP and Oracle win," said Bill Loupakos, senior vice president of professional Services at American Digital Corporation, another large HP-Oracle partner.

Solution providers that partner with both companies generally see Oracle as the aggressor in this case, but they're not as vocal about it as HP has been. This isn't surprising since these VARs must walk a fine line so as not to upset either vendor. Several partners interviewed by CRN would only talk in vague terms about what they're doing to get Oracle to reverse course on Itanium.

"We have already escalated this with Oracle and will actively pursue a reversal of this decision," said one HP global enterprise partner executive, who declined to elaborate because the talks with Oracle are under NDA.

"We've had a couple of opportunities to talk with Oracle. We're having a tough time," acknowledged another solution provider executive that partners with both HP and Oracle. "We haven't received any direct communication from Oracle -- it has all been in the media. Usually with these sorts of decisions there is some sort of mass e-mail or product notice. This was a substantial decision and we thought there would be better communication."

John Vigliecca, COO at Dasher Technologies, an HP partner in San Jose, Calif., says his government and public sector customers have been especially vocal in their conversations with Oracle. "We're not forcing our customers to send notes to Oracle, but have encouraged them to do so," he said. "At a time when these agencies have decreased funding, none are looking forward to potentially having to spend more on new equipment."

Michael Haley, president of Edge Solutions, a $17 million HP Oracle Solution Elite Partner in Alpharetta, Ga., says his company hasn't contacted Oracle about the matter and hasn't been asked to do so by HP. He also believes customers are better equipped to send the message that HP is asking partners to send.

"It's the clients that are running Oracle apps in an Itanium environment that should be reaching out to Oracle," Haley said. "They're the ones that are going to be most heavily affected."

The Itanium issue isn't forcing partners to confront difficult spending decisions with customers just yet, but VARs told CRN that the issue could start playing into cycle based decisions in the next six to 12 months. HP and Oracle partners are hoping the situation gets resolved so that they can get back to the business of serving their customers, as opposed to feeling, in some cases, like pawns in a chess game between IT giants.

Scott Campbell contributed to this article.