Oracle buys Sun: so did the Earth move for you?

Larry Ellison's Oracle has spent $7.4bn buying Sun Microsystems.  It's no secret that Sun has been up for sale for a while with IBM the initial suitor.  Now Oracle has done the deed and the world has changed.

How will this affect those of us in direct marketing?

Firstly, Sun Solaris is the preferred operating system for Oracle - so no surprise that there was interest on that front.  Oracle now have the ability to produce "appliances" that combine ideal software and hardware combinations and that could be a major push for against Microsoft for scalable solutions. 

Ellison quoted Solaris and the programming language Java as the primary drivers for the deal.

Java is the programming language behind many developments, and importantly for marketers behind many web sites.  Currently Java is open-source and that means free - Oracle aren't well known for selling free software so it is an open questions as to whether they may start charging for it in future - that would certainly change the dynamics a bit. 

The other common technology for web site creation is ASP.NET from Microsoft - if you want to run that software you are forced down the Microsoft track, needing their operating system and Internet Information Server to produce web sites.  Java's big selling point has always been that you can run software written using it on many different operating systems including those produced by Microsoft, if Oracle were to change this it might forced many people off Microsoft and onto an Oracle owned platform - there would certainly be commercial drivers for this, but perhaps a little far fetched in the near term.

Sun have been the bastion of the open source community - they were keen to sell their hardware and provide powerful software effectively for free.

Oracle are now the proud owners of Star Office, the only real open source competitor to Microsoft's Office range - not something mentioned in dispatches, but surely a platform for further encroaching into Microsoft's domination of the desktop.

For me the most important "unmentioned" part of the acquisition is MySQL - bought by Sun a little over a year ago for $1bn, but previously a target of Oracle who at one point offered $850m for the open source database that has 11m installations worldwide.  Oracle have a problem getting into the mid market with their highly performant and complex database offering - MySQL could be the foundation of a new push from Oracle. 

Currently SQL Server from Microsoft is the commercial database that most easily fits the mid market space and Microsoft have been successsful in finding in roads into the back office using it. 

MySQL gives Oracle the chance of competing in this coveted space and may perhaps create a commercial product from the source code.  Currently MySQL only generates about $60m in support revenues,

A commercial Oracle driven database in the mid market space would open up lots of possibilities for direct marketers wanting to build robust, scalable marketing databases and would really open the market to competition.  Currently many organisations cannot afford the high costs of Oracle licenses and are forced to choose other routes.

When the MySQL purchase completed there were rumours that Oracle money was behind the financing - so perhaps this downplayed part of the deal is actually more important that it looks.

There's plenty of comment out there, so if you want to read more try out this article on the tech fall out or this analysis on mycustomer.com

US marketers set to spend less money online

It appears that the downturn is affecting spending on the web.  Some people had believed that on line advertising was going to be recession proof but latest results indicate that this is not the case..

While online spending is still likely to perform better than many other marketing areas, there are indications that the years of growth are set to turn into a period of decline.

The hardest hit area is apparently going to be display advertisments on web sites while search, where costs are largely driven by clicks rather than impressions, is predicted to hold up better.

Clearly behavioral targeting offers marketers an opportunity to more easily target their display ad spending, but this technology is currently under pressure from privacy groups and political pressure.

Brian Quinton has more information and figures on his blog.

Marketers aren't any smarter now than Mad Men's Don Draper

On the Forrester blog for product management and product marketing, Tom Grant examines the recent trends in marketing and concludes with the following paragraph:

The marketing acumen of yesterday...today!

Product marketers today should not be congratulating themselves on how much smarter they are than the Don Drapers of some mythic marketing past. Instead, we should take a humbler view of how the marketing discipline adapts to current exigencies. That perspective makes it easier to understand why some traditional elements of the marketing mix, such as direct mail, haven't withered in the light of social media.

It seems to shock some new marketers that the traditional channels like direct mail continue to be an important part of the marketing mix.

Perhaps this is due to the wide audience for products with some of the older generation not being the "on-line" connected kiddies that have taken social networking to heart.

