Thursday, June 23, 2011

Oracle vs HP and the consequences of this battle

Decisions have consequences. The more you wield, the larger the impact your decisions have on the people around you. This is especially true for Oracle or HP.

Oracle’s decision to stop making new versions of its database software based on the Itanium chip has severe consequences for HP, which had planned a future for its servers running on Itanium technology. HP also claim it was an illegal move performed by Oracle, forcing HP’s Itanium customers to switch to Sun servers, a company which was purchased by Oracle last year. Furthermore they claim that Oracle terminated a long term contract in the development of Itanium technology with HP. Therefore, HP has filed a lawsuit against Oracle. It is important to review the consequences of these industry changes.

As for HP’s server division, if their lawsuit turns out to be unsuccessful, the consequence consists in shifting focus away from Itanium technology servers towards different technologies. This also has consequences on selecting their industry partners to effectively support this new roadmap. Next to this, HP will have to encourage their existing Itanium customers in changing their Itanium server for different technology servers. This might result in a potential loss of customers and damage to its brand name.

Do you think Oracle’s actions are to be considered unethically or do they have valid arguments to state their recent decisions?  

The dispute between these two large companies has consequences for thousands of companies and governments far beyond their own industry and is a good example of the importance of competitive intelligence. Does your company have the processes in place to  keep you up to date with the latest insights on the market environment? Do you understand your competitors, customers, suppliers, regulators and distributors?

Wednesday, June 8, 2011

Balancing trust and innovation in the internet industry

During the last few months we have seen several security breaches into large companies’ online networks. Does this call for more regulation for internet companies? During the eG8 Forum in Paris last month, internet leaders and government regulators had the opportunity to exchange ideas concerning the future of the internet and whether it should be further regulated. The main discussion point is the boundaryless freedom enjoyed by internet companies and the huge amount of customer info captured in their databases that include both personal and financial details.

On the one side we have European telecom companies such as Vodafone and several national government bodies, arguing that there is too much at stake and that therefore trust, privacy and copyrights have to be guaranteed. Also from a fair practice viewpoint, telecom giants urge for regulation; why should internet companies be excluded from regulation when companies in all other industries aren’t?

Meanwhile the other side, including companies such as Google and Facebook, argue that innovation should be maintained. A McKinsey study revealed that the internet contributed during the last 5 years 21% of growth in mature economies. By imposing regulation on internet companies, they claim, this growth will level off. Furthermore, they argue, self-governing processes are present in many internet companies, such as eBay and Amazon.

Is there a middle ground between trust and innovation? Is it possible to implement a set of laws which prevents data misuse and enforces consumer rights, but at the same time allows for the internet industry to realize its full potential within a legal framework? Next to this, regulation often lags behind innovation. Basel III, for example, is a set of laws responding to those invented financial products which have caused the financial crisis of 2008. Should we be proactive or reactive when dealing with the new possibilities of the internet?