Sears eschews IBM/Oracle for open source and self build

Sears eschews IBM/Oracle for open source and self build

Summary: As Sears refactors its IT landscape, legacy vendors are finding themselves out in the cold in favor of open source alternatives.

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TOPICS: Open Source, Oracle
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In a comprehensive research note from Cowen & Co, analysts Peter Goldmacher and Joe del Callar note that IBM and Oracle are being edged out of Sears in favor of open sources alternatives:

The primary issue facing Sears was the reality that the current line up of technology it had been using from its existing vendors wasn't able to keep up with the demands of the business. The benefit of its transition to a custom environment [that includes significant open source adoption] is a more nimble IT infrastructure that can better support the business at a materially lower cost.

In making this radical shift, Oracle and IBM are the losers:

IBM mainframes and Oracle Exadata were two technologies described as too expensive and not flexible enough to adapt to the changes and seasonality of the business. Oracle RAC is being used only where absolutely necessary, and MySQL is seen as a compelling and viable alternative in most situations. The company is also moving away from Microsoft (Mail), Netezza (DW) and Greenplum (DW) in favor of open source solutions wherever possible.

What of the future?

Sears is investing aggressively in Hadoop, Linux and Private Clouds...these technologies are perceived as more flexible and cost effective. Sears has also been investing in IT personnel with advanced skills. Even with the increased investments in staff, the cost savings associated with getting off legacy technologies are perceived to be well worth it. Standardizing on as few technologies as possible is enabling IT to leverage staff across multiple requirements. ETL workloads on Hadoop have helped Sears make big strides towards a "Single Source of Truth" that was previously impossible. Sears is investing in high bandwidth connections to its stores and mobile, which should increase demand for Big Data mgmt and analytics.

Also see: Sears eyes big data for dynamic pricing, cost savings

Cowen's provided some interesting nuggets in the detailed analysis including:

  • Turning IT services into a commercial entity through the MetaScale subsidiary. Sears hopes this will help other large IT orgs adopt open source by leveraging Sears' internally developed skills. (Vinnie Mirchandani has been talking about this trend for some time.) It is developing talent from the inside as part of this exercise and already has customers in healthcare and high speed trading. 
  • New devices replacing handheld from 5-10 years ago.
  • Mainframe giving way to private cloud which is perceived as more scalable at lower cost.
  • Upfront investments for multi-channel delivery and loyalty programs are expected to lower future costs.
  • Open source removes the traditional relational database dependency. 
  • Putting petabytes of data into an Oracle stack was deemed 'extremely expensive' and even then Exadata could not handle Sears workloads.
  • SAP is ostenisbly interested in integrating with Sears' open source solutions.
  • It will take Sears around 2-3 years to move to a private cloud. This time frame is designed to ensure no breakages along the way. 
  • The general strategy is to be as devoid of vendors as possible, concentrating on open source wherever possible. 

While this kind of landscape is commonplace among newer businesses like Google, Facebook and so on, it represents a radical departure for an established business. I can imagine that many eyes will be watching closely to see how this ambitious project turns out. 

Topics: Open Source, Oracle

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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14 comments
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  • This has been my view all along

    Ultimately, the high priced lock-in vendors will lose out to open source solutions, when most of the necessary components are readily available.

    The economics of such solutions will drive them forward in highly competitive sectors. The fact that Sears apparently is becoming an IT service provider to other entities is also interesting.
    D.T.Long
  • A few points were confusing to me

    IBM's new mainframes support Linux (RHEL, SLES and Ubuntu) and are quite capable of supporting private clouds. Are IBM's Linux-based mainframes not cost-competitive with commodity hardware for cloud deployment? Sears still needs to buy their hardware from some vendor, presumably, with support.

    Also, wouldn't EnterpriseDB (PostgreSQL-based) be a much better drop-in for Oracle's proprietary relational DBMS than MySQL?

    And, SAP? There are also mature open-source CRM and HRM solutions available (e.g., SugarCRM).
    Rabid Howler Monkey
  • lower in cost, perhaps initially...

    While the appeal of open source and "agile," IT are compelling; what's going to happen is just a different type of proprietary.

    Staff will be building non-standard homebrew bridges at accomplish what mainstream software provides.

