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Oracle's delusional hardware marketing isn't fooling anyone

Rob Enderle | April 1, 2013
Despite repeated reprimands from the National Adverting Review Board, Oracle continues to run ads making questionable claims that its Sun hardware outperforms the competition. This isn't surprising--perception often trumps reality in advertising, after all--but will Oracle ever be able to back up its claims?

Oracle's Past Ad Claims Coming Back to Bite It

Oracle advertising has been presenting Sun in an overly positive light for some time now-and has been getting regularly slapped for it. The National Adverting Review Board (NARB) of the Better Business Bureaus told Oracle to recant in April, July and November of last year. Four months later, Oracle has complied with the NARB, albeit partially.

But Oracle started down the path again this week, comparing Sun hardware against a technology spec from IBM that's around five years old and, surprise, finding that Sun hardware outperforms it. As before, IBM isn't amused. Oracle will undoubtedly get slapped by NARB again but it will keep doing this.

Sometimes, when a company does this repeatedly, it's not fooling customers as much as it's fooling itself. While I worked in IBM Storage in the early 1990s, the internal competitive analysis folks found that they got better personnel reviews, and more funding, if they wrote reports stating that IBM hardware was better than the competition, even though it increasingly wasn't. Over time, IBM went from a market share of 90 percent to selling off its storage unit as a largely failed endeavor. What was once one of IBM's largest and most successful plants is now mostly gone after being sold to Hitachi.

I think something similar is happening in Oracle. It put Hurd, a cutter who almost single-handedly destroyed Hewlett-Packard, in charge of Sun. The outcome was always going to be catastrophic for that unit. But from Hurd on down, if Ellison sees how bad things are actually going, then these executives' bonuses, salaries and continued employment will be at risk. They all may have created the perception that Sun is actually competitive, then, to fool Ellison-likely arguing that actual sales number are low because customers are too stupid to see Sun's clear advantage, when it isn't the customers who are stupid at all but, rather, the guy actually being fooled.

This likely explains why the problems aren't being fixed, either. Senior management likely isn't aware of how bad things are or even the source of all the problems. That said, Oracle's recent financial results, even with creative positioning, should be providing a pretty big clue if Ellison wasn't distracted by his other personal projects.

Fool Customers Twice, Shame on Them; Fool Them Again, They Walk Away

I doubt many of you are fooled by what Oracle is trying to do with its screwy claims, largely because I've read the recent IBM financial report that says Oracle is bleeding customers, but the company's actions point to how easily we can be fooled by facts that we want to be true.

 

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