Dell edges out SAP and Oracle for ‘Bozo of the Month’

analysis
Aug 21, 20084 mins

The company that invented nothing tries to hijack cloud computing with a cheesy legal play. SAP, meanwhile, tries to pull a fast one on its customers. Don’t let them get away with it.

I know I’m supposed to be objective — or at least restrained in my opinions — but I can’t help but see Michael Dell’s attempt to trademark “cloud computing” as anything other than the cheesy, contemptible antic of a clown.

There, I said it.

There’s not much excuse for Dell’s action, but it would be less upsetting if Dell and company were great technologists. Or even OK technologists. But Dell has built the world’s largest screwdriver shop on top of other people’s technology, and if the company has ever made a serious technological contribution, I’ve yet to hear of it.

As it happens, the U.S. Patent and Trademark Office has apparently soured on the idea of allowing Dell to trademark “cloud computing” after first giving it a tentative OK. Dell has six months to appeal the decision. Given the way Washington, D.C., works these days, Dell’s money may well talk. We in the IT community should have a say as well. Give a call to Ruth Nybold, the PTO’s public affairs officer, at (571) 272-8400 or send an email to Ruth.Nybold@uspto.gov, and tell her what you think.

[ Learn more about what cloud computing really means and the new breed of utility computing and platform-as-a-service offerings. ]

If Dell is my first official “Bozo of the Month,” SAP and Oracle, both of which snuck in hefty price increases earlier this summer, are runners-up. Sure, big software vendors make no pretense of being charities — nor should they — but at a time when IT budgets are being pressured by the worst economic climate in decades, squeezing the customer is really, really stupid.

User groups stand up

Back in May, SAP announced the elimination of standard and premium support offerings for new customers — we thought. But in July, the German software giant, said, “Uh, actually we are going to ‘transition’ existing customers as well.”

Why SAP choose to make the move wasn’t so hard to figure out. SAP and Oracle not only compete in the software market, but their stock offerings compete in the equities market. With Oracle shooting for margins of 50 percent and 20 percent annual growth in earnings, “SAP has been left little choice but to respond with a maintenance fee increase to achieve double-digit earnings growth,” says Forrester analyst Ray Wang.

In an interesting and very straight-ahead report, Wang noted that maintenance continues to be the most expensive cost component of enterprise software. “At 22 percent of net price, customers pay the equivalent of 2X their original license cost over a typical 10 year ownership lifecycle,” Wang wrote. Even worse, most customers don’t even use it, at least not very often. “The average customer claims to connect with SAP less than 5 times a year. This is the software equivalent of getting an expensive but comprehensive insurance policy and never utilizing it,” he wrote.

Not only did Wang point out the wastefulness of paying so much for support you rarely use, he had a number of useful suggestions, as well:

Look to third parties for support. “Rimini Street’s recent announcement to provide third party maintenance in 2009 is worth a look. JD Edwards and PeopleSoft customers who have considered this option already save up to half of their Oracle maintenance fees.”

Galvanizing the SAP User Groups to take action. “Now is the time that customers should leverage their independent users groups to organize a campaign against this maintenance fee increase. This will be the real test of these users groups effectiveness. It will become painfully obvious which individuals in leadership positions have been under the influence of SAP and which individuals will be willing to back the end users.”

Determining long term SAP containment strategy. “Most SAP customers adopted a single vendor strategy. The initial benefits were driven by a fear for complicated integrations, desire for process standardization, and need to expedite deployments pre Y2K. This strategy has led to vendor lock-in and vulnerability. Long term apps strategy should consider how to contain future risk in a single sourced ERP scenario.”

All of those points make lots of sense, but I really like what Wang says about pressuring user groups to take a stand. How much time and money to you devote to these groups? If outfits like ASUG, DSAG, SAP Users Group UK & Ireland won’t step up to the plate when really needed, what good are they, at least under the current leadership?

InfoWorld’s campaign to Save XP won some concessions from Microsoft, and there are even indications that Ballmer & Co. are getting the message about Vista.

It’s about time IT users stopped putting up with bozos and their stupid, selfish tricks. Let me know who the bozos are. Reach me at bill_snyder@infoworld.com