Undoing the dupe: A way out of your Big Software contracts

By Roger Burkhardt, CEO, Ingres

(Last month Burkhardt wrote about how Big Software companies lock customers into restrictive software licensing agreements and continue to raise prices, even during tough economic times. Here Burkhardt offers some tips for effectively renegotiating contracts with your current Big Software suppliers.)

Burkhardt tells how to untangle your company from Big Software. Photo: Ingres

For decades now many of us in corporations have been paying loads of money to work with Big Software companies like Oracle (ORCL), Microsoft (MSFT), IBM (IBM) and SAP (SAP). Our information technology employees are familiar with these software vendors and their technologies (and their proprietary licensing models) and may even identify their careers with them. So, while we may suspect we are being overcharged, and could spend millions less running our IT departments, we have remained comfortably, and expensively, locked-in.

But we want to be back in charge. And we deserve to be; we’re the customers that line the pockets of all Big Software companies. Without us, who would buy all that software?

But we question whether it is even possible to break away from this perverse reality where software leviathans dictate both economic terms and the technology road maps that are critical to our business. More

Is it time to dust off the party hats?

From the cheery headlines accompanying the latest round of tech earnings, you’d think so. Google (GOOG) CEO Eric Schmidt declared last week that, “the worst of the recession is behind us.” IBM (IBM) actually boosted earnings targets for the year. Taken along with the stimulus potential of Windows 7, Microsoft’s (MSFT) critically acclaimed PC operating system that launches this week, some say happy times are here again.

Not so fast. As we head into week two of this round of tech earnings, it’s important to keep in mind what these numbers show, and what they don’t. More

After the Vista debacle, Microsoft changed the way it makes software. The result – Windows 7 – is winning raves. Can a new operating system (and a new attitude) help the company take on Google?

With Microsoft's founder and chairman, Bill Gates, trotting the globe in a quest to abolish diseases, his handpicked successor, CEO Steve Ballmer, has had most of a decade to move the company beyond its two biggest cash cows, the Windows operating system and the Office productivity suite. So far, not so good.

The company's web forays, such as MSN, have only highlighted the dominance of Google and Yahoo. In software for smartphones, there is Apple, RIM (RIMM), and everybody else. MP3 players? Microsoft's Zune hardly merits a mention. And even the core franchise has suffered. In the face of slowing PC sales and the economic pall, Microsoft's fiscal 2009 revenue actually contracted, to $58.4 billion from more than $60 billion in fiscal 2008 — and the company missed its earnings estimate by more than $1 billion.

Fresh Coat of Paint: Artist Ricardo Richey, commissioned by Fortune, spray-paints a street-smartversion of Microsoft'sname and Window's logo on a San Francisco wall.

But the biggest failure under Ballmer's tenure was self-inflicted. Vista was meant to be a wholesale reimagining of Windows, the brand name for Microsoft's operating systems dating back to the early 1980s. Every so often the company unveils a new OS, blandly named for the year of the release (Windows 95, Windows 98) or a geeky abbreviation (Windows XP is short for Windows Experience). Vista had a marketing-friendly moniker, a fancy user interface, new security architecture, a better file-storage system, and much more. More

IBM (IBM) is pushing more of its technology into trains.

The company has announced today that transit agencies in New York, San Francisco and Washington, D.C. will use its Maximo software to monitor the health of rail cars, bridges, tunnels, tracks and other assets, and flag them for maintenance before they break down. More

Live from New York, it's Sam Palmisano.

Palmisano is spending almost two days talking about smart stuff. Photo: IBM

The business strategy made possible by $50 billion in acquisitions, hundreds of millions on marketing, and various forms of ecological disaster, is taking the show on the road–to Manhattan's Lincoln Center.

For the next day and a half, IBM's (IBM) Smarter Planet initiative will occupy New York City's Lincoln Center in the form of a conference on developing smarter cities. IBM CEO Sam Palmisano and Mayor Michael Bloomberg will kick off the event this afternoon with a discussion about the steps New York City has taken to employ a combination of data-gathering and analytics software to reduce crime, minimize risk for firefighters, and monitor water conditions.

