Oracle Sales Erode as Startups Embrace Free Software
bloomberg.com
bloomberg.com
I suspect the general idea is to spend huge amount of money to run incredibly inefficient SQL queries.
Their existing massive install base, aggressive salesforce, and being perceived as a "safe" choice by customers is a strong position to be in.
If you're an enterprise customer with IBM, Oracle, or Microsoft, you know that you can have someone onsite within 24 hours if you have a critical failure, sometimes even sooner. You know that you can have people engaged 24/7 for as long as it takes to get you back up and running and you'll have not just technical people, but also incident managers who will keep you updated and help the engineers locate additional resources. They'll have someone sit in a conference bridge around the clock if you want, ready to provide updates.
Enterprises are also thinking about long time spans. With IBM, Microsoft, Oracle, Redhat, and others, they generally guarantee at least 10 years of support for their products, plus the ability for custom agreements that go beyond their normal support dates. Offering 3+2 is a good start, but that's not long enough. Remember, many (probably most) banks still have applications written in COBOL running.
Don't get me wrong, I think everyone should look at all the available options - free and paid. At the end of the day, though, there are a lot of projects where the risks and expected application lifecycle pretty much mandate the level of support you only get from the big companies.
[Edit: Clarified the wording.]
Also oracle has a very large reach with salesforce so I've seen many former employees pitch oracle products heavily. Seems like once you work there you're part of the forever cult of ellison.
Not just working at Oracle. Once Oracle bought Sun our Oracle DBAs started relentlessly agitating for us to buy SPARC servers because they were now the best, obviously, and a failure to use them meant we clearly were doing it wrong.
1. Oracle does provide value. They have clustering and high-availability offerings that Postgres just can't touch, and those come with service and support personnel as part of the contract. A one-stop solution is a powerful sales pitch.
2. They have a massive existing install base within the Fortune 500, which spend amounts of money that the average hacker just can't grasp. Somebody that I know very recently worked on an enterprise project to create more-or-less a web page that had a $1,000,000 budget. Oracle is not asking for unreasonable amounts of money, by enterprise standards.
3. Companies value safety over risk, and Oracle has a long track record at the executive level of providing safety. The mindset goes something like: Postgres might be good enough for Imgur or Joe Bob's Bait Shack And Social Network, but neither of those is a bank, healthcare provider, or an entity capable of ordering an air strike. Oracle is telling the story their customers want to hear.
4. Because Oracle has such a large install base and so many success stories at the enterprise level, they are one of a very few number of default choices that an enterprise will make. They have spent decades building up sales momentum.
Business decisions usually have very little do to with the underlaying technology.
Yes. In the case of a database, "safety" is safety from downtime, data loss, data theft. So companies want a database that is fault tolerant and secure.
> Postgres might be good enough for Imgur or Joe Bob's Bait Shack And Social Network, but neither of those is a bank, healthcare provider, or an entity capable of ordering an air strike.
Banks and healthcare providers strike me as far more insecure than tech companies, and especially more insecure than the large computing platforms like EC2, Google Cloud, etc. Any cloud can host a postgres database, and many of them offer database-specific services.
Oracle is competing not just with Postgres, but with literally every other database offering, many from leading tech companies.
The cloud extracts value by utility billing a large customer base. Oracle extracts value by overbilling a small customer base. Which model seems more sustainable? Eventually EC2, Google Cloud, etc will overtake Oracle completely. Maybe if Oracle is lucky they can provide the overpriced consultants to manage their client's EC2 boxes.
Enterprise operates differently. They don't care about what postgres or EC2 or whatever can do, it's all about not doing anything that someone can point a finger at you for later. Nobody ever got fired for choosing IBM, Oracle or Microsoft. Also, companies that supply software to corps also supply something that's probably more valuable than the software itself. Support & Maintenance agreements. The fact that if anything goes wrong they can call up a phone number and immediately have a consultant($200+/hr) show up at the corp's location and troubleshoot the problem is a lot of accountability they don't have to directly absorb. There's also PCI compliance and just general fear of new things.
Accountability/blame is the name of the game. You want that value for yourself to be zero unless you get privileged info that the project has succeeded before everyone else finds out, in which case you then scramble to get your name on any documents or email chains related to said project so you can claim it was all due to your planning & decision-making.
