January 21, 2006

Oracle's Accuracy Woes

By Evan Schuman, Ziff Davis Internet

Opinion: Within 30 days, Oracle has publicly made what appear to be at least three provably inaccurate statements about its retail business. Is it careless or orchestrated?

Catching misleading statements and half-truths in vendor news releases takes me back to my old days of covering New Jersey politics.

It was never news to say that a particular New Jersey politician was a crook. The news was when they slipped up enough to let you prove it.

As any IT manager knows, news releases are self-serving documents whose entire raison d'être is to present a one-sided argument why the issuing vendor is a great place to give lots of money. Half-truths and misleading comments are not only popular in news releases, they're damn near mandatory.

Some years back, I remember a DEC manager who told reporters that a particular new OS hook they had created already had "a number of ISVs committed to using it." When nothing turned up and the feature was abandoned, the manager conceded that no one had ever opted to support it. Asked about his news conference claim, the manager sheepishly smiled and said, "Zero's a number."

Indeed, it is. And in a bitter fight for the retail technology dollar, Oracle and SAP have thrown lots of charges back and forth.

But Oracle in the last 30 days has made a crucial (and most likely careless) error that has done in so many politicians: they said things that were provably false. That's just bad form. At least when SAP and IBM deceive, they have the decency to make it so convoluted that no one's going to be bothered to run it down.

Given that lying requires a conscious belief that one is uttering something false with the intent to deceive, Apple gets a pass because their top brass actually believe most of what they say.

But Oracle just got sloppy. Last month, it was research giant Gartner that said Oracle misrepresented data in an Oracle ad about how many customers were using current versions of Oracle and SAP apps.

Then Oracle announced on Dec. 15 that it had taken the retail business of SAP German partner Karstadt away, only to have Karstadt spokesmen deny it a few days later.

Although Oracle won't comment, the deal being referenced was apparently that of a former Karstadt unit that it had sold and, according to SAP, even that unit is only in discussions with Oracle.

The third strike came this week when another research firm—Stratascope—went to the trouble of paying for a news release to declare that Oracle—a major paying client—had "mischaracterized, misrepresented and referenced without permission" statistics from Stratascope.

It takes a lot to anger a company so much that it issues that kind of a release criticizing a large customer, but Oracle has a knack of bringing that out in people.

What happened with Stratascope was that Oracle grabbed a bunch of data from its files—which it was completely permitted to do, as a paying client—but then Oracle crunched the numbers, concluded its application outperformed others by 49.7 percent and put out a news release that Stratascope had come to that conclusion in a "research study."

Stratascope had never conducted any such study and has no idea if such conclusions are fair or accurate until it does, said Stratascope CEO Bruce Brien. Oh, just to rub a little salt in Oracle's wound, the statement Stratascope issued pointed out a spelling error in Oracle's release. (At least my editors have the decency to tell that stuff to me privately. And, yes, I never thought I'd use the words "editors" and "decency" in the same sentence, either.)

The Stratascope statement added: "We have no knowledge of the validity of the criteria and methodology [Oracle] used, particularly because several of their claims are based on a set of data that we do not possess."

Within a day, Oracle reissued the original news release, making the requested changes.

Stratascope's Brien said the essence of the Oracle news release—that Oracle substantially outperforms its rivals—may be absolutely accurate, for all he knows.

He wasn't saying that Oracle's conclusions are wrong, but merely that they were Oracle conclusions—based on whatever methods Oracle felt like using—and they weren't the result of the methodical analysis that his company does. It should be noted that Stratascope also works for SAP.

"I am absolutely not saying that [Oracle] is wrong," he said. "It was a simple mistake on their part [about attribution]. They probably crafted the release too quickly."

Asked how his customer felt about the release, Brien said "there were some people over there [at Oracle] who are a little upset."

But he said that—like Gartner in December—his company's reputation was too crucial to let Oracle's statements go by unaddressed.

"The most important asset our small company has is our name. It's something that we do take very seriously," he said. "I have very stringent procedures in place for quality assurance and so forth."

Oracle officially would not comment on their news release run of bad luck, other than to issue a short statement from Oracle Corporate Communications VP Bob Wynne: "While our competition seems very focused on what Oracle is doing, we are focusing our efforts on meeting our customers' needs today and into the future. In the end, we think that's what customers want."

Actually, I think most of their customers would like a wee bit more of an explanation of these errors so they can figure out what to believe.

Fortunately for us columnists, SAP executives were only too happy to oblige with some choice words.

"Good competition is good for customers," said Bill Wohl, SAP's VP and head of their product technology group communications business. In this instance, though, "one of the competitors really isn't playing fairly and that isn't good for customers. What customers are looking for today is a trusted partner."

Wohl then added that Oracle is "not being straight with the market about facts. Oracle has a habit of never letting the facts get in the way of a good story."

But SAP's Wohl then set a new goal for Oracle and this is where things get dicey. "What customers want is straight talk" and not a vendor "that isn't always telling the complete story in the marketplace."

Oracle's mistakes are sloppy and—let's be candid here—are certainly intended to persuade, if not outright deceive. But is it a reasonable standard to only work with vendors that always tell the complete story? Can SAP live up to that standard? Sun? Dell? CA?

IT managers undoubtedly know how few news releases are issued today that do not selectively present half-truths, with the intent to trick the public into thinking something that's not true. And many companies do not hesitate to outright lie.

But companies of Oracle's size demand more attention and their errors are not as easily ignored.

SAP levels additional charges at Oracle, suggesting that their reported financial numbers are misleading because they are not putting the revenues of their purchased companies (especially Retek, PeopleSoft and JD Edwards) into the proper context.

If they did so, Wohl argues, it would show that SAP is winning the market-share battle in retail much more so than Oracle admits.

SAP is indeed winning the initial battle, but it's quite unclear if IT managers will be persuaded one way or the other with these errors. That's the benefit of years of IT cynicism: CIOs haven't believed anything a vendor's said in more than 20 years.