Sun Microsystems Inc. and Oracle Corp. have a new whipping boy. In the past, both technology companies seized every opportunity to attack software giant Microsoft Corp. Lately, however, they have shifted focus to a company that has re-appeared at the top of the technology heap: IBM Corp.
Both Sun and Oracle are currently running aggressive print advertising campaigns targeting IBM and its approach to e-business. "We’re definitely picking on IBM," said Mark Jarvis, Oracle’s senior VP and chief marketing officer.
The messages of these campaigns bring into relief the current tech sector landscape, where customers are asked to choose between two paths: the single-vendor approach offered by Sun and Oracle, or the consulting and multi-vendor packages offered by IBM.
Finding a new target
Sun and Oracle headed the cheerleading section in the U.S. Justice Department’s antitrust lawsuit against Microsoft. Although settlement of that suit won’t break up Microsoft, the action distracted the company enough that Sun and Oracle felt they no longer needed to focus their efforts on the Redmond, Wash.-based behemoth.
Certainly, Sun and Oracle take advantage of opportunities to carp at Microsoft in the press, but those potshots don’t cost the companies a dime. When they are paying for the message, as both companies are doing with their ads in Fortune and other business and IT publications, the target now is IBM.
Sun goes head-to-head with IBM primarily in mid-range enterprise servers but also in operating systems. In one ad, Sun gets right to the point with the headline, "If you ask IBM, e-business is complicated and hard. So don’t ask them." The visual features a man, presumably an information technology professional, on his hands and knees searching through a tangle of computer wiring.
In another execution, the headline asks, "Do you have the Big Blues over your IT infrastructure?" The visual shows a blue-suited man using a vacuum cleaner to suck dollar bills from a customer’s pockets.
Both ads feature similar body copy trumpeting Sun’s "one-chip architecture and single operating environment, so you can scale from under-$1,000 desktop systems to over-$10 million data center systems without breaking a sweat (something you won’t find at IBM)."
JWT & Tonic, San Francisco, created the ads. Both the agency and Sun refused to comment for this story.
Oracle’s Jarvis, on the other hand, couldn’t wait to throw some verbal punches at IBM, which competes with Oracle primarily in database software.
"They’re making wild and inaccurate claims, and it’s important that the public know the truth," said Jarvis, who contends that IBM’s claim to be less expensive than Oracle is false. (IBM officials declined to comment for this story).
Oracle’s ads, which were created in-house and produced by Grey Worldwide, directly attack IBM. One ad uses the headline: "What’s the fastest database on IBM’s fastest computer?" to point out that an IBM press release indicated that the answer is Oracle and not IBM’s DB2. Another ad says that Oracle has 14 international security certifications, while "IBM DB2 has none."
Shedding dot-com connection
With their current anti-IBM ad campaigns, both Sun and Oracle are attempting to adjust to the post-Web-frenzy environment. Recently, Sun abandoned its "dot in dot-com" tagline for "take it to the nth." The previous tagline tied the company directly to the dot-com boom.
"You can’t say it was a mistake," said Daryl Plummer, a group VP at Gartner Group. "Sun benefited greatly [from the dot-com boom]. It was a smart thing to do."
But as Sun was aligning itself with dot-coms, IBM was already blanketing television and other media with ads promoting the concept of e-business. IBM later supported this effort with a print campaign promoting its global services division. The combined result of the two campaigns was to present e-business as an essential and complex enterprise, as well as an arena in which IBM had tremendous experience and expertise.
In the long run, IBM’s marketing approach has proved to be the more enduring strategy. Sun was tied to the dot-coms, now a discredited sector. Meanwhile, IBM was tied to e-business in a general sense, which included not only dot-coms but also traditional companies looking to integrate the Web into their existing structure.
"There are four entry points into e-business," Plummer said. "One is the new financial and business model of dot-com, which collapsed. The second is customer relationship management (CRM). The third is e-commerce. And the fourth is efficiency, the idea that e-business can help companies become more effective. IBM came at this thing from all four directions; Sun got associated with the dot-coms."
In order to tell the market that it is not simply a company that serves the e-business needs of dot-com companies, Sun has adopted its current campaign attacking IBM. By presenting itself as an alternative—the anti-IBM, in a sense—Sun is also telling its prospects that it competes with IBM and can provide e-business solutions for old-line companies. Sun, of course, always offered this capability; now, the company is simply making it as clear as possible to the marketplace.
In addition, the Sun campaign gives a reason for customers to choose the company over IBM, reinforcing a widely held perception that IBM is expensive and difficult to do business with. "They’ve taken a broadly held perception of IBM and incorporated it into a campaign that is focused and closely targeted," said Giga Information Group analyst Rob Enderle.
Adjusting the message
Like Sun, Oracle adopted a new tagline at the height of the dot-com bubble: "Oracle software powers the Internet." Unlike Sun, however, Oracle has retained its tagline. But the company has adjusted its advertising in light of IBM’s message over the past several years.
Oracle disputes that IBM should be considered the industry leader. In TV and print ads that responded to IBM’s e-business marketing efforts, Oracle pointed out that nine of the Fortune 10 ran its software.
The only company that didn’t? IBM, of course.
The point of these ads, Jarvis said, was that Oracle deserved the title of e-business champion.
"We used the campaign to say that IBM may have told you about e-business, but we’re the ones everyone is doing it with," he said.
In the past four months, the ads have become more aggressive, with Oracle attacking IBM more directly.
Oracle and Sun may have a new whipping boy in IBM, but so far they are the ones taking the whipping. Oracle recently issued a profit warning, and its stock was recently trading at 58% below its 52-week high. Similarly, Sun announced large-scale layoffs, and its stock was trading at 72% below its 52-week high.
Meanwhile, in the second quarter of 2001, IBM’s worldwide server shipments grew 10.4% compared with the same period the previous year, according to Gartner. In the same period, Sun’s shipments declined 15.4%. Additionally, IBM’s stock price has remained fairly steady, recently trading just 5% below its 52-week high.
"Certainly IBM is better positioned in terms of its customer base," Plummer said. To gain business in this down economy, analysts believe companies will have to take business away from competitors to grow. Whether the anti-IBM ad campaigns can help Sun and Oracle do that remains to be seen.