I've seen this happen several times and was personally burned hard by people I thought were my friends back in 2006. I'm still bitter about it. I will not let that happen to me again. And I know it happened because I didn't properly document what I was doing and why. Or maybe, I just shouldn't have done it at all and just sit back and watch everyone else panic and burn.... whatever. It was my first job out of college, I was naive.
When Amazon competes with Oracle on service, what value will Oracle have to provide? Amazon is far ahead of them in platform, and catching up in service is easy. Oracle would have a much harder time doing the opposite.
Platform-first business model is quickly displacing service-first business model. Build a large customer base, use it as proof of ability to scale, then charge enterprise customers for concierge service.
EDIT: keep in mind we are discussing an article about oracle's declining sales.
On Enterprise-planet, all this "Cloud" talk is scary and you can't quickly conceptualize PCI compliance with some computer in the sky somewhere; nor can you conceptualize who/where a consultant will be to fix your problem immediately if a problem arises. Your IT department are a bunch of inflexible people who refused to learn anything beyond what they were using 20 years ago and will tell you "Cloud isn't safe! Didn't you hear on the news how such-n-such got hacked?" I have no problem accepting that you're right; I'm just telling you that Enterprise-world doesn't care how right you are. Nobody ever got fired for choosing IBM, Oracle or Microsoft. There's no thought-process beyond that point. You join the company, learn how they do things and do your best not to rock the boat or suggest any new fancy things that might make your coworkers antiquated skillset obsolete... or you will be back-stabbed.
Cloud in the Corp. world normally means VMWare vCloud (which we are now offering) or just VMWare ESX hosted in a remote datacenter.
So "the cloud" does exist in the Corp. world, its just that they are on average 5 years behind the rest of the tech world. I also think that a lot of these companies need to be 5 years behind, as their decision process on anything except cost savings normally takes months to complete with feature creep etc.
PCI compliance is a solved problem, whether it can be used as a cloud cudgel says more about the state of knowledge and power at a place than reality.
The future is already here, it's just not evenly distributed.
Let's not forget quality support cost a fortune, and that quality part is more important than some numbers on budgeting spreadsheet. Bear in mind, these static part of IT budget are carved in stone, nobody is questioning them.
Your anecdotal experience doesn't necessarily translate to all corporations.
This is not even remotely true any more.
They DO care about what products do. Obviously engineers/managers wan't the best technology they can get. The difference is they also care very much about support, long term roadmap, company health, ability to hire staff etc. They are often dealing with systems which tend to stick around for a decade or longer.
I can put an ad up for Oracle and get a lot of really good people or I can hire a consultancy or get support from Oracle. I can't do that with many open source technologies.
THIS ^
"Groupthink" writ large - BUT, it is the unfortunate reality.
By the time a small dynamic, free thinking company becomes an "Enterprise", it has metamorphosed into something almost unrecognisable.
The manager in charge of the process was A LOT more interested in CYA and selecting the product that had the most documentation to defend his choice (Gartner quadrants, other customers, etc.) than in taking risks or actually selecting the "best" product or sticking his neck for whatever he believed the best provider was.
Not unsurprisingly, Oracle and IBM provide a lot of what he needs to show upper management, and so tend to be in the discussion a lot.
You don't have to defend hiring IBM, but you DO have to defend using open source software X with support from local company Y. RedHat and similar do provide a level of "IBM-like" services for large companies, but most open source software doesn't have the support levels and on-site teams required (or sometimes IBM offers those !! Edit: as someone else pointed out, Oracle offers MySQL support too).
smtddr's point about having someone to phone is VERY true for these kind of conservative companies. (also, I've seen the kind of behaviour he documents about people trying to - and succeeding at - claiming credit for projects)
If you decide widget Y is now the way to go, you get to answer all the questions already answered for widget X: Who supports it? How? How to do we back it up and restore it? Who can tune queries? How does this differ from our build patterns for servers that host X? Can the two live on the same machine or are there potential conflicts? Etc.
Don't get me wrong - with proper planning you can educate the X guys on how to support Y and smoothly add it or even transition to it. But for large-scale systems it requires a great deal of planning and forethought if you want to do it without any bobbles.
