Oracle’s Withdrawal of JDE ‘Blue Stack’ Raises Questions
December 27, 2010 Alex Woodie
You kind of expected this to happen. Earlier this year, Oracle quietly announced it will no longer sell the “Blue Stack” set of tools that makes it more convenient for JD Edwards EnterpriseOne customers to run their ERP system on IBM platforms and middleware, including IBM i. Instead, it will only offer the Red Stack, which is based on (you guessed it) Oracle platforms and middleware. While Oracle has confirmed that it will continue to support EnterpriseOne on IBM i, its decision provides a strong incentive for customers to move to the Red Stack.
Just prior to its Oracle Open World conference in September, Oracle revealed to business partners that it will no longer offer new customers the EnterpriseOne Technology Foundation, which is the so-called Blue Stack bundle of various IBM software products, most notably the WebSphere Application Server and DB2 database. Existing Blue Stack customers can keep buying and expanding their Blue Stack installations through the end of 2013. After that, Oracle will no longer sell any Blue Stack products to existing customers. Oracle will provide technical support for Blue Stack products through September 30, 2016. After that, Oracle says it will refer all sales and tech support calls to IBM.
The Technology Foundation is a carryover from the days when JD Edwards was an independent ERP vendor based in Denver, Colorado. The idea was to make it easier for prospective OneWorld (as EnterpriseOne was called back then) customers to obtain all of the software and licenses they would need from a single vendor. Since a good portion of OneWorld customers were upgrading from the AS/400-baesd World ERP suite, they were familiar with IBM servers, and many opted to run their new OneWorld software on IBM hardware (AS/400, RS/6000, or Netfinity Windows-based servers), and use IBM middleware.
The Blue Stack partnership with IBM carried on through the acquisition of JD Edwards by PeopleSoft in 2003. When Oracle finally gobbled up PeopleSoft in a hostile acquisition a year later, it left the Blue Stack partnership intact. This was a compromise on the part of Oracle, which had shaken up the customer base during the acquisition (remember, Oracle CEO Larry Ellison had threatened to kill off PeopleSoft’s products) and needed to calm some nerves. But the time for killing the Blue Stack deal would come, as selling and servicing the software of your biggest competitor is too nice of a thing for Oracle to do for very long.
Now that Oracle owns Sun and has a complete server stack of its own (based on Oracle Linux, Sun Solaris, the Oracle and MySQL databases, the Oracle and WebLogic application servers, and various and assorted other middleware products sold under the Fusion brand), the $150 billion company apparently figures it no longer needs to appease its EnterpriseOne Blue Stack customers, and can move forward on its strategy of selling completely integrated business systems (sort of like the AS/400, ironically). To that end, it’s stacking its cards in favor of Red Stack, officially called the Oracle Technology Foundation.
One Throat to Choke
Oracle’s hardball tactic will force some changes on the part of thousands of happy EnterpriseOne customers who run the software on IBM Power Systems servers. While Oracle will stop selling and servicing the Blue Stack, it will not completely kill off the Blue Stack. Customers are still free to run their EnterpriseOne software on IBM i servers, and Oracle will support the ERP applications running there, an Oracle spokesperson confirmed to IT Jungle. Just the same, ending support for the IBM middleware will force anybody who’s considering running EnterpriseOne on IBM i servers to think twice about that approach.
Blue Stack sales are done. “But that does not mean that EnterpriseOne won’t run on the Blue Stack. It’s just that customers will need to go to IBM to buy more licenses and to receive IBM application support,” says Gregg Larkin, a JD Edwards systems engineer with a Fortune 500 industrial gas company, and a contributor to JDEtips . “Oracle will support their apps, not Big Blue’s. Seems fair. They aren’t supporting Windows and SQL Server either. Why should they support a competitor’s product?”
The IBM i platform has not been a preferred environment for EnterpriseOne installations for some time. After all, it was originally created to give JD Edwards something to sell that didn’t run on that platform. However, there is still a considerable amount of momentum for EnterpriseOne on IBM i. An estimated one-third to one-half of the 3,000 or so EnterpriseOne customers run either the application server or (more often) the database server component on Power Systems, System i, or iSeries hardware. Comparatively, all of the customers of the older JD Edwards World product run on the IBM i platform.
While EnterpriseOne customers can still run on the IBM i server, Oracle’s decision to stop selling and servicing the Blue Stack will give customers a bigger incentive to choose the Red Stack and go all Oracle, from top to bottom. After all, if it takes extra steps to buy the middleware needed to run EnterpriseOne in a Power Systems environment, and introduces another step in the support process, people will tend to gravitate toward the simpler approach.
In the future, more EnterpriseOne customers are apt to move to an all-Oracle environment, such as Larkin’s company is doing. “Oracle is hoping that more customers will follow our lead,” Larkin says. “We are implementing an all-in Oracle environment. We are two months away from going live on Oracle’s Exadata database server. Our new JD Edwards enterprise servers are running on Oracle Enterprise Linux in an Oracle Virtual Machine farm, as are our Oracle Weblogic servers. We have become an all-Oracle shop, soup to nuts, with one throat to choke.”
Recent evidence suggests that it’s still cheaper to run EnterpriseOne on the IBM i server. A report commissioned by IBM last year suggests that running EnterpriseOne on IBM i gear cost from 34 to 51 percent less than running it on X64 hardware from Dell and the combination of Linux and the Oracle database, or Windows and SQL Server, respectively (see “JDE EnterpriseOne Costs Less on i OS Than Windows or Linux, ITG Says”).
In the end, Oracle is rightfully concerned that it’s supporting a competitor. That IBM made money on every Blue Stack deal had to stick hard in Ellison’s craw. Now that Oracle has cleared its throat, it’s ready to resume dictating terms to customers, and building its future all-in-one stack.
Don’t be surprised if Oracle’s IBM i-loving competitors make hay with this news. In particular, look for the third largest ERP maker, Infor–which recently hired former Oracle co-president Charles Phillips to be its new CEO–to tout its IBM i bona fides as a way to sway true blue EnterpriseOne customers away from the red empire.
This article has been corrected. Oracle’s decision to end sales and technical support for the Blue Stack does not mean that JD Edwards EnterpriseOne won’t be ‘allowed’ to run their ERP system on IBM platforms and middleware, including IBM i, as the story originally stated. Also, Oracle will continue to provide technical support for the Blue Stack until September 30, 2016, not the end of 2016. IT Jungle regrets the errors.