Middleware domino theory

No matter how the struggle between oracle and PeopleSoft turns out, the larger strategy driving Oracle will remain unchanged. It is a battle over middleware and infrastructure — and the real target Oracle has in its sights is not PeopleSoft but the company that is by all accounts the world’s largest middleware vendor: IBM.

I alluded to this clash of the titans over middleware platforms in August. The entire struggle reminds me of the Cold War, in which the United States and the Soviet Union fought over control of countries each considered strategic to its long-term survival. Many of the battles played out along similar lines. The U.S.S.R. would try to take over a country, and the United States would counter with millions of dollars in aid and military support.

Fast forward. We have Oracle on one side, IBM on the other, and PeopleSoft in the middle. Lo and behold, who just signed a $1 billion partnership deal with PeopleSoft in September? None other than Big Blue. Well, that sounds a lot like foreign aid to me.

Interestingly enough, the headline for InfoWorld’s coverage of the story, as written by Ed Scannell and Stacey Cowley, was: “IBM, PeopleSoft form alliance.”

The fact is, the IBM/PeopleSoft deal is all about middleware. It takes the form of a joint venture to fund interoperability labs in order to standardize PeopleSoft applications on IBM WebSphere. Actual dollar figures weren’t available.

Philip Fersht, group director for business applications at The Yankee Group, believes the bigger picture has everything to do with the eventual shift toward SOA (service-oriented architecture) on the part of the enterprise.

According to Fersht, a Yankee Group study of 437 enterprises in the United States showed that 75 percent of the key decision-makers in these companies are preparing to make large investments in SOA.

IBM and Oracle’s efforts to control PeopleSoft’s platform destiny are part of this larger picture. PeopleSoft is integral to the HR systems in 70 percent of U.S. enterprises, Fersht says. Sure, no one is going to change integration platforms just because of PeopleSoft — but it certainly adds fuel to the fire.

CIOs are reluctant to uproot their middleware unless absolutely necessary, but having Oracle trying to force the issue could have costly consequences, Fersht says. He likens it to being told you have to change the engine in your Ferrari.

“Oracle and PeopleSoft tied in together will impact the future development of these products with regards to competing integration solutions,” Fersht says.

The good news is that an SOA is flexible almost by definition, and in the long term, applications should run on more than one middleware platform. And if Oracle does succeed in buying PeopleSoft, it cannot afford to tinker too drastically with PeopleSoft’s applications, or customers will start looking at other platforms.

The bad news is that, whereas Fersht suggests that CIOs should start mapping out their long-term integration platform strategy, that’s a bit difficult to do while the bullets are still whizzing overhead. IBM is a middleware powerhouse, but it certainly would be foolish to underestimate Oracle — or SAP or BEA, for that matter. 

The Cold War ended when one side capitulated completely. Unfortunately, I’m afraid we’re going to find that high tech is far more complex than geopolitics.