My experience with [current] Oracle support and the ability to "call things in": (via the sort-of-usable support portal)
My org has paid millions for software and support on the Oracle products we run, and have "dedicated" support team ... it's worthless.
Dumb, uninformed 1st/2nd tier "engineers" who do not understand the products they are supporting, or basic tenets of system and application administration (https, sql, oel mgmt, etc), let alone understanding how their products integrate, or how to debug issues with those integrations.
It takes days to get a real response to a P1 ticket, and even if we've supplied all of the logs and information needed for the case, the first response we get is always canned "please supply xxxx logs" -- if we have an info level ticket, responses can take weeks even with escalation.
Oracle is an option in AWS RDS, though I'm not sure what the instance count is relative to the other options.
"Safety" is also having someone to blame when things go bad. That's the hardware/software vendor or the integrator doing the implementation. Where do you think the "no one ever got fired for buying IBM" saying came from?
I don't know why people always mention clustering. It provides so many downsides and complications that it hardly ever seems worth it. I don't know my people never mention instrumentation, monitoring and plan management. These things are there you help you when you need them.
not that the topics you mention are not important part of equation :)
I attribute their slow but inevitable death to a slow learning curve in Fortune 500 companies.
Also I imagine they're likely involved in a large number of government contracts.
This is uncomfortably close to the truth, and the reason why government procurement projects often overrun so badly with so much spent is that the budget is set high in the first place. This creates an opportunity to pile on consultants and complexity which can all be billed for.
The size of the budget determines the size of the solution, not the other way round.
... to choose an established vendor with a big name and large resources, so that you won't get fired if things don't work out. Even if your project goes down in flames, you can blame the vendor, snatch a "compensation" discount or freebie on some other license renewal, and you'll be fine.
Nobody in the enterprise space will ever get fired for choosing IBM, Oracle, Microsoft or SAP.
I think New York spent something like $40M for a general ledger system. There is ridiculous amounts of money in these projects.
What is this money spent on? Well, if you consider knowledge a scarce resource.... Capital is a poor substitute but all you've got when you're clueless.
It looks like they sell software but I think it closer to the truth to say that they are an insurance company.
1. lock entreprise in a 5 year contract. 2. when contract is about to expire lower prices to match wathever other companies are offering for the next 5 years + migration cost. 3. Win the deal as you offer the best value for the money : same ammount + no risk. 4. repeat
This is the main reason why you can see companies running on mainframe in 2015.
Queries per second is simply not a relevant question.
Oracle can be very fast and well setup but the tools to work with are not good and the general optimization now is not as needed with cheaper hardware and more horizontal systems.
There are so many other options out there now. PostgreSQL is great to work with and is so good now that it just might be the leader. Oracle was late to embrace usage on cloud instances and licensing models in that environment don't do as well, that is why Microsoft created Azure and it is their new platform essentially.
Instead, we use open sources, or cloud/ X as a Service, or local technologies.
I wonder if it is the same in USA or other countries?
What changes is when those startups become mature business, and they realize they don't need Oracle as much as "Mammoth" companies do.
It is the reason a company that disrespect geeks has not a good future.
When years ago I went to a geek convention and everybody had a mac, I instantly thought: Microsoft future is not good and bought Apple stock, even when people doubt about the company. It was a great decision.
Oracle has this attitude of "You are shit if you don't bring me a million dollars". They are not even neutral, they are hostile to startups. But startups grow and they don't forget how Oracle treated them.
And did you know that Oracle has the Oracle Database Personal Edition which is designed to provide software developers a cost effective, yet full featured Oracle Database environment on which to develop, test and run custom or packaged applications?
https://shop.oracle.com/pls/ostore/f?p=dstore:product:0::NO:...
History tells us why. And there are good reasons:
[1] Oracle tells Open Document founders to leave the project
[2] Oracle takes over KSplice and stops providing it for free to competitors of Oracles Linux Distribution.
[3] Oracle suing to maintain the position that APIs are copyrightable.
---
[1] https://wiki.openoffice.org/wiki/Community_Council_Log_20101...
[2] https://en.wikipedia.org/wiki/Ksplice
[3] https://en.wikipedia.org/wiki/Oracle_America,_Inc._v._Google....
