Our lead designer, Anna Mekerian (View her LinkedIn Profile) posted a link to our facebook account (Check out our facebook page) that really made me a bit upset. For those interested, the link to the article can be found here (Oracle signs death warrant for Intel chip).
The gist of the article was that Oracle essentially said “no thank you” to a chip that Intel felt was a pretty good product. Why would something that provided up to 6 instruction cycles per clock cycle be so easily dismissed as part of a packaged offering? It’s simple. Intel made it hard for its customers to support the platform.
Oracle sells $36 billion per year. $36 billion that rely on hardware that is quite literally mission critical. Why would anyone (of any size) ever feel that they had any leverage over $36 billion in revenues? Even our Director of Sales here at AndPlus, who came to our organization from an inside sales position at Oracle (Anthony Salerno LinkedIn profile) often reminds people that as close (or not!) as we are to $36 billion in revenues, there’s not much we wouldn’t do for our clients! So the question remains, why doesn’t this $36 billion matter to Intel?
The quick explanation of what I read from the article is that Oracle felt that redeveloping its code to adhere to this family of processors was forcing Oracle to deliver a less efficient product which was being changed unnecessarily to match a product for which it wasn’t designed.
The first thing the article mentioned that jumped out to me was that Oracle essentially announced that Intel wasn’t committed to the product roadmap. How could Oracle really speak for Intel? The answer is they cant, so it was nothing but speculation. ”Perception is reality,” right? Well, the unfortunate reality is: if clients feel that you aren’t committed to delivering value along the path that they feel their organizations are on, these clients owe it to their respective stock holders to move to a platform or partner that fits the future roadmap. We find this all the time in our current client base, too! We as consultants have to continually develop our understandings and competences into new areas so that we’re ready to move when we’re asked, and ready to provide value when tapped for innovative movements within respective marketplaces.
It’s a double edged sword, though. As much speculation that exists in Oracle’s statement, there’s much speculation on Intel’s side that essentially has to suppose what its clients will need in 2+ years. R&D is often the highest, most difficult investment (and risk!) for companies, so to have one of your biggest clients (and supporter!) drop you is not a failure on the tech aspect, but in the management side. Management failed in this instance to provide value to customers, and therefore they were once again asked to exit a market that they, at one time, owned.
Although Intel came out and tried to reassure the public that Oracle’s statements were untrue, does it really matter? The damage has been done, companies are so intently focused on Oracle (48%+ market share world-wide!) that their words cut like a knife, and, well, frankly…. it caused me to write this post!
What do you think of Oracle’s statements and Intel’s response? Did Intel screw up? Why would Intel begin to ignore its clients’ needs? Is it possible that Intel is replacing the family of products for a more friendly line (compatible with x86 instruction sets?)? We’re interested in your thoughts . . .