Re: tough choices

Daniel Morgan wrote:

>
>
> Anyone that doesn't negotiate prices on enterprise software is someone
> that would buy a car off the dealer's lot of the price listed in the
> newspaper. And probably shouldn't be allowed to have a DBA account.
>

Yes, it seems that some software sales reps learned from used car dealers:

San Jose Mercury News
Chris O'Brien, 06/22/04

Oracle salesman Tony Kender was competing with PeopleSoft and SAP for a client back in March 2002 when he fired off an e-mail to a supervisor with the subject line: ``How Dirty Can I Fight?''

Kender wanted to insert a slide into his presentation bashing his rivals and sought his boss's permission. ``This gives us the opportunity to perform a bit of a sneak attack,'' he wrote to his supervisor.

The boss, Bob Greene, wrote back: ``Remember, SAP is not the enemy, as much as you'll want to spank them. PeopleSoft is the enemy. Bury them. . .

``Now let me get back to my red meat breakfast.''

The e-mail exchange came to light during the Oracle antitrust trial in which the U.S. government is trying to block Oracle's $7.7 billion hostile takeover bid for rival PeopleSoft. It's a juicy example of how the first two weeks of the trial in San Francisco have provided a rare, behind-the-scenes look into the often vicious and high-stakes business of selling software to the world's largest businesses and governments. The revelations have added a note of drama to the normally arcane world of business software.

The testimony from customers and tech executives has provided intimate details about aggressive sales tactics by software suppliers -- in some cases attacking rivals and offering customers discounts close to 100 percent. And it has painted an often unflattering picture of suppliers and customers trying to manipulate each other over multimillion-dollar deals.

``It does bring out clearly that there is really cutthroat competition in this business,'' said Paul Hamerman, a vice president at Forrester Research. ``And these vendors pull out all the stops to win a deal.''

The Justice Department is trying to block Oracle's $7.7 billion hostile takeover bid for PeopleSoft, arguing it would reduce from three to two the number of companies that sell human resource and financial software to the largest customers. Oracle argues that the government has defined the market too narrowly and that customers have plenty of options.

On Monday, the government presented its third economic expert of the trial, Preston McAfee, a professor of the California Institute of Technology, who testified that if PeopleSoft were to disappear, prices for large business software customers would rise anywhere from 13 percent to 26 percent. ``Competition with PeopleSoft caused Oracle to lower its prices,'' McAfee said.

It's clear that in many cases, the Big 3 of business software -- SAP of Germany, PeopleSoft and Oracle -- compete against each other for a handful of customers.

Perhaps the most telling evidence of this competition are thousands of Oracle customer discount forms introduced by the Justice Department. When an Oracle salesperson wants to offer a significant discount, he or she must fill out forms seeking approval from bosses and detailing the nature of the deal and the competition.

When trying to sell Oracle's human resource software to Teradyne, an Oracle salesman wanted an 83 percent discount to win the deal. ``I am requesting a relatively deep discount given the level of desperation at [PeopleSoft], and the un-natural acts they are committing in the field,'' he wrote.

At GAF Materials, Oracle was again squaring off against PeopleSoft when a salesman requested approval for an 85 percent discount. PeopleSoft CEO Craig Conway was apparently trying to get the company to delay its purchase until June -- after the end of Oracle's fiscal year.

``We're in a head to head battle with PeopleSoft,'' the Oracle salesman wrote. ``Craig Conway is calling in to the account to try to delay the decision past 5/31, and have gotten ultra aggressive on the price and discount to win the business. . . . Oracle account team and [PeopleSoft] account team spent the entire day in the customer's office on 5/28 bidding and counterbidding against each other.''

For its part, Oracle turned up the pressure in March 2003 when its salespeople launched a ``PeopleSoft Attack'' campaign. Oracle even set up a ``PeopleSoft Competitive Help Desk'' for its salespeople to call and get advice on sales tactics.

In a 100-page PowerPoint presentation submitted as evidence in the trial, Oracle executives tried to give salespeople new ammunition to use against PeopleSoft. First, the presentation outlined what Oracle considered to be dirty tricks from PeopleSoft, such as handing out doctored analyst reports, negative references and hiring former Oracle managers and salespeople.

``PeopleSoft has no magical product, they have bugs, product deficiencies, demo disasters, resource and morale issues, account losses, and horror stories in the press to deal with,'' the presentation said. ``Just like we do.''

Oracle urged its salespeople to ``lay land mines and undermine PeopleSoft's credibility.''

They should try to create ``FUD'' -- fear, uncertainty and doubt -- about PeopleSoft's pricing and ``scare'' customers over its products' lack of functions....... Received on Tue Jun 22 2004 - 09:53:52 CDT