Elsewhere on this thread, somebody posted a link to a DB use survey which showed PostgreSQL as the #4 DB, behind Oracle, MySQL and SQL Server. Can't let that leak out, though.
“It only costs us 6 percent of revenue, and that’s nothing,” Nelson said.
I think that IT staff of large enterprises are not foolish when they cling on to overpriced Oracle installations as that creates job security and high wages for them even if they are mediocre (not all of them are mediocre of course)
Also, it may not be foolish for a large enterprise that runs on Oracle to keep doing so, because any benefits from switching could be dwarfed by the cost and risk of switching.
But I think there are a lot of medium sized companies outside the tech sector for whom a decision to go with Oracle is foolish and not switching is foolish too. They're not just overpaying for Oracle licenses but also for DBAs, and they are creating a stagnant IT culture that is less likely to come up with innovative solutions for new business problems.
Now, your Oracle-hosted application might go down for two days as well, but then people would shrug and say "sometimes this happens."
To be fair to Oracle, though, it does seem to happen less often.
So I can totally imagine people being fired for getting in over their heads and messing something up, maybe repeatedly.
On the other hand, I've seen techs be banned from a client environment while dealing solely with proprietary software too.
I would disagree it's harder. It's trepidatious, but that's not the same.
We're in the middle of taking all our internal apps talking to a single huge Oracle database, and giving each app its own cluster of two PG boxes. Nothing has to play nice with anything else - that alone suddenly makes life ridiculously easier.
We have expensive paid Oracle support, who do PG as a sideline. But we've yet to have occasion to call them about PG.
We asked Oracle for a quote for two replicated mysql servers for HA. Because they were VMs we got a quote for 3 years that was 410,000 SEK (almost $50k). So we built our own replication solution with mariadb for free.
But yes, it's good to have the option of doing it yourself :-D
(For our few services that run on MySQL, I'm really hanging out for MariaDB to make it into Debian and hence Ubuntu, which is what we run on live - a mix of 12.04 and 14.04. Oracle runs on our last two remaining Sun Niagara SPARC boxes. We will be killing our last Oracle this year.)
Any large organization will buy support for open source software which can sometimes be actually more than the cost of a database license (see Datastax and Cassandra).
License, support, take your pick. It takes people to keep systems running.
Oracle is a superlative database, but it's the polar opposite of agile. This turns out to be important.
Regardless - the quote "Does the cloud-related business grow quickly enough to offset any long-term weakness in new software licenses? To us the answer is yes" seems to indicate that this is all sales for ORCL.
Oracle relying on cloud is pitting them against some more entrenched cloud-only vendors (e.g.: Workday, Salesforce) and disrupts the business model for their main cash cows. Typical innovator's dilemma territory if that's their play.
It's long been known that Database would eventually see a decline, which is why they bought loads of products to ring-fence it (as well as attacking SAP). I just wish their support was still worth the money -- in most cases it's not. That's the real problem IMHO.
The mayor problem with using open source in the Corp. world, is that many companies put rules such as:
"Any new technology product MUST have a multi million dollar company with 24/7 support available."
It never made any difference that it would be cheaper to hire two or three techs to do the job, as they come from different budgets (CAPEX vs OPEX).
For example, we did some rough testing recently and found that Oracle was faster for report generation than MSSQL but we can double the processing power assigned to the MSQQL to get equivalent performance for a fraction of the cost of Oracle licensing.
Although surprised it is Cassandra, and not mysql thats taking the market share. Is there some technical reason for this? I'm not intimate with what Cassandra offers.
MySQL alone doesn't cover the same bases.
However, like all "NoSQL" databases, the trade-offs come with the usual severe limitations (e.g. no joins, no foreign keys, no transactions in the usual sense of the term, eventual consistency, etc). Curious people diving into Cassandra (or most NoSQL databases for that matter) typically have zero understanding of these trade-offs at first, and think that they will be easier to work with. It isn't, and it isn't supposed to be. It's harder to work with, and has fewer features, because that's the trade-off you're making for scalability. There's little reason to use it if you don't need to scale like that.
So, curiosity and RDD ("resume-driven development") aside, I don't think there are many situations in which one would be choosing from Cassandra or MySQL/MariaDB/PostgreSQL. If you are working with multiple terabytes or more of data, then there is seldom a good reason to consider a relational database. If you are working with less than a terabyte of data, then there is seldom a good reason to consider anything OTHER than a relational database. I just don't see much overlap in which these technologies seriously compete against each other.