    I think in the short term I think this is great. In the long term, its all guessing if it'll play out and be lower in cost.
    unredeemed
    • That's a good point

      the moment you start to modify and change an open source product enough, it becomes proprietary in the sense that it's far different then what it was off the shelf, and in many ways unique to your business, and many times not something just any company can easilly jump in and work with if you scrap the original developers or contract company.
      William Farrel
    • I don't see what you are talking about.

      No where does the article say they plan to make "homebrew" systems.
      Linux professiionals, like myself, don't do one off, highly specialized systems with Linux any more often than the same is done with proprietory OSes, for exactly the reason you point out.

      It appears Sears plans on using mainstream open source projects, without modification, because the open source projects already comple with their needs.
      anothercanuck
  • Sounds like the beginning of a study in IT failure.

    Regardless of the technology involved, how many times have we seen large scale IT projects fail due to poor project management and ever changing user needs. This reads like the pre-amble to the next study.
    Digger_z
    • That is a risk in ALL IT projects

      Whether proprietary or open source. At least if you screw up open source, you do not have a long term contract to still pay for.
      D.T.Long
    • The very big difference

      between making bold announcements and actually doing it.

      The paper tiger always has bigger teeth than the real tiger.

      However I think build your own is highly viable but you need modern, flexible, reliable, productive, business oriented tools based on a sound theoretical basis - not Hadoop for God's sake.
      jorwell
      • Not as bas as it sounds

        Sears acknowledges it is on a multi year journey .It is looking at payback and ROI/TCO now and into the future. Hadoop can be tamed.
        dahowlett
        • I last used key value pairs

          On 1970s mini-computers that didn't have enough memory to run ISAM.

          Hadoop still processes data, something that last happened on IBM mainframes running COBOL in the 70s.

          Hadoop is interesting as a piece of industrial archeology, but has little or nothing to do with modern data management.
          jorwell
          • As a further explanation

            Modern systems perform logical inference on data, they don't process it.

            Unfortunately some people are so conservative they still haven't caught up with the big breakthrough made by Edgar Codd with the relational model.
            jorwell
  • The amount spent on Oracle/Agile SUPPORT ONLY at our company was

    twice what we lost per year. Odd thing was, we could make our product with only a desktop running MySQL and a loose leaf binder. We went out of business from the losses. Who knows what would have happened if we would have had the guts to stand up to IT and tell company leadership they could have just turned off the IT computers, cancelled the contracts, and saved the money...
    Tony Burzio
  • it's about risk.

    people usually focus on the CYA aspect of outsourcing - it's really an admission that your own IT department can't handle a project. it's not surprising that CYA outsourcing also tends to embrace high-rep vendors, such as IBM or Oracle. it's supposed to make you feel good as a stakeholder that huge companies have got your back. back in reality, those companies have often done a rather poor job. we all know stories of major vendors who give up on projects that are having trouble. other projects that get talked along long enough to assure the hook is firmly set, then costs somehow find themselves rising. how do you divine the difference between Peoplesoft having awesome core competence in ERP versus Peoplesoft whose thing is making money from ERP projects?

    the good thing about using Open Source is that you have autonomy: you are not beholden to some external entity who may be interested in building your business, or perhaps in building their own business. to the CYA mentality, having a vendor to blame is a huge win, even though it doesn't provide that much risk mitigation. having the source and the inhouse expertise, that's *real* risk management.

    DIY is not the same thing as amateur. sometimes the wheel needs to be reinvented. inhouse, opensource projects are a lot like eating your own dogfood.
    markhahn
  • It's about taking control of critical IT assets with open source

    This statement seems to sum up the strategic intent:

    "The general strategy is to be as devoid of vendors as possible, concentrating on open source wherever possible. "

    The idea that companies can use open source technologies + internal staff to get more from their IT is something we address in this Openbravo white paper:

    http://pages.openbravo.com/rs/openbravo/images/ERP_Legacy_of_Frustration_WP_EN.pdf

    The context of this is ERP for mid-sized companies (not mega-retailers like Sears), so may be more relevant for most readers. In any case, the concepts strike me as quite aligned.

    Disclosure: I work for Openbravo.

    BTW, I agree "Hadoop can be tamed", and can be a big win for large retail. Still lots of batch-style processing that needs to be done in that domain...
    johnfandl