New Year, New CEOs at Major Technology Companies
Welcome to 2012. The first IT trend of the New Year: Many high-tech companies enter 2012 with new or recently named CEOs (examples include AMD, Apple, Google, Hewlett-Packard and IBM). Plus, a lengthy list of prominent CEOs (representing Cisco Systems, Dell, Microsoft, Oracle and Research in Motion) are under pressure to boost sales, profits and channel partner success. Here’s what channel partners should expect.
The VAR Guy will take a deep-dive look at one high-tech CEO per day over the next two weeks. The lineup includes…
New CEOs, New Challenges
AMD: Former Lenovo President and COO Rory Read joined AMD as CEO in August 2011. Read cut AMD’s staff in November 2011 and is now focusing the company on “low power, emerging markets and the cloud.” Can Read restore AMD’s profits while rewarding channel partners? Hmmm… The VAR Guy’s Closer Look: Available here (posted Tuesday, January 3).
Apple: CEO Tim Cook succeeded Steve Jobs in August 2011. Cook remains best-known for his operational leadership. But can he continue Apple’s core momentum (iPhone, iPad, iPod, etc.) while pushing into new markets — including television? And does Cook give a darn about Apple channel partners? The VAR Guy’s Closer Look: Available here (posted Wednesday, January 4).
Google: Everything old is new again. Co-founder Larry Page succeeded Eric Schmidt as CEO in April 2011. Steve Jobs once told Page to sharpen Google’s focus and zero in on a few core markets. Will Page follow that advice? While online advertising continues to dominate Google’s revenue stream and Android has captured consumer attention, the company continues to engage Google Apps channel partners and is even starting to promote Google Chromebooks through channel partners. But are partners profiting? The VAR Guy’s Closer Look: Available here (posted Thursday, January 5).
Hewlett-Packard: Can HP bury a bleak 2011 and regain its form in 2012? Former eBay CEO Meg Whitman succeeded Leo Apotheker in September 2011 after HP’s board lost faith in Apotheker’s leadership style. Under Apotheker, HP hyped and then killed its WebOS mobile hardware efforts, and considered spinning off its PC business. Whitman has promised to bring focus back to HP but can she mend fences with some HP customers and partners that felt betrayed in 2011? The VAR Guy’s Closer Look: Available here (posted Friday, January 6).
IBM: New IBM CEO Virginia (“Ginni”) M. Rometty succeeded Sam Palmisano on January 1, 2012. Rometty inherits a very strong company but some investors worry that IBM’s earnings growth will slow in 2012. Plus, is IBM’s channel focus — increasingly involving business analytics and business intelligence — too narrow for some partners? The VAR Guy’s Closer Look: Available here (posted Monday, January 2).
…Same CEOs, New Challenges
Meanwhile, a lengthy list of technology companies are in transition. Some CEOs may even be on the hot seat. Among the leaders and businesses worth tracking…
Cisco Systems: In 2011 CEO John Chambers conceded that Cisco had lost its focused. He shut down the Flip consumer video business, cut staff and promised to ensure the Next Cisco — with a sharper customer and partner focus — would emerge quickly. The VAR Guy’s Closer Look: Monday, January 9.
Dell: CEO Michael Dell has been pushing Dell deeper into multiple enterprise and cloud markets. Most of the moves involve acquisitions focused on storage, networking, security and cloud computing. But can Dell buy its way to success? The VAR Guy’s Closer Look: Tuesday, January 10.
Microsoft: In late 2011, the rumor mill suggested Bill Gates may return to Microsoft in a full-time role. (Gates dismissed the rumor.) The rumor surfaced as some Wall Street pundits expressed concerns about Microsoft CEO Steve Ballmer’s leadership. Under Ballmer, Microsoft has missed the initial smart phone and tablet tidal waves. But Microsoft’s ongoing success in the enterprise applications market — Exchange Server, SQL Server, Dynamics, Lync, etc. — remains largely overlooked. The VAR Guy’s Closer Look: Wednesday, January 11.
Oracle: In December 2011, Oracle unveiled disappointing quarterly sales and profits. CEO Larry Ellison insists that Oracle’s focus on engineered systems — integrating hardware and software — is the right strategy. But will customers and partners reward that focus? The VAR Guy’s Closer Look: Thursday, January 12.
Research In Motion: Apple iOS and Google Android continue to pressure RIM’s core BlackBerry business. RIM’s push into tablets has been an expensive experiment. And a cloud outage in 2011 sent some RIM customers running to the exits. Ironically, RIM has two CEOs — Jim Balsillie and Mike Lazaridis. Can either executive pull RIM out of its nosedive? The VAR Guy’s Closer Look: Friday, January 13.
