Many customers wonder why Oracle never invests in advertising JD Edwards software. Is this a signal that our favorite product line is somehow out of favor? We were concerned as well and poked around to find out why. The answer both surprised us and provided some interesting insight into the strange and wonderful entity that is Oracle.
It was a great relief to find out that JDE Edwards is not at all out of favor. It is not at the top of the list of Oracle’s most important products, but it gets more positive attention and recognition by Oracle senior management every year. Oracle’s decision to not visibly promote JD Edwards is part of a broader policy to spend as little as possible in total on advertising. The little that is spent (relative to competitors) is focused on the Oracle brand name and not on any specific offerings.
Dislike of advertising is a personal quirk of Larry Ellison’s who takes great pride in spending far less as a percentage of revenue than competitors. As long as he is CEO the policy is unlikely to change. We have heard that debating this point with him can be a career limiting choice.
When Ellison does open his wallet we have been told that he favors magazines and posters in places like airports. Ellison supposedly will often write the copy himself. He apparently also insists on personally choosing the name for all new products. This is a possible explanation for the strange decision to call the BI product Oracle obtained when it bought Siebel Oracle Business Intelligence Suite Enterprise Edition Plus or OBIEE+ for short (some clients pronounce it “obese”).
The Ellison marketing mantra appears to be “if we build it, they will figure it out”. It is not hard to guess how he might have developed that opinion. During the two decades when Oracle was primarily a database vendor his approach made a great deal of sense. We believe that the technicians who make most database buying decisions are largely immune to marketing hype. It is in their nature to make detailed evaluations of the available choices and form options largely based on technical characteristics.
Ellison learned early on that slick marketing and advertising is a waste of money when selling IT infrastructure software to deeply technical experts. This principle held up well when Oracle got into the middleware business since similar buying dynamics are present. The question in my mind is whether this logic also applies to applications and business intelligence. In my experience, it does not because a different type of person controls the buying decision – one whose opinions can be shaped by the right kind of advertising.
In my experience, good advertising educates buyers. When attempting to sell something new and complex it is necessary to help potential buyers to understand what is being offered to them. The cost of both applications and BI is high. Approval requires the full support of both end users and non-technical executives. It is thus my opinion that Oracle’s aversion to spending money on advertising tends to lead them to under-invest in the education of prospects. I believe that Oracle’s application business has succeeded in spite of this policy.
Unfortunately, I have absolutely no influence over what Ellison thinks so my opinion does not matter. You can therefore expect Oracle to continue to only advertise its brand name and to largely do so in print. The JDE product line will not be advertised in any meaningful way but neither will any other specific products.
Oracle’s overall product line will become more useful, valuable and capable over time. As it does the names for new offerings will continue to be complex and confusing and too little help will be provided to potential buyers to makes sense of what they are and why they should be bought. Oracle will continue to assume that buyers will figure out what it is offering and that its sale force will be capable of closing deals with very little educational air cover. This will likely continue to work among larger enterprises but may continue to limit sales to more modestly sized organizations.
The bottom line is that Oracle will keep forcing prospects to work harder to understand its offerings than some of its competitors. Once understood, however, Oracle’s offerings will often be worth the effort.