Madison Avenue ooops . . . make that Gartner, names Oracle as a leader in supply chain planning

Posted on January 7, 2011


The company was founded in 1979 by Gideon Gartner.  Originally a private company, the Gartner Group was launched publicly in the 1980s, then acquired by Saatchi & Saatchi, a London-based advertising agency, and then acquired in 1990 by some of its executives, with funding from Bain Capital and Dun & Bradstreet.  In 2001 the name was simplified to Gartner.

Source: Wikipedia

Step right up ladies and gentleman as I dazzle you with the amazing wonder tool!  It slices, it dices and if you select our bonus easy upgrade (which costs 10 times more than what you paid for the wonder tool itself) it will even walk the dog!!!!!

If you believe that, then I have another one for you . . .

“The technology giant, Oracle Corp., was recently named a leader in supply chain planning for its commitment to a streamlined approach to its logistics and supply chain, especially in regards to its technology operations . . . according to Gartner, the Magic Quadrant assesses vendors within a particular sector based on their “completeness of vision and ability to execute” supply chain plans.”

Gee, I wonder what the Veterans Health Administration would have to say about this?

In the past, whenever I read such dribble I would always wonder what flavor of Kool-Aid the Stamford, Connecticut company who is purportedly “an information technology research and advisory firm,” who provides “technology related insight” was pushing . . . or perhaps drinking themselves.

After all, and based on feedback over the past few years from those who have attended my conferences, the validity of Gartner, Aberdeen and the likes findings have often been received with growing cynicism.  I mean how can you talk about a completeness of vision and an ability to execute in light of the high rate of initiative failures?

Then finally, and I apologize for being so slow on the uptake dear readers, it hit me . . . first being acquired by UK-based advertising (that’s right advertising) firm Saatchi & Saatchi, and then by some of its executives its clear – Gartner is more Madison Avenue than Research Triangle Park!  This means that their job, as one former Gartner prospect put it, isn’t to inform but to write creative copy for their clients.

Gartner operates under the illusion of providing unbiased insight, when in reality, and through their creative use of Gatrnerisms such as “hype cycles” (if this isn’t advertising lingo nothing is), the firm’s interest is clearly aligned with advising their client’s – and I am not talking about end-user clients here, on how to position themselves to succeed in the market.

Here is an added piece of information, the Saatchi & Saatchi executives who ultimately acquired Gartner were funded by both Bain Capital LLC and Dun & Bradstreet.  Why is this relevant you ask?  Well Bain Capital LLC was founded in 1984 by the partners from Bain & Company, which is a global management consulting firm in Boston.  If you visit the Bain & Company website, you will discover that listed as one of their many capabilities is  . . . Cost & Supply Chain Management!  Hmmmm . . . I wonder if Bain & Company consultants have ever worked with Oracle?

After all, the Bain & Company website does indicate that they “identify the opportunities, quantify the potential, then help develop detailed solutions and implementation plans, and manage the implementation” of cost and supply chain management programs.  In fact, the Bain website states their belief that it is important to “take advantage of emerging technologies,” and that they offer “objective advice, focusing on the biggest levers of value that will deliver the fastest improvements.”  I wonder if Oracle has ever been part of that equation?

But has there been any direct collaboration between the two companies?

Well, in December 2001, The Bain/Oracle E-Business Impact Project was released in which Bain & Company, Inc. collaborated with Oracle Corporation to study Oracle‘s e-business transformation.  The intent was to better understand the approach and implications of Oracle‘s e-business success story in order to study its application with other companies.  So there is a history there.

Let’s see if I have this right . . . Gartner sings the praises of Oracle, who like the majority of ERP vendors has an atrocious track record when it comes to successful implementations.  So why would Gartner do it?

As we have already covered, Gartner is owned by former advertising industry executives (I wonder what they know about technology) whose acquisition was funded by Bain Capital LLC – which was founded by the partners of management consulting firm Bain & Company, who perhaps has or had a working relationship with Oracle.  Okay, maybe there is something there that a favorable review by Gartner would benefit Bain & Company in terms of an Oracle relationship?

Wait a minute, and perhaps if we are going to go Oliver Stone level conspiracy theory here, I remember a line from the movie All The Presidents Men when Deep Throat made the statement “follow the money.”

Looking at Bain Capital LLC a little closer, they are an equity investment firm with a massive portfolio in which it manages $65 billion in assets.  Huh?  One of its Managing Directors Scott Friend was Chairman of the Executive Advisory Board and VP of Marketing & Science for Oracle Retail.  A possible money connection between Bain Capital and Oracle?

According to a June 2009 Wall Street Journal table titled “Oracle Grows With Acquisitions,” Bain Capital LLC was the seller in the Oracle acquisition of Thor Technologies International Inc., and again on August 2nd in 2005 when they were the seller in Oracle’s purchase of Context Media, Inc.

Then when you visit the Bain Capital Ventures Innovation Center, you discover that one of the case studies involved the sale of ProfitLogic, which is/was an enterprise software company that develops decision support software for retailers.  Oracle acquired the company in 2005 and, according to Scott Friend, the former CEO of ProfitLogic “When I was looking for a venture firm, Bain Capital Ventures provided unprecedented resources and access to top notch customers. I lived it — with five great venture firms invested in ProfitLogic – but none could compare to Bain Capital Ventures ability to move the needle for our business.”

Wait a minute, isn’t one of Bain Capital’s Managing Directors also named Scott Friend.  Let me check that bio . . . hey, it is one in the same person!  I am beginning to see a picture taking shape here in that Bain funds the acquisition of Gartner to promote Oracle so that Oracle can in turn continue to buy companies from Bain.

So how long has this Bain/Oracle financial exchange been going and, how close are these two acquisition fueled friends?

According to an April 24th, 2000 PR Newswire, Netfish Technologies, Inc., a leader in XML-based business-to-business e-commerce solutions at the time, announced it had completed a $30 million mezzanine round of equity financing with a group of investors led by Bain Capital, Inc. and surprise, surprise . . . Oracle Corporation!

That’s it!  Oracle isn’t really in the Enterprise Software business, they are in the Merger and Acquisition business!  No wonder they stink in terms of successfully implementing ERP-based solutions!  That isn’t their core competency.  Buying market share and driving share value is their specialty including funding Larry Ellison’s lifestyle.  In short, the only Fusion that the Redwood, California firm is focused upon are the numbers on their own balance sheet.

So in this context folks, the answer as to why Gartner gives accolades to companies who quite frankly couldn’t install a light bulb without going over budget is because they are a PR Firm.

By the way, another investment firm that was involved in the NetFish deal was Whitney & Co.  I wonder what if any relationship exists between Oracle and that group . . . maybe Adam Cohn would know?  But that’s a story for another day.


Posted in: Commentary