Who Did We Miss?
Did The VAR Guy overlook any of your key technology partners? Do you need The VAR Guy to more closely analyze a hardware, software or IT service provider? Feel free to post a comment and The VAR Guy will give it a look.
a writeup on salesforce.com would be nice!
varfan:
The VAR Guy thanks you for your readership. Our resident blogger promises to add Salesforce.com to the list of targets. Target publish date: Monday, Jan. 16.
Also, check out TalkinCloud.com, The VAR Guy’s sister website. There, you’ll find plenty of Salesforce.com coverage for channel partners and cloud services providers.
-TVG
I have written some feedback on Exa-systems and my skepticism vs. Oracle’s prior quarters enthusiasm and tales of huge pipelines. Their last earnings call prompted me to try and look wider at all of Oracle and see where other challenges may be.
This is a bit lengthy, but it looks like the sailboat is taking on water, with cracks in the space age fiberglass hull.
Some challenges I see:
– Sun SPARC business – was in heavy decline when Sun owned it
stand-alone. Is going to continue to decline, and will cost many $ for
Ramp;D as they try to keep it alive. This is a double loser = lower sales
and higher costs. In addition the Oracle sales reps (including the
1700 new ones0 will be incented to push these more expensive systems,
and customers will soon not want to let them in the door and hear the
same old sales pitch on over-priced hardware.
– Middleware business – the Fusion middleware and BEA Weblogic stuff
is pretty old and bloated now. People are looking to move away from
Webshpere and the Oracle/BEA software to either lower cost JBoss, or
to more modern Internet based or cloud based development, application,
and data models. Expect this business to struggle as time moves
forward.
– Applications – their own pretty bad Oracle applications plus all the
legacy stuff they added, Siebel, Peoplesoft, JD Edwards, will be
harder and harder to sell going forward. Many users are trapped into
these solutions for several years, but there will be a growing number
of SaaS options to migrate people off from these, and new sales will
be harder since the Oracle reputation is suffering, and many CIO’s
would be fired for “buying old, complicated technology solutions” like
Siebel or Peoplesoft (hot in the 1980’s and 1990’s, in 2011 – not so
much. Expect tough sledding here also.
– Operating Systems – trying to keep Solaris alive, with the reality
that it never really took hold on x86, means they have to keep SPARC
and SPARC/Solaris alive and competitive. A very tough road to compete
with the Intel x86 machine, and the true “engineered systems” approach
(as in engineered for value, performance, and lower cost).
Furthermore they seem bent on wanting people to buy Oracle Linux. They
have been trying to convert Red Hat users for 5+ years, and I don’t
think it is working. By asking their sales teams to push Oracle Linux
they will likely delay sales of database, middleware, and hardware,
since customers smell the lock-in, and don’t appreciate Oracle telling
them not to use Red Hat, when Red Hat runs very well for them
throughout IT. They will have to give up on this program, or sales of
all hardware and software will get harder and harder for them.
– Virtualization – another area where they are bent on having people
buy their Oracle virtualization software, which has even less market
share than their Linux offering (my guess is that their Linux has 2-3%
share of the Linux market, and their virtualization less than 1-2% of
the Virtualization market). Again, it delay’s sales of their
database, middleware and hardware when they tell people they should
not run VMWare, and they already use VMWare widely in IT. I would
think the sales rep backlash internally on operating system and
virtualization stuff will be huge as they keep hiring salespeople and
kick their butts to make their numbers.
– Cloud wave – they are way behind here, and likely the internal
debates and potential collateral damage on product pricing, make this
a tough area for them. I could see them continuing to buy up things
(Cloud Provider/Hoster, SaaS and PaaS players), but trying to piec
them togetyher and rationalize with their other offerings, could be
overwhelming.
– Exa-systems – this is one that just seems destined for low-volume,
high-cost, and struggle – and eventually the hot-air of hype will have
to be let out (as it started to on their latest earnings report when
they had to eat crow about 1000’s of Exa-systems, actually being a
couple hundred. Like their foray’s into being an “Exchange killer”
many years ago, it will be hyped for awhile, but will be shut down
over time, and several customers will have modern day Data General
mini-computers on their hands.
– Core database business – they will be able to milk this baby for a
long time still, but with Internet applications and data explosion,
many people are developing new applications on noSQL type models. The
market forces don’t favor big growth in traditional SQL database
applications. Not going away anytime soon, but not high growth, and
new waves of technology, and modern developers that don’t buy into the
“safe to use an Oracle DB” approach.
