How a tech leader is marketing new

November 25, 2002

BY MICHAEL KRAUSS

Near the peak of the dot-com boom, I tried to book a billboard on Highway 101 heading out of San Francisco toward Silicon Valley.

I'd read in The Wall Street Journal that Informix, an upstart database software company, was using billboards to taunt their rival, Oracle. Something about Informix leaving Oracle in the dust, as I recall.

I had a less frivolous concept for a billboard, but my agency told me all the prime space on Highway 101 was booked for 18 months. I dropped the idea.

Today, with ad budgets slashed in most categories, it's odd to think a company would take out a billboard just to tweak the competition. Such were the days of the decade-long database software wars when companies like Informix, Sybase, IBM, Gupta, Cullinet, Microsoft, Oracle and others slugged it out trying to become the standard in this particular category.

While reasonable people might differ, Oracle, I think, is clearly one of the victors, now holding an estimated 32% share of this $8.8 billion market, according to the Gartner Group, an industry research firm. IBM, Microsoft and others are major players, but I think it's instructive to look at Oracle.

In a recent interview, George Demarest, senior director of product marketing at Oracle, gave me a recap of the database wars and told me how Oracle is approaching today's more constrained marketplace.

To most individuals, a database is nothing more than a glorified spreadsheet. It's information that we manipulate in Excel or Lotus programs. A few of us use Access, the Microsoft PC database program. The sales folks I know tout ACT! 2000, the sales contact database software.

Industrial-strength database software, like Oracle 9i, helps business users reach and manipulate information and solve problems. It helps them make use of the data they have. Database software is pervasive, and today many companies build data warehouses, global repositories of information that can be accessed and updated in real time from anywhere around the world. Often at the core of these data warehouses is Oracle's 9i software.

"In the '80s, there were lots of players," Demarest says. "You had this explosion of innovation, but in the '90s there was a move to consolidate and standardize on fewer technologies. In the '90s, Oracle took the pole position and never looked back," says Demarest. "Today there are only three major players: Oracle, Microsoft and IBM (which bought Informix)."

The core of Oracle's strategy was a product development effort. Oracle created a more flexible and portable database software product that ran on a variety of technology platforms. "IBM's product ran only on mainframe computers," Demarest notes. Sybase ran on a few platforms, but Oracle created software that could run on multiple platforms. "There are 75 different flavors of Unix," Demarest adds. "Oracle ran on these as well as on traditional mainframes."

Buying Oracle became an easy purchase decision for the CIO because people could write their applications knowing they would work on Data General computers the same as on others. It didn't hurt that there was a network computing revolution in the wings and that Unix computers would become hugely popular.

Oracle was aided by the rise of Internet computing. Early on, they smartly re-christened their product (then Oracle 8), Oracle 8i with the "i" standing for Internet. It made the point that their software was more than Internet-friendly. As Unix technology became the backbone of the Internet, Oracle rode the wave.

Other factors helped Oracle. They're blessed (and occasionally cursed) with a vocal, visionary and persuasive CEO, Larry Ellison, who has routinely crisscrossed the globe touting Oracle. I remember hearing Ellison describe Oracle software as the standard. He'd sell the product's benefits at processing terabytes of data, while using sarcasm, cynicism and humor to knock the competition. You'd come away from Ellison's presentation thinking only a fool would consider another product.

The fierce aggressiveness of the Oracle sales force is well-known. At the top of the dot-com boom, there was also an aggressive communications campaign supporting Oracle reminding us that 10 of the top 10 consumer Web sites and nine of the top 10 business-to-business Web sites were powered by Oracle.

And now? What are the marketing strategies after the war? Well, the client base remains strong; Demarest quickly rattles off a bevy of Oracle clients from the leading European nuclear research lab CERN, to eBay, Amazon, Wells Fargo bank, and even the Austrian National Railway, whose timetables rely on Oracle.

"We power 75% of the (enterprise resource planning) installations in the world," Demarast says. AMR Research points out that Oracle works for 93 of the Fortune 100 companies. Not a bad installed base.

But the times and the marketing strategies are different. "We've had to respond to a change in buying patterns," Demarest reports. "People are only looking to fund projects that have a positive impact on revenues or reduce costs. Today, we identify as much as possible how productivity can be increased and costs can be cut through our software.

"We talk about how consolidating databases can reduce overhead. We use analysts to look at the problem of server consolidation and how fewer servers can save money.

"Sometimes people think of marketing as only about the sizzle," Demarest says. "You've got to have proof behind any really serious marketing. We do ROI studies to demonstrate results. Our marketing has moved away from talking about the best technology features to a discussion of ways our technology can cut hardware costs by 40%," he says.

Oracle's also providing technology outsourcing and will manage customer databases remotely. They claim they can cut their client's database administration costs by 48%. They've also been marketing less expensive product versions with fewer features.

"Right now, it's all about pain," Demarest says. "It's all about identifying customer pain points and conveying the fact that you have a viable, cost-effective solution for eliminating that pain. No one is talking about getting exponential growth out of their company."

Listening to Demarest, you realize these are sobering times in technology marketing. Oracle is clearly a leader, but I don't think billboards will be on Demarest's agenda.

Michael Krauss is a partner with DiamondCluster International in Chicago. He can be reached at michael.krauss@diamondcluster.com or news@ama.org.