Friday, August 17, 2007

Sympathy For The Devil is in the Details

Matt Assay has a great blog entry today, Sympathy for the Oracle. He basically describes things I have said many times, Oracle would rule the database world if it adjusted it's licensing model; Oracle Releases 11g Pricing and A Kinder, Gentler Oracle being two examples of that.

Matt talks about Oracle losing sales to SAP because of the approach to selling. SAP starts with thoughts and ends with execution while Oracle begins at the execution step.

Because open source makes it easier to win the bottom-up war.
I don't think Oracle needs open source. It already has the best database. The problem is that Oracle spends a fortune supporting the sales process:
Oracle already makes most of its profit on maintenance revenues and, as my friend reminded me, breaks even or loses money quite often on these initial big license sales (because upwards of 100 people can get involved in closing a $1 million deal with a multibillion dollar prospect). So, a low-cost sales model that gets it in the door and sets it up for downstream maintenance revenues sounds ideal.
And that's my point. Oracle doesn't need open source because open source is (and always will be) playing catch up. Oracle needs to change the model. Give the base model away free or nearly so. Sell the EE stack at a reasonable price (at least 1/4 or less of what it sells it for now), include ALL of the enterprise features as part of the base package and drop the sales force.

People buy from the web: no discounts, no sales people, no bull. Oracle moves from being the database company to being the software company. Partner with Sun to deliver Oracle Apps appliances. Partner with Redhat to deliver complete web solutions. Partner with MS & Dell to deliver SMB appliances.

Oracle would supply all of the software. Sun would supply some hardware and the OS, Dell hardware and MS the OS. The MS solution could have tight integration with .Net and MS-Office. Maybe Oracle would choose Google instead of MS. Same deal there though.

If Oracle doesn't do these things, than someone like EnterpriseDB will. Becuase that is the future of databases. We can have sympathy for the devil but the devil is in the details.