– Storage – not sure how their Sun storage and tape business is doing,
but it seems like again, people are not likely to trust Oracle for
their storage assets that are used for a wide range of applications
and technologies.
– Customer and Vendor Partner Reputation – for many years Oracle has
been known to be difficult to deal with and quick to audit and get
lawyers involved. While in the meantime often getting into trouble for
business practices (e.g. state of california). Their negative
reputation will continue to grow as they try to push more 100% Oracle
engineered systems, and keep fighting against things like x86 and Red
Hat Linux and VMWare – stuff that IT users get great value from. In
addition they continue to be more negative and competitive with other
industry vendors (e.g. HP, IBM, Intel, Netapp, EMC, Red Hat, VMWare)
and these companies will continue to look for ways to not recommend
Oracle based solutions. Larry and crew have lots of swagger, but it
feels like the collective resources of these other guys will have a
negative impact.
– Investors and Wall Street – it seems like these guys have been
enamored of Oracle, and as long as numbers and profits grow, they will
kiss-some-behind. But this earnings call was a let down, and the
Oracle executives were their cocky selves. If they struggle for a few
more quarters, then Wall St will turn against them also. And Oracle
should remember who really runs the country; the folks in New York
that read the New York Times, not the folks in Washington that read
the Washington Post.
– Outside of the US – I expect more International backlash against
Oracle also. When you combine all the points above, and then layer in
the view that they are the pinnacle of an ugly american company,
people will look for alternatives more and more.
Can you look into the executive office of 9 Lives Media and there relationship with Penton Media, Inc. See if you can find out the details of the transaction and will this cause Varguy to be more or less of a hooker.
Bill@3: The VAR Guy appreciates the time you invested in that comment. You raise so key points — particularly about whether SPARC can be a profitable growth platform again when x86 is essentially ubiquitous. The VAR Guy promises to raise the issues you’ve shared the next time he interviews Oracle.
Frank@4: Um, how exactly has The VAR Guy changed since Penton Media acquired Nine Lives Media in August? Care to drop the personal attacks and share your concerns? The VAR Guy will surely reply.
-TVG
VARGuy – I think it would be good to dig deeper into some of the Oracle struggle areas I pointed out when you talk with them. I noticed one survey today that asked end users about Oracle and spending (a small clip and link is below.)
My assumption has been that if end users are surveyed, there will be some very different opinions of the appeal of SPARC servers, Exa-machines, Oracle Virtualization, Solaris, Oracle Linux, Oracle old line apps, and Oracle middleware, than when people ask Oracle employees or even their channel partners. But end users rule the day, when all is said and done.
—
http://blogs.the451group.com/opensource/2012/01/05/2012-to-be-year-of-linux-domination/
…
I also expect Linux will grow its presence and impact on the wider, more mainstream server market, where Red Hat and SUSE continue to benefit from Unix migration, particularly from Solaris. Our analysis with survey data from 451 Research division TheInfoPro shows server spending for databases and data warehousing favoring Red Hat with Linux over Oracle with either Linux or Solaris. Out of more than 165 server professionals interviewed by TIP, 67% are planning to spend more with Red Hat on database/data-warehousing, and only 6% plan to spend less. The positive figures for Red Hat mirror negative spending intentions for Oracle, with 55% planning to spend less and only 9% planning to spend more. Spending continues to decline strongly for all of the primary Unix providers in the study, which in addition to Oracle includes IBM and Hewlett-Packard.
…
Bill,
The VAR Guy saw that coverage, too. Yes, SPARC/Solaris to x86/Linux transition continues to be a market trend. Red Hat has teamed with IBM, HP and Dell for years to attack SPARC/Solaris. The VAR Guy will ask ORCL if (A) they can slow the trend or (B) get customers onto x86/Oracle Linux.
For the 451 Group report, The VAR Guy thinks some of the stats are misleading. Does CIO spending on “Oracle” involve just SPARC/Solaris? Sounds like the survey did not really focus on Oracle’s core business — databases and applications…
-TVG
After reading a glowing BofA financial analyst report on ORCL today, I then ran across some data I had been looking for, for awhile now – end user views. I have been trying to see if anyone was doing end user surveys about Oracle products and policies. This one pulls info from several end user surveys and shows some end user negative dynamics
http://www.crmbuyer.com/story/Oracles-Downward-Spiral-74110.html