Oracle returns fire after Gartner report

Oracle fired back in the war of written words with research firm Gartner, which issued a report last week critical of the database software maker.

Oracle on Monday posted an article on its Web site accusing Gartner of releasing a "provocative and biased" profile of the Redwood Shores, Calif., company. Oracle also said in the article that Gartner released a marketing piece "disguised as research" to promote other Gartner research reports and consulting services.

"We are certainly standing behind the report," Gartner spokeswoman Carol Wallace said. "We see this (criticism) as a natural part of the dialogue that happens between vendors and Gartner. Sometimes they like what we write about them and sometimes they don't."

The Gartner report, titled "Oracle Under Fire," rates the company "positively overall," but draws attention to what it calls "significant missteps" that are exposing weaknesses in the company's products, services and business practices.

Among the issues raised in the report prepared by Gartner analyst Betsy Burton was the fact that Oracle's database revenue growth was 6 percent in the third quarter, but down by 5 percent in the fourth quarter, indicating a slowing adoption rate.

The report also notes that the adoption of Oracle 11i enterprise resource planning applications has been slow largely because of product stability issues. The report went on to criticize the company's decision not to support the OAUG (Oracle Applications Users Group), an organization run by Oracle customers.

Oracle said in its article that the report tells only part of the story and has several misconceptions.

"It's significant to note that (the third quarter) saw the biggest slowdown in the database market since 1992," Oracle said in response to declining database revenue figures. "To single out Oracle's performance only for (the third quarter) without looking at how other vendors fared in the market is to fail to look at the whole picture."

Oracle also said it has not had any problems with its user group, adding that an earlier disagreement with the OAUG board had been resolved.

The Gartner report is available free on its Web site but Oracle said the consultancy pushes its other services in the study.

"The report even goes so far as to request that readers contact Gartner if they are considering an Oracle purchase," Oracle's article stated.

Oracle said in the article that it sees the recent report as being consistent with Stamford, Conn.-based Gartner's continued bias against the company.

"Sometimes (companies) might see it as bias while we see it as independence," Wallace said in response to the charge.

Wallace said Gartner does not keep track of how many times companies receive positive or negative ratings. She said Gartner's goal is to maintain an independence from the companies they review.

"Only 20 percent of our clients are vendors while 80 percent are users, which is important for maintaining independence," she said.

Oracle faces stiff competition in the database market from IBM and Microsoft, which have sold their database software at lower prices.

To pump up sales of databases and application servers, Oracle earlier this summer shipped its new 9i database and application server software, and announced a new pricing plan to be more competitive with its rivals.

Oracle competes against BEA Systems, IBM, Sun Microsystems and Hewlett-Packard in the market for application servers. In the $1.6 billion application server market, BEA ranks first with 35 percent market share, followed by IBM with 30 percent.

Oracle also competes against business software companies such as SAP, Siebel Systems and PeopleSoft with its 11i e-business suite, an all-in-one software package that companies use to manage everything from sales and marketing to finances and human resources.