As you may have gathered by now (see ,), I’m skeptical about Oracle’s plans to create a one stop shopping experience for IT organizations by combining their software offerings with Sun’s hardware. But let’s assume for the moment that I’m wrong and Oracle really does plan to go down that path.
Such a move would attempt to turn the industry clock back 40 years or more to an era when IT companies were vertically integrated and IT organizations sourced pretty much everything from one mainframe vendor. At that time there was very little in the way of an Independent Software Vendor (ISV) community, you bought your hardware, operating system and applications from the same place. Over time vertical integration gave way to the horizontal integration that we have today, were companies pick and choose hardware, operating systems, and applications from a wide variety of vendors.
Each model has distinct advantages and disadvantages:
- Vertical integration: Buying everything from one company as an integrated package should certainly be easier to manage and gives IT organization “one throat to choke” when things go wrong. On the other, it’s likely to be more expensive to purchase because the IT organization is heavily committed to a single vendor’s solution which weakens their bargaining power.
- Horizontal integration: The large and competitive selection of vendors for every aspect of a horizontally integrated IT infrastructure means that prices are low and there is considerable scope for “let’s make a deal”. On the other hand, a horizontally integrated IT infrastructure will require more on site integration and ongoing management attention.
If Oracle is right and the industry is ripe for a move back to vertical integration, then we have to ask the question “how will this impact existing vendors.” That’s a big subject and too much to cover in one blog, so I’ll tackle in a series of blogs over the next weeks. The vendors I plan to look at are:
- Oracle + Sun
- Cisco + EMC + VMware
Posted by: Nik Simpson