Database Business Problems at Oracle?

abb_road writes "Wall Street responded to yesterday's report of a 42% rise in profits by pushing Oracle's stock down. Despite a 77% increase in applications business, investors are worried that Oracle's core database business remains comparatively stagnant. Though Ellison claims that the DB business will grow in double digits over the next few years, it seems that more companies are switching to open source rather than paying Oracle $40,000 a processor."

Comments

Open Source vs. Oracle

[E. Edward Grey]

Well, you could switch to an open source database, and then hire all kinds of brainpower to understand how it works, keep updated on the development, institute updates constantly, search high and low to find someone who can solve the problem that apparently only your company is having... ...or, you could do the exact same thing with Oracle, plus forty large per processor. This decision isn't that hard to make.

It's about sales, not technology or open source

[yog]

The poster asserts that:

...it seems that more companies are switching to open source rather than paying Oracle $40,000 a processor.

...and provides exactly one example. It's clear that a little more analysis is needed to back up this claim. A more credible statement might be that companies are choosing either open source databases or lower priced Microsoft and IBM alternatives. DB2 from IBM is actually a lot cheaper per CPU than Oracle's dbms; a former employer of mine had decided to go with DB2 (before the company went under) because it was a fraction of Oracle's $250,000 price for a relatively small system.

On the other hand, Oracle has been very generous in allowing developer downloads of their DBMS; I was able to take their Linux port, install it on an old box running Red Hat, and port a Microsoft SQL Server-based back end over to Oracle in a couple of days just as an experiment. Obviously, to actually use the product would cost some bucks but this kind of flexibility is what helps keep Oracle's tentacles in so many businesses.

The other thing that the analysts ignored is that the database and enterprise software business isn't so much about having innovative technology, contrary to what was asserted in the Business Week article but rather having an effective sales organization. DBMS and enterprise management software is sales driven, not innovation driven. Executives don't watch commercials about sexy features in the latest rev of Oracle or Sql Server, then order a few copies from Amazon. It's the inside sales teams that patiently build relationships over the years. IBM knows this, Oracle knows this, and MS knows it too. Sybase tried but their hubris and arrogance brought them down. (direct personal experience with that!)

No doubt, while Larry crows about upcoming tech innovations, he's internally yelling at the sales teams to get more aggressive, offer more discounts, and steal more customers from Bill and from the SAP people. He'll eke out a few more percentage points of market share, and the investors will be satisfied for a couple more quarters. That's how the business works. ;)

$40K/CPU is BS

[bloobamator]

$40K/CPU is full-boat retail. Anyone who pays full retail for Oracle licenses gets what they deserve. With only a little negotiation, you can get Oracle to come down 45% off retail. Or go to some vendor like CDW (I do not work for CDW), and they'll get you a nice discount.

And if you're negotiating with Oracle directly, something I do not recommend, then all you have to do is mention mySQL or PostgreSQL, and Oracle will drop their prices.