How Long Will Oracle Last?

by Joe Brockmeier - Jan. 31, 2009Comments (3)

Bob Evans calls out Oracle's ridiculous pricing model over on InformationWeek, but strangely overlooks the pressure from open source.

In Evans' "open letter" to Larry Ellison, he pleads for Oracle to start negotiating with its customers:

Mr. Ellison, it's easy to see why you like the current system, where someone pays, for example, $4,000,000 for a software license and then pays you $880,000 every year for "maintenance." And maybe CIOs will continue to find that's a fair exchange of value. But maybe they won't -- as you know better than just about anyone, the IT industry is an archetype of creative destruction, where faster/better/cheaper alternatives relentlessly stalk, attack, and kill older/slower/more-expensive models. Perhaps the model you and Charles Phillips and the entire Oracle global team have built is so extraordinarily singular that it will endure forever and remain unassailable from the forces that have ground down every previous eternal model in the technology business. But maybe not.

Instead of hoping for Oracle to have mercy on customers, Evans should be encouraging InformationWeek readers to be leaving Oracle in droves for open source alternatives.

PostgreSQL and MySQL have been nipping at Oracle's heels for some time now. PostgreSQL, for example, costs nothing to acquire, and performs nearly as well as Oracle on similar hardware:

The difference in cost, per pricing given by Tom Daly, is much more substantial than the difference in performance. Our benchmark run costs about $65,500 for the hardware, and has no software acquisition cost. Based on retail price listings, however, the Oracle/HP run costs $74,000 for the hardware and $110,000 for the software. That's a almost 200% more expensive. Add annual maintenance and support and it becomes even greater.

So effectively, you can still get slightly better performance by using Oracle on commodity hardware. You just pay $120,000 to gain an incremental amount of performance. But then, you already knew that, didn't you?

EnterpriseDB, which is based on PostgreSQL, is aiming squarely at Oracle's user base and feature set, and doesn't require millions in licensing to deploy before organizations can get to the support.

This is one area where, given the rough economy and pressure from FOSS alternatives, the proprietary guys need to look hard at revising their business model or plan to start losing customers. Begging Oracle for a price break isn't a winning strategy -- switching to FOSS is.

Joe 'Zonker' Brockmeier is a longtime FOSS advocate, and currently works for Novell as the community manager for openSUSE. Prior to joining Novell, Brockmeier worked as a technology journalist covering the open source beat for a number of publications, including Linux Magazine, Linux Weekly News, Linux.com, UnixReview.com, IBM developerWorks, and many others.


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3 Comments
 

There's a lot more to Oracle than just the database. Anyone who is only using Oracle's database can change reasonably easily. The real money is in all of their Enterprise Resource Planning software. Changing from one ERP platform to another is a backbreaker for an enterprise. That's why you don't see Oracle or SAP losing customers to one another very often.

Besides, Oracle buys one new company per month, in a year or two there won't be anyone left except SAP and they're not exactly cheap.


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"