It's an old approach revised for new competition. The idea is to increase sales by offering everything from an operating system to database software and business applications. IBM has for years followed that model, selling everything from hardware to software and services to put all of the pieces together. More recently Microsoft has sought to offer one-stop shopping for software buyers, as have Oracle and SAP.
It's a switch from just a few years ago, when the software industry's "best-of-breed" notion was all the rage. Back then, companies were advised to assemble an "all-star" lineup of products from category leaders, picking and choosing the best products based on features, no matter which company wrote the software.
But shifting economics, industry consolidation and dwindling profits have changed that. Now, big software companies, hoping to keep a greater share of software profits, are building and marketing comprehensive product stacks.
Just this week, Oracle CEO Larry Ellison told the Financial Times that he would "like to have a complete stack." Oracle makes billions of dollars selling databases and business applications. In recent years, the company has bought up many other companies, including rivals like PeopleSoft and Siebel Systems.
"We're missing an operating system. You could argue that it makes a lot of sense for us to look at distributing and supporting Linux," Ellison told the newspaper.
Red Hat's acquisition of JBoss added an open-source wrinkle to an ongoing competition among companies to build all-encompassing product lineups. The company now offers a broader range of big-system software.
So why the newfound love for the stack sell? By offering a broad product set, software companies can maximise revenue from existing customers and maintain control over product development. Customers get "one throat to choke" for product support and better integration -- long the bane of big companies attempting to assemble their IT departments from a hodgepodge of components.
The strategy makes perfect sense -- for the software companies. "This is all about control," said Forrester Research analyst John Rymer. "Oracle will sell you an all-you-can-eat licence...then capture the maintenance revenue -- which is almost pure profit--and then you got access to the customer for up-selling and all the growth potential."
Following a multibillion-dollar buying spree, Oracle has assembled a wide range of applications to complement its giant database business and growing middleware line.
Microsoft, IBM and SAP have similar stack strategies. Microsoft covers the broadest ground in terms of products, while IBM and SAP, like Oracle, have some holes.
How software makers stack up
Business Apps
Middleware
Database
Manage- ment
Operating System
Oracle
Fusion Apps
Fusion Middleware
Oracle 10g
Enterprise Manager
Microsoft
Dynamics
Windows Server System
SQL Server
Systems Center
Windows
IBM
WebSphere
DB2
Tivoli
Unix, mainframe, others
SAP
MySAP suite
NetWeaver
Hewlett-Packard
OpenView
HP-UX
Sun Microsytems
Java Enterprise System
PostgreSQL (support)
Solaris
BEA Systems
WebLogic
Red Hat
JBoss
Red Hat Linux
Novell
ZenWorks
NetWare, SUSE Linux
Meanwhile, hosted software providers are pursuing a similar strategy tuned for the online world. But don't use the word "stack," said Salesforce.com CEO Marc Benioff. "The concept of a stack is outdated. Unless of course you work for a stack company," Benioff wrote in an e-mail to ZDNet Australia sister site CNET News.com.
Salesforce.com is looking to drive revenue from third-party products that run on its AppExchange "platform" for building and running hosted applications, according to company executives.
