Oracle acknowledges complaints over ‘de-support’

Oracle Corp. acknowledged Friday that it has received the latest volley in a war of words and deeds that is heating up between the database and applications vendor and a large segment of its customer base.

In this latest skirmish, Oracle is planning to discontinue support for all Version 10.7 applications at a pace that is far too fast for many of its largest customers.

In response, a group of those customers, members of the Oracle Applications User Group (OAUG), sent a signed petition to Oracle asking that the company relent and continue support through December 2004. The original discontinuation was set for June 2002.

After several inquiries, Oracle spokeswoman Stephanie Hess said Friday that: “Oracle received the petition and Oracle executives will contact the OAUG board when a decision is made.”

Among the petition signers were representatives from more than 50 global companies, including AFFCO New Zealand, Bell & Howell, BorgWarner, British Alcan Aluminum, Cummins, ESPN, Goodyear Dunlop Tires North America, Greyhound, Nike, Nortel, Sony, and Wells Fargo.

Oracle did give a little, adding an additional six months of support, which will now end in December 2002.

In making its pleas to Oracle, the petitioners pointed out that “versions of Oracle Applications prior to 10.7 were not Y2K-compliant,” forcing companies to upgrade to 10.7, and that those companies are only now able to see a return on investment and to reduce their cost of doing business as the 10.7 applications become stable.

“The 10.7 applications have been out in [a] GUI – rather than character-based form – for three years and stable for a couple of years,” said John Holdeman, one of the petition signers and the plant IT manager at Borg Warner Cooling Systems in Fletcher, N.C.

Typically, when vendors support their software as problems arise, such as a bug, the vendor’s technical support services will write a patch to fix the problem.

“There’s an implementation cycle: You load, test, [and] apply the patch, which may or may not work. Going without support means no way on earth is the program going to get stable,” Holdeman said.

For a company to diagnose and fix a problem or to create its own workaround can be extremely expensive. The going rate for programmers is US$100 to $250 an hour, bringing the cost as high as $50,000 per project, according to Holdeman.

De-support of 10.7 will increase expenses on a number of other fronts, according to others in the industry.

“De-supporting 10.7 will put a big burden on applications managers who are already running on overload, working with more and more databases with fewer resources. It will be expensive in the cost of resources,” said Ari Kaplan, CEO of PocketDBA Systems, a wireless database management company in Chicago. Kaplan is also a former Oracle employee who oversaw the installation at some of that company’s biggest customer sites.

Oracle appears willing to risk customer grumbling in order to improve its own numbers, according to an analyst at Boston-based AMR Research.

“Oracle is having some tough quarters, and they want to see people migrate. The companies that are delivering results are those that can mine their customer base,” said Louis Columbus, a senior analyst at AMR’s office in Irvine, Calif.

“This is definitely a honey and vinegar strategy with Oracle, most likely promising a sweet deal on 11i if companies migrate now,” Columbus said.

Finally, AMR’s Columbus believes under the right set of circumstances, despite migration costs, some companies may consider going over to an Oracle competitor.

“When you have someone as smart and sharp as John Chen, CEO at Sybase, who in a lot of people’s opinion is turning things around at Sybase, something like this gives them an opportunity to compete. Chen will have a field day with this,” Columbus said.

Will companies like BorgWarner and others walk away from Oracle?

“We were talking about this very subject this week and finally voted not to,” Holdeman said.

But Holdeman agreed that the mere fact that the discussion was held is significant.

The other alternative is to switch to 11i.

“Many of the companies want 11i to be tested and improved before they upgrade,” said Kevin Denver Banks, at the OAUG.

But Holdeman says just two and a half years out of 10.7 is unacceptable for many companies.

“They are getting stuck with another upgrade. Product lifecycles ought to be longer than three years,” Holdeman said.

Prior to the latest incident, Oracle and the OAUG were at loggerheads over the decision by Oracle not to send technical support teams to the OAUG user conferences.