It's hard for me to believe statements like this. At this point, I think the only things that "just work" are gravity, relativity, and modern CPUs.
I recommend this talk on Scaling Pinterest http://www.infoq.com/presentations/Pinterest
http://blog.websudos.com/2014/08/16/a-series-on-cassandra-pa...
"Duplication of data is not only possible, but it’s also encouraged and often the only way to model the SQL equivalent."
We're busy replacing our Oracle with Postgres. It's just ridiculously more agile. Actually-good databases without having to think about licensing? Heresy!
Now my concern is to see what database platform all the architect astronauts end of gravitating their ridiculously over-engineered solutions towards.
5 years ago, the default choice for my government clients was Oracle, Oracle, Oracle.
I just finished up a year-long engagement and Oracle wasn't brought up even once.
1) Squeezing your enterprise customers for money.
2) Lawsuits. With the right incentives to lawyers and politicians, Oracle might be able to get Lotus v. Borland effectively reversed; then they could start licensing the use of SQL itself!
That's what they're very close to achieving with Oracle v Google.
However, I don't think Oracle would be the winner in the "Who owns SQL?" conversation.
It mainly talks about the database whereas Oracle does many other things these days (amongst other things some high value SaaS applications in the marketing space that can't be replaced by open source.
Also, the article criticises their growth but come on! They're the 2nd largest enterprise software company in the world - they aren't going to have the kind of 100% YoY growth that a small startup could have.
My prediction is oracle will eventually tighten down and freshen up a bit, cut some of the fat and continue to be a juggernaut for another 10 or so years at least.
(Disclaimer: I liked oracle for many years and recently used to work for and still have a soft spot for them somewhere despite their challenges :) ) Sent from mobile
According to the leading analysts, Oracle has grown software revenues by over ~2.5% in 2014 vs 2013 and Oracle has grown Database revenue as well having a world wide DBMS share above 40% with growth of over 4% in 2014. If you look at who's got the most popular database(s) in the world, by ranking, Oracle Database is ranked #1 and Oracle MySQL is ranked #2. http://db-engines.com/en/ranking
While the article infers fewer licenses sold means Oracle is eroding, article doesn’t mention that Oracle is showing growth in software upgrades, DBAAS, and overall, growth in cloud- private, hybrid and public. The “c” in “Oracle DB 12c” stands for “cloud”. Oracle has over 400,000 customers, where over 310,000 are Database customers according to the Oracle Fact sheet http://www.oracle.com/us/corporate/oracle-fact-sheet-079219....
You say Oracle Database is expensive-compared to what? Its all about what level of business value you require? Oracle sells several editions of Oracle DB from Oracle Database Personal Edition that starts at $92 per named user license to Oracle Database Standard Edition One with License costing as little as US$180.00 to the Oracle Database Standard Edition version starting at $350 per User license. Not everyone requires the enterprise features of Oracle Database Enterprise Edition. https://shop.oracle.com/pls/ostore/product?p1=Database&p2=Or...
Theres no such thing as free software unless you consider peoples time free, from administration, patching, management, support, upgrading, etc. You can surely download any open source Database but no ones going to support it for free. If you’re an enterprise, you're surely seeing your OPEX budgets sky-rocket, and a lot of that is due to "free" software and commodity hardware and the integration and management of a very complex, multi-vendor stack requiring armies of people to get it and keep it running.
It's nice to be "free" to spin up a handful of disposable test instances of a database when doing test driven / agile type development.
Oracle is difficult and arcane to create a DB instance. I had the sys admin at work help me to try to set up an instance (he insisted it was "easy"). It takes MANY steps, some of which were shown to me in tools that did not lend themselves to scripting.
I have a script that can create a ready to rock PostgreSQL instance in 5 seconds, no "Mother, may I???" required to run it. Well, ready to run a schema creation / migration, but the "tablespace" and schema name with admin/app user were in and ready to go.
If you are twiddling a few lines in a legacy app, this doesn't matter. If you are doing a big chunk of new development, automated regression testing data sources matter.
So it's interesting they published this article.