Most Oracle JDE customers make some use of IBM servers or software so the slowly deepening rift between these two vendors has some relevance to them.  The latest episode in what is becoming something of a soap opera involves Joanne Olsen, an IBM executive who was recruited by Oracle to lead its On Demand efforts.  IBM was not amused by news of her departure and has filed a lawsuit to attempt to block it based on a non-compete agreement that she signed. 

It is my understanding that this type of lawsuit between IT industry giants is fairly rare.  The filing seems to reinforce the observation made here in earlier postings that the once quite cordial relationship between Oracle and IBM is in a downward spiral.  The Oracle acquisition of BEA a few years ago was the first of many direct challenges to IBM.  The latest, of course, was Oracle’s strong entry into the server market through the acquisition of Sun Microsystems – a business IBM was unable to acquire for roughly the same price that Oracle ended up paying.

The suit filing alleges that Ms. Olsen “… knows specific areas that IBM is targeting for growth and specific companies that IBM is considering acquiring in those areas.”  The new position that Ms. Olsen was recruited to fill apparently will report directly to Oracle Chief Executive Larry Ellison if she is allowed to take it. 

For nearly a decade IBM has been heavily promoting use of the term “On Demand” to describe the various ways in which software can be provided as a service rather than a product installed on computers that the client owns and operates.  On Demand seems to encompass many things including what others sometimes call “cloud computing”, software as a service, and other similar things.  IBM has invested heavily to build an image as the leading provider of On Demand services. 

Ellison is on record as being skeptical about how quickly the industry will adopt the model of having software run by others.  The creation of a new senior position to oversee this new selling model seems to signal an important change in his attitude.  Oracle may have accepted the inevitability of a growing shift toward the On Demand model. 

The court ruling regarding Ms. Olsen will likely not change two important things: The conflict between IBM and Oracle is nearly certain to grow in intensity; and the investment Oracle makes in providing On Demand services will continue to increase.