HP and Oracle customers react: not happy, but coping

Since Oracle dropped their bombshell on HP and Itanium, I have fielded multiple emails and about a dozen inquiries from HP and Oracle customers wanting to discuss their options and plans. So far, there has been no general sense of panic, and the scenarios seem to be falling into several buckets:

• The majority of Oracle DB/HP customers are not at the latest revision of Oracle, so they have a window within which to make any decisions, bounded on the high end by the time it will take them to make a required upgrade of their application plus DB stack past the current 11.2 supported Itanium release. For those customers still on Oracle release 9, this can be many years, while for those currently on 11.2, the next upgrade cycle will cause a dislocation. The most common application that has come up in inquiries is SAP, with Oracle’s own apps second.
• Customers with other Oracle software, such as Hyperion, Peoplesoft, Oracle’s eBusiness Suite, etc., and other ISV software are often facing complicated constraints on their upgrades. In some cases decisions by the ISVs will drive the users toward upgrades they do not want to make. Several clients told me they will defer ISV upgrades to avoid being pushed into an unsupported version of the DB.

So what are these enterprises planning on doing regarding their server technology? The majority are planning to run their environments for some additional period of time while they look at alternatives. Only two of the clients I have spoken to are in what I would call a “panic mode,” and in both cases it's due to the announcement of termination of Itanium support coming at the end of the life cycle of their current installations and just as they were planning for major upgrades of HP servers and Oracle and other software. These two companies are, quite frankly, in a bind, and must find an alternative within the next 6 to 12 months.

However, lack of panic does not mean complacency. All current HP customers are considering options that boil down to three options, some of which they are pursuing in parallel:

• Hang in there – Because they are not pushing the limits of Itanium rev levels, the majority of clients I have spoken to are going to wait for a while to see if either Oracle relents or HP eventually (3+ years) comes out with an x86-based “Superdome class” system that runs HP-UX. My take on this is that 1) HP has the technology to do so, but 2) there is no guarantee that Oracle will support HP-UX, since the decision to halt Itanium development was clearly (IMHO) a competitively motivated decision. I have counseled Forrester clients that the likelihood of Oracle relenting is low.
• Move to Linux – All of the clients I have talked to have indicated that they are initiating or accelerating existing Linux migration programs. With Intel’s rollout of the E7 and associated systems from multiple vendors and the continued improvement of Linux, this is an option that most clients will explore. There is, however, lingering confusion about Oracle’s willingness to support Red Hat or SUSE, with several clients reporting that their Oracle sales teams had told them that Oracle will not support either of these variants in the future, but only Oracle’s own branded Linux. Needless to say, we’ll be going back to Oracle for clarification.
• Move to another UNIX vendor – Two of the clients I talked to have requirements that are sufficiently urgent and/or require a combination of throughput and reliability that their only reasonable option is to migrate to another UNIX system that supports future versions of their Oracle and application stack, and for most enterprises today that means a choice of either IBM or Oracle (although the one European user has an exposure to Fujitsu, which is also a highly qualified alternative since it is in essence an Oracle server). Ironically, one of these two had just completed a multi-year process of migrating from SPARC/Solaris to Itanium/HP-UX.

Customer emotions are running high around this event. Every client that I have spoken to feels like they have been directly attacked by Oracle, and a common thread running through all of the discussions I have had is “How can I move forward in a fashion that does not reward Oracle for this behavior?” The pragmatic reality is that most clients do not have any short term choice – the option to stay with HP-UX and run Oracle for a period of time and the option to move to Linux both reward Oracle. However, Oracle has primed the pump for users to consider a migration to Windows/SQL server, an option mentioned by five of the clients I spoke to, and for SAP customers, Oracle has created a group of customers who will be receptive to any attempts by HP and SAP to promote an “Oracle-less” solution.

As I noted in my previous post on this topic, the competing UNIX vendor that appears to be positioned to exploit this situation is IBM. IBM can easily run the Oracle workloads on its POWER servers, and has a viable option in DB2 UDB for migration from Oracle. There is a risk that Oracle can do the same thing to IBM that they did to HP (after all, any logic about relative CPU volumes that they applied to Itanium versus x86 is certainly applicable to POWER), but I think that they will not do so in the near term if at all for a variety of reasons, possibly including fear of a real customer panic and real customer loss to IBM, which, with its DB2 offering is not as defenseless as HP.

So, enough of my opinions. I would very much like to hear your take on this situation. What are your plans if you are affected, and what are your opinions if you have the luxury of being on the sidelines for this upheaval? I have created a Forrester Community discussion for Oracle versus HP, so please weigh in.