I'm not sure that's it though. Different channels have ways of addressing an audience when they are in different moods and while the brand message is now open for discussion on the web the brand image does still need to be promoted with consistency and clarity.

Consumers identify with brands, certainly that brand identity is up for grabs on blogging sites today, but the initial seed still needs to be put out there.

Certain industries are not going to be able to use social computing in the same way and their on line activities may be limited to Google AdWords while still needing to talk to an audience whose first instinct is not to type a search string into Yahoo or the like.

In the rush for the new, we should ensure that we don't ignore other important ways of promoting our brands.

Twitter hit by advertorial scandal

Over Easter popular micro bloggig site Twitter was hit by a scandal.  A number of popular twitterers were exposed as tweeting for profit. 

You might not think that this is the same thing as "cash for questions" but avid social networking fans are outraged when corporations try to muscle in on the action and throw their cash about.

The backlash has hit some large brands like Apple and Sony, even though they weren't directly involved in soliciting tweets for profit - this just goes to show that the rules of the game are changing, especially when it comes to community created content.

Phorm blocked by Amazon

Web tracking service Phorm has been officially blocked from scanning Amazon web pages according to a news story from the BBC.

The controversial service being trialed by BT scans keywords on the web pages visited by browsers by analysing data at the ISP, this information is then used to serve adverts.

While this is technically legal a lot of controversy still exists over how users should sign up for the service and there is significant indignation about the invasion of privacy caused by such indiscriminate tracking.

My earlier post gives details on the FTC ruling on hehavioural targeting in the states, while the European courts are discussing the possibility of regulating the storage of cookies in browsers, more details on that from Patricio Robles.

All in all it looks like the privacy pressures are coming at the Behavioural Targeting industry from every side.

Marketers Focus Technology Spending on Hosted Solutions and SaaS

Alterian's financial year ended on the 31st of March so I've been spending the last few days reviewing the trends in the business over the past 12 months.  It's been a turbulent ride for some marketing technology vendors with a significant series of bumps in the road especially towards the end of the calendar year 2008 in North America; although there has been a surge in interest during the first quarter of 2009 as people start to focus their marketing activities on retaining existing good customers and making use of cost effective channels. 

There is a significant downward trend in license sales for software companies that rely on high cost perpetual licenses with many in of the businesses in that sector finding their sales falling off the proverbial cliff.  Software installed on site typically has a large services element alongside it and represents significant investment ahead of returns.  So the theme for marketers appears to be out with CAPEX and in with OPEX.  Hosted solutions and software as a service are definitely coming to the fore, such solutions offer marketing departments the ability to get the software and solutions that they need without having to go cap in hand to the finance director for a large up front fee.  Such solutions mitigate risk while frequently providing high quality solutions delivered for a fraction of the cost and put in place far quicker than traditional packages.

Measurability and accountability have been key factors driving sales in the last 3 months, with direct marketing, email DM and web sites being areas where we have seen new investment.  Making email a strategic channel was the subject of an earlier post of mine on this site and I see a set of key skills for brands to develop in order to maximise the advantages of the newer channels. 

It's high time agencies started thinking of strategies that leverage the new channels' abilities for personalisation and one-to-one contact. There is a new type of agency appearing in the US market that is a hybrid of the traditional brand agency and the marketing service provider, this type of agency uses an understanding of the creative direction, the analytical approach and the enabling technologies to create a new type of customer engagement strategy. Indeed Engagement has recently become the watchword for enabling the multi-channel communication and individualized experience that consumers are now demanding.  Denise Shiffman's Age Of Engage blog provides some interesting insights into this new approach and is well worth a look as is her book. 

So my summary of recent market trends:

• Focus on SaaS and hosted solutions using OPEX not CAPEX
• Increased use of measurable channels like Direct Mail and email
• Exploitation of digital channels to become more relevant and engaging by personalization
• Requirement rather than desire for quick implementations and quick wins
• New focus on Customer Engagement