Sun Microsystems customers are about to experience “the highest level of customer service” in the industry under Oracle’s ownership, thanks to its superior support technology and track record of execution, an Oracle executive claimed Wednesday.
Over time, Oracle will be able to sell customers systems that are engineered, tested, packaged, certified, deployed, managed, patched and supported in a unified manner, according to the company. “The ability to truly drive across the stack is going to enable us to achieve our mission, which is to make customers more successful,” said Juergen Rottler, Oracle’s executive vice president of customer services, during an event about the Sun acquisition that the company held at its headquarters.
The company boasts profit margins of about 90 percent on software maintenance fees, which have been crucial in times of flagging license sales. Software license updates and product support accounted for 56 percent of Oracle’s revenue, or US$3.25 billion, for the quarter ended Nov. 30.
The vendor guards that revenue source fiercely. This week, it sued Rimini Street, a company that provides third-party support for Oracle and SAP applications, claiming intellectual property theft. That move followed a similar lawsuit Oracle filed against SAP in 2007.
Rottler made no mention of the legal actions Wednesday.
Nor did he discuss the problems Oracle faced last year when it migrated users over to My Oracle Support, its next-generation customer service portal.
Although MOS is supposed to provide customers with advanced features, many users initially reported severe performance problems, with particular scorn aimed at the portal’s Flash-driven user interface.
Meanwhile, many users of Sun’s open-source software have been self-supporting or contracted with third-party providers, instead of buying an enterprise subscription from Sun itself. Oracle wants those users to come home, Rottler said.
It’s not clear what such a reunion would cost. Oracle plans to offer Sun customers “simplified and standardized” support pricing, although it did not offer specifics Wednesday.
The move is necessary to reduce confusion caused by Sun’s multi-tier support menu, which is too “complicated,” according to Rottler.
“Five years ago we decided that one support level, the best in the industry, was the right answer for the customer … you should expect something very similar for the Sun customer base,” Rottler said.
In the meantime, Sun’s support systems will be integrated with My Oracle Support “in a matter of weeks,” Rottler said.
The longer-term road map will see a convergence of the support portals with system management software from Oracle and Sun, he said.
One industry observer expressed mixed sentiments.
“It’s probably a fair statement that [Oracle has] done a pretty good job of standardizing and rolling out their support program for their acquisitions,” said Frank Scavo, managing partner of the IT consulting firm Strativa and author of the Enterprise System Spectator blog.
At the same time, Oracle has also been effective at leveraging economies of scale and thereby reducing the cost of running support, boosting its profits, Scavo added.
“Why aren’t some of those cost savings passed on to the customer?” he said. “Why do they have to accrue to shareholders? Especially since the money to make those acquisitions has largely come out of the maintenance fees existing Oracle customers are paying?”
Moving forward, customers need to protect themselves by insisting on contractual rights to use third-party maintenance companies, particularly in light of the continuing industry consolidation the Sun-Oracle deal represents, said Ray Wang, partner with analyst firm Altimeter Group.
However, while Oracle’s vision of integrated systems could indeed produce “tremendous amounts of efficiencies” for IT shops, the broader the integration, the more difficult it could be for a third party to support them, he added.