When Is VaporWare Not VaporWare? Hardly Ever

Written by Evan Schuman
September 19th, 2005

SAP and Oracle are fighting a marketing battle that recalls the grand days of vaporware. By making acquisitions to fill product holes, instead of filling product holes, they promise to deliver a solution that is greater than the sum of its parts. But retailers need to wait months and years to see if it pans out.

The software industry has for years had a proud tradition of announcing product long before an actual product existed?vaporware, in other words: software specs and capabilities that didn’t really exist but might exist in the future.

There were many thought-leaders in vaporware production, but Microsoft was always my favorite. When it announced nothing, it was really nothing.

Oracle and SAP are giving that time-honored custom new spit-and-polish with strategic acquisitions in retail. The acquisitions are certainly real and the capabilities of the acquired software specialists are also quite real.

But the essence of both vendors’ announcements has been the argument that the combined whole will be greater than the sum of the parts. This is usually backed up with the logic that huge investments are imminent from the new wealthy corporate parent and that the good software specialist from before will now blossom into a great technology powerhouse.

Unfortunately, history does not look kindly on such promises. In the worst examples, the corporate parent imposes its own culture and views on the purchased specialty app and kills the value that customers saw. In the best examples, the corporate parent changes little, which invariably forces the question of what the customers gained.

This week’s examples from SAP and Oracle illustrate two different aspects of what had been the “now you see it, now you don’t” marketing illusion and is now the “now you don’t see it and there’s a really good chance you never will” illusion.

Up first was Oracle. Oracle has made several excellent recent acquisitions in the retail space, including ProfitLogic and Retek.

On Tuesday, Oracle will announce the creation of Oracle Retail, which Oracle will say is “a new brand that brings together the best retail expertise and technology of Oracle and the former Retek and ProfitLogic companies.”

That already existed. It was called Oracle and it happened the moment Larry Ellison’s team announced both deals. The statement Oracle has prepared goes on to list lots of capabilities and combined customers, but nothing there is new. It’s literally things they could have said?and, for the most part, did say?when the deals happened.

They could at least have had the courtesy to make up some new name for the brand. The Cyclone, the Cobra, the Ellisonater or something.

Their problem is real. They have to convince retailers to stay put while the bigger Oracle integration?when the recent large PeopleSoft acquisition is factored in and the older J.D. Edwards acquisition is smoothed out as well?happens under the name Fusion. (SAP’s nicknaming the strategy Confusion is one of the better SAPisms from recent months.)

But in the POTS-calling-the-analog phone-black example is SAP’s response on Monday, when it announced its own excellent acquisition, that of Toronto retail software specialty firm Triversity.

Jim McMurray, the SAP America SVP for the retail business unit, rattled off three functionality areas (Java-based J2EE, analytics/loss prevention and client/server POS) where he argued the SAP-Triversity combo did better than the Oracle-Retek-ProfitLogic combo.

Fair enough. But he then said that for retailers who liked the combo, “You don’t have to wait. There’s no need for integration with Project Fusion.”

The only problem was that, less than an hour after he said that, Dave Thomas, the articulate and impressive CEO of Triversity, was talking about how much further than those advantages the SAP-Triversity deal potentially goes.

The POS, he says, has become lightyears more than just a faster more computerized version of an electronic cash register. It’s now the heart of almost everything that is strategic in retail IT operations.

Those things include loyalty, CRM, loss prevention, centralized returns, gift cards and even Web integration/multi-channel activities all falling under into the POS jurisdiction.

“There are quite a few new solutions through the combination, with complex order management driving that right down to the store level,” Thomas said. “We’re bringing multi-channel CRM into the retail store space. SAP didn’t buy Triversity for POS only. It’s much more broader and more elaborate than that.”

But he said those things won’t happen until SAP and Triversity (and whoever else SAP gobbles up in the meantime) work out a timeline.

So SAP’s promise that its users won’t have to wait rings hollow. Of course users will have to wait. At least SAP’s newest exectutive?Thomas?can articulate a strategic vision about why these pieces should work together and why the SAP whole may indeed be greater than the sum of the parts.

But it’s just a vision. A well-thought persuasive vision, yes, but simply one view of how things might be. Retail CIOs need to make multi-year decisions about where they need to position their companies and they can’t wait for roadmaps to be finalized.

The wisest course of action seems to be for retail CIOs to assume that the roadmaps will never happen and make their decisions based on the core software (Oracle or SAP, in this case) and hope that the other pieces will fall into place.

I don’t mind when vendors tout that their product line strategy is better than another vendor’s. But when Oracle puts a pretty bow on old announcements and wants us to think it’s something new or when SAP announces an acquisition and wants us to assume that a combined product line is instantaneous, it certainly makes me long for the good old vaporware days. At least then you knew what you had: nothing.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.