The remainder of the sweeping agenda will cover everything form education, healthcare, energy, and transportation, to government services. Weighing in on such heady topics will be political heavyweights–including the governors of Vermont and Georgia as well as the mayors of Atlanta, Charlotte, Phoenix, and San Jose.  Business leaders, including the chairs and CEOs of ABB, Mayo Clinic, National Football League, and Verizon Communications (VZ), among many others, will offer their perspectives. More

Ellison asks if Microsoft matters. Photo: Oracle

Oracle's Ellison gives the tech world a topic. Discuss among yourselves.

Does Microsoft matter? That's the question the noted Microsoft (MSFT) hater and Oracle (ORCL) CEO Larry Ellison found himself answering at a Silicon Valley event Monday night. The short answer, as Jon Fortt reported here, was yes.

The longer version of his answer on the one hand shows Ellison as the old zen master that he is, making a backhanded and self-serving swipe sound like an innocuous observation. At the same time Ellison raises a fascinating point that's worth exploring further.

First consider his comments in their entirety when asked about the relevance thing by former Sun (JAVA) president and Motorola (MOT) CEO Ed Zander.

More

Billionaire Oracle CEO Larry Ellison doesn't expect the U.S. economy to significantly improve until halfway through the next decade – a gloomy scenario he dubbed an L-shaped recovery.

"The American consumer is so deeply in debt, this is not going to come back, certainly for five years," he told a packed ballroom at a Churchill Club event in San Jose. "I believe we're going through some fundamental changes." More

She's CEO Larry Ellison's secretive but effective right hand, and one of the most powerful women in Silicon Valley. But who is she, really?

Catz is yin to Ellison's yang. Photo: Jay Mallin, Bloomberg News

After months of on-again-off-again negotiations to sell itself to IBM, Sun Microsystems this spring found a new, if unlikely, suitor. Oracle, the business-software giant, in many ways promised to be a better fit for Sun, the beleaguered maker of server computers.

A Silicon Valley neighbor whose CEO, Larry Ellison, is pals with Sun chairman Scott McNealy, Oracle (ORCL, Fortune 500) posed less of an antitrust risk because it wasn't already selling hardware like IBM (IBM, Fortune 500).

But Oracle's all-cash offer of $9.50 per share, or $5.6 billion minus Sun's cash and debt, bested IBM's per-share bid by a mere 40 cents. So on the afternoon of Saturday, April 18, during a Sun board meeting called to pick a winner, CEO Jonathan Schwartz did what chief executives must do in such situations. He phoned Oracle to ask for more money.

He didn't call Ellison, his titular counterpart. Instead, he dialed Safra Catz, Oracle's president. Schwartz proposed a higher price, which, in the dry language of a subsequent securities filing, "Ms. Catz stated would not be acceptable to Oracle." Tail between its collective legs, Sun's board of directors accepted Oracle's final offer that weekend, informed IBM it was out of the game, and on Monday morning announced the shocker of a deal. Read the rest of the story here.

Oracle CEO Larry Ellison says he wants to keep Sun's hardware business, but he might be bluffing. Photo: Oracle

Could the Sun still come out at HP?

It’s no secret that Larry Ellison wanted Sun Microsystems (JAVA) for its software, not its servers. Regulatory filings show that before the hard-charging Oracle (ORCL) CEO put together his successful $5.6 billion offer and outbid IBM (IBM) for Sun in April, another party was kicking the tires as well.

One of the worst kept secrets in Silicon Valley is, that someone was Hewlett-Packard (HPQ) CEO Mark Hurd.

Since then, though, Ellison has said that he intends to keep all of Sun for himself. More

Intuit, maker of finance software, turns its attention to health-care bills.

Quicken hopes to make health benefits intuitive. Image: Intuit

If you have health coverage, perhaps you've received that ominous-looking piece of mail from the insurance provider that declares: "This is not a bill," but looks a lot like one.

It’s called an "explanation of benefits." But the correspondence doesn’t seem to offer much of an explanation to anyone who lacks a medical degree or background as a company benefits manager.

Intuit (INTU), the company that simplified personal finance, hopes to help consumers untangle the complexity of health benefits and medical bills.  Earlier this year, Intuit introduced Quicken Health Expense Tracker, online software that translates medical jargon, shows the math behind the costs, and explains what to do next if there’s a question or problem. More