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Oracle's funny numbers
January 20, 2006
On the heels of SAP's dubious claim that companies using its software are 32% more profitable than companies that don't, Oracle is now claiming that "leading global retailers who use Oracle Retail solutions outperform their peers with 49.7 percent higher operating profits and 61.5 percent higher return on invested capital." What's fascinating is that both SAP and Oracle base their claims on research from the same company, Stratascope. On Wednesday, I reported that Stratascope's CEO, Bruce Brien, took issue with SAP's claim of a causal relationship between its software and superior profits. In an email to me, Brien said, "We try to make it very clear to our clients that software does not make companies perform better, that software cannot improve your bottom line and that since most software is not free it will cost you money."
Now, Stratascope is also calling into question Oracle's numbers. The research firm yesterday issued a press release saying "it has discovered that its research had been mischaracterized, misrepresented and referenced without permission by Oracle Corporation to make claims about Oracle's performance in the retail industry." The release quoted Brien as saying, "As a Stratascope Inc. customer, Oracle has the right to pull financial statements out of our repositories, but we have no knowledge of the validity of the criteria and methodology they have used, particularly because several of their claims are based on a set of data that we do not possess. Our name, which was misspelled in their announcement, was used without our permission and erroneously attributed." In his email to me, Brien commented further: "The SAP study was conducted by highly trained financial analysts in my full-time employ. The numbers, methods, and formulas have been audited and we stand behind their accuracy. We cannot stand behind any claims that Oracle makes in this regard."
As with the SAP study, I find no indication that Oracle has released the details of its research, so it's impossible to check its claims. Corporate software buyers would do well to call the bluffs of both these firms.
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Comments
I just saw the news and thought of sharing it here and you are already ahead, as always.
Posted by: Sam at January 20, 2006 04:53 PM
Last month Gartner slapped Oracle's hands for twisting its numbers in an ad campaign against SAP ...see
http://dealarchitect.typepad.com/deal_architect/2005/12/the_pot_and_the.html
Digital Hatfields and McCoys
at a conference this week I heard reps from both sides say they are hearing customers tell them to turn off the nastiness towards each other...
Posted by: vinnie mirchandani at January 20, 2006 05:37 PM
"83% of all statistics are made up on the spot." --Anon.
Posted by: John Cowan at January 20, 2006 08:16 PM
Actually, I think it's 83.7%.
Posted by: Nick at January 20, 2006 10:13 PM
That's like me saying I just went out and bought all the tools I saw Norm use on his "Yankee Workshop" show on PBS. Now I expect they are going to build me a lovely cabinet!!!!
6 months later and I haven't touched the tools -- I want to sue those damn tool makers because I still don't have my cabinet.
As the consultants say "People, process, systems" Did anyone notice systems is 3rd? Sigh...
Posted by: Karl Waldman at January 21, 2006 10:10 PM
Oracle and SAP are playing a shameless game of 'monkey see and monkey do'.
It is sad when the two leading enterprise software companies must misrepresent survey information from the same company to stay in contention of who is the biggest monkey on Earth.
Both are key players in the marketplace and should not mislead their customers about their value.
Instead, I suggest they begin spending more time delivering 'value'.
Posted by: Tom Friedman at January 23, 2006 01:24 PM
A while back I made a post on this. Assuming that people who buy any Software or Hardware are capable (can question and dig deep into the research facts), have multi-million dollar budgets, and consider IT to be a strategic investment (not like ordering supplies for office or buying a toothpaste where you can live with vendors screaming for attention and differentiation with false claims), why does this happen in the first place?
Posted by: Nitin at January 24, 2006 03:49 AM
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