JD Edwards Solution Edition Fights Oracle

November 7, 2011 Dan Burger

David Ziolkowski has a unique view of the IBM i installed base. He works almost exclusively with companies running the JD Edwards ERP software. His employer, Sirius Computer Solutions, is IBM‘s largest business partner in the reseller channel. His clients are deeply entrenched in their IBM i environments, but because of Oracle‘s ownership of JD Edwards, they are caught in the crossfire of two competitors trying to some extent to be cooperative.

To hear Ziolkowski tell it, Oracle’s chances of making inroads to the IBM i users he works with are slim. His confidence is rooted in a handful of reasons beginning with the JD Edwards Solution Edition of the Power7 system running IBM i. In 30 years of working in the IBM midrange market–15 of those at IBM and 15 with Sirius–there’s never been anything close to the price/performance package that’s now available, he says. On top of that, the incentives IBM is providing with the JDE Solution Edition are very attractive. Enough so to give the IBM i platform advantages it never had before.

On the larger of the two Solution Edition offerings, the Model 740, memory and processing power are 10 to 20 cents on the dollar compared to five years ago, he says. And with an entry-level server, the Model 720, that can compete with Windows and Linux boxes along with a free three-year hardware maintenance package, Ziolkowski’s customer base is happy to be rewarded for staying with the platform. Even on the smaller Model 720 Solution Edition, where user-based pricing is in effect, the pricing is about 30 cents on the dollar by the Sirius client representative’s reckoning. However, it’s the Model 740 Solution Edition that best suits most of Ziolkowski’s clients.

To a large degree, customer retention is Ziolkowski’s number one agenda item. He’s not often put in a situation of pitching IBM i to potentially new customers. But he does find himself in situations where customers are considering a move to another platform. In some of those cases Oracle is pushing the idea of running a Linux-based version of JDE on Intel servers with, of course, the Oracle database is. Customers get the one-throat-to-choke presentation.

“Yes, I think Oracle is motivated to get JD Edwards customers off of IBM i,” Ziolkowski says. “If they run on IBM i, they are not buying the Oracle database. The database is very profitable for Oracle. So the Oracle rep is going to tell them the IBM i is a horrible platform with a horrible database. But I am not seeing my customers bite on that worm very often.”

As expected from any IBM i evangelist, Ziolkowski has numerous stories about companies that have tried to move off the i and have ultimately decided to stay. ERP projects that didn’t go as planned are not too hard to find. You can watch and listen to Ziolkowski talk about companies reconsidering a move away from JDE on i on a video featured on YouTube.

In one such instance he mentioned to me, a customer (confidentiality agreements prevent company names being cited in many cases) embarked on the first phase of a migration off the IBM i platform only to find it was much more work than imagined. So the project went into the freezer for two years while the situation was reassessed. It came to light during the reassessment that Oracle database and the management of that database was going to be steeper than anticipated. The end result was an upgraded IBM i machine (database included rather than a separate purchase) running the newest version of JD Edwards.

Often what occurs too late to prevent wasted time and expense is an underestimation of the enormity of an ERP migration project.

“A lot of companies are looking at a huge expense to migrate to a new ERP system. It’s not something you want to change if you don’t have to,” Ziolkowski notes. “Many have home-grown systems that are old create a desire to switch products. But it’s difficult to rip and replace ERP. For one thing, many Edwards shops have so much third-party or home grown add-ons that are platform specific. Sometimes it’s even difficult to go from an old version of Edwards to a new one. Moving to the Oracle database is not getting much traction. People realize how devastating a platform change can be.”

For a lot of companies that are deeply invested in a platform, this is the reality of the situation. As hardware lease agreements reach their typically three-year or four-year conclusion, IT management is looking at options.

Ziolkowski’s customers are primarily the largest, most well-established JDE on IBM i shops in the state of Wisconsin, where loyalty to Big Blue is arguably a bit stronger than what is found on either coast. But mergers and acquisitions have a way of changing the playing field almost overnight. These are changes that can play havoc with IT departments. The IBM i community has taken some hits in this way. There’s no such thing as total immunity.

When a company is considering a plan to get off an IBM i platform and run JD Edwards on Linux or Solaris using the Oracle database, Ziolkowski makes sure management understands the challenges and the costs, particularly why the JDE on i option is likely to be less expensive than anticipated because of the Solution Editions.

“I am proactive in helping customers understand there is no need to get off the i to get Intel-like pricing,” he says.

Many companies can cut their costs considerably by staying on IBM i, but often they don’t. The reason is the purchase of new capabilities.

Companies are expanding their requirements. And even when the cost of the hardware lease and software license is reduced as with the Solution Editions, the savings frequently get taken up by additional purchases. Ziolkowski points to such things as replacing RAID with mirroring and buying a high availability backup server as two areas that companies address with the savings the Solution Editions bring.

One topic that has to be included in any conversation about the move to Power7 iron is the requirement that an operating system upgrade comes with that. For some organizations that can be a deal-breaker. Those most commonly hindered by the jump to IBM i 6.1 or 7.1 are companies with highly customized software. JD Edwards users almost always fit that description. The road to program conversions–necessary when upgrading to 6.1 or 7.1 from V5R4 or earlier versions of the OS–is littered with mistakes. Most often these are caused by poor preparation, which in turn is caused by schedules too crowded to allow proper preparation.

I asked Ziolkowski if program conversion stood in the way of a significant number of organizations that would otherwise move to Power7. He acknowledged that some of his accounts say they haven’t had the time to do all the testing and retrofitting to get ready for i 6.1 and 7.1. He wouldn’t provide an estimate, but when i suggested it was as high as 25 percent, he said that was too high.

For the sake of conversation, let’s call it 20 percent. That’s one out of every five JDE customers running on IBM i who are holding back on the upgrade. Of course there are no expectations that all Edwards users would be on the upgrade path by now, but Ziolkowski’s group is pretty much the cream of the crop.

Because of the slow progress in upgrades requiring program conversions, IBM has extended support for V5R4. It seems reasonable to believe that if 20 percent of the top JDE users were balking that could have been an indicator to IBM that V5R4 support was in need of an extension. And I also have to wonder aloud whether Power7 systems should have been compatible with the V5 versions of the OS.

The Power7 chip and its systems, particularly the Solution Editions, have been a powerful lure, but without this constraint it could be doing even better. There isn’t a similar constraint on the AIX side, by the way.

Aside from that splinter in the finger, it appears JDE users are pretty pleased with the Solution Edition offerings, at least if you’re willing to use the Wisconsin subset as a yardstick for the bigger picture.

It also appears as though the Solution Edition approach has been successful in keeping the wolf (Oracle) from threatening the flock to any great degree.