The end of comity in IT

Comity (noun):

1. A state or atmosphere of courtesy, considerate behavior, and mutual respect towards others; harmonious relations.
2. Friendly understanding and mutual recognition between entities such as corporations, organizations, and nations.
3. Something increasingly scarce in the IT industry.

IT started as a vertically integrated industry. Companies like DEC and IBM built almost everything from CPUs to application software themselves. But the last 30 years moved IT to a "horizontal" business model. Most vendors built components that would be later integrated by systems vendors, implementation partners, or customers themselves into "the complete solution." The rise of networking and "industry standards" meant that customers started expecting everything they bought to work increasingly well together.

Economically, "horizontal integration" worked stunningly well. Companies like Cisco, EMC, Intel, Microsoft, Oracle, and SAP each rose from component providers into titans. They grew and grew, then grew some more. After owning large swaths of their original turfs, they expanded eagerly into adjacent product areas. They expanded so much they bumped into each other's areas. Coopetition became the rule of the road. They'd cooperate on a lot of areas, even while competing in others.But eventually they grew so big they couldn't remain out of each other's patches at all, nor out of those of systems companies like Dell, Hewlett-Packard, and IBM they've long depended on as routes to market. And so wholesale encroachment began. Cisco and Oracle entered the server business. EMC got into data management. HP ramped into networking. Et cetera. Some of these shifts happened gradually and by degrees, but by 2009 they were happening in large, chaotic chunks. Once-warm alliances between various players frayed and frazzled first into a cold peace, then into a cold war. Now it's becoming a hot war.

Exhibit "A" is how Oracle announced it was stopping development for Intel's Itanium processor--the lion's share of which are sold by HP as part of its Integrity server line. HP and Oracle used to be the best of friends and business partners. You can still read about their putative alliance, but it's nothing like the warm, happy place it once was. In 2009, Oracle bought Sun Microsystems, HP's direct competitor, to further its ambitions of having customers buy "the complete stack"--from systems and storage through middleware and application software--from Oracle. In gamer lingo, "All your base are belong to us."

A significant portion of HP's enterprise business depends on Oracle software, especially its database engine. Oracle full well knows that--yet HP doesn't seem to have been given even the minimal courtesy of a heads up before Oracle declared it will stop all software development for Intel Itanium microprocessor--including the jab "Intel management made it clear that...Itanium was nearing the end of its life." By "stops all development," they really mean "all." It's not just "no major new versions," but "not even the next dot release." This, despite recently calling HP a "key strategic partner," their thousands of joint accounts, and HP itself being one of Oracle's largest global CRM customers. In Internet parlance, Oracle just defriended HP--and it made sure to do so in the most abrupt and painful way possible.

Related links
• Oracle declares Intel's Itanium dead

Both Oracle and HP have vowed to support their customers, of course. And we've not heard the last of this. It's entirely possible that the parties will kiss and make up--or at least come to some practical arrangement and hug awkwardly. Anything's possible. But the pattern? Expect to see this kind of behavior again.

The vendors are simply too large, too powerful, too few, and too ambitious for relationships and cross-support agreements to not break down. This is extremely troubling for customers. Cooperation and comity are the linchpins of a horizontally integrated industry. Without them, all the assumptions enterprises have made about "this stuff will work together" and "the investments we make in your joint solutions will continue to be relevant, updated, and supported in the years to come"--all those assumptions become faulty and dangerous.

HP may not be Oracle's only erstwhile partner. What about Oracle running on IBM's Power Systems? Oracle running on Red Hat Enterprise Linux? Oracle running on Dell or Fujitsu gear? Are those at risk next? It's certainly possible. Oracle CEO Larry Ellison has described the mainframe era and model in glowing terms; if he's hell-bent on going there, and on pulling customers into Oracle's "full stack" fold, then Oracle's traditional commitment to heterogeneous multi-vendor support goes by the wayside. If I were an Oracle customer running on any non-Oracle hardware, I'd be asking for long-term support and software update assurances, in writing, with clear and enforceable penalties for non-performance. Verbal reassurances would no longer be sufficient.

You can very rationally argue that too much money is made on platform X or with partner Y, for a company like Oracle to stop doing business there. You could credibly argue that companies like Oracle have too many precious joint customers, accounting for too much revenue and profit, for such stoppages. But you probably could have made very similar arguments about Oracle supporting HP and Integrity servers, too. "That can never happen here" is like last month's assurances about the safety of the Fukushima Daiichi nuclear plants--arguments begging to be disproved as facts on the ground change.

And it's not just about Oracle. It won't be the only one tempted to play fast and loose with partner and customer investments. The oligarchs will continue to aggressively jump their former boundaries. They all want to be, if not providers of complete top-to-bottom IT stacks, certainly broad-based, inclusive providers. As the oligarchs get bigger, broader, and bolder, each will seek to grab as much revenue and account control possible. Naked power plays and once-unthinkable defriendings will continue. Purchase and partnership agreements need to be bulletproofed against such eventualities.

The re-verticalization of IT will continue to erode the expectation, requirement, and willingness of market-making providers to genuinely cooperate even with sometimes-competitors. The end of comity is here. For those affected, it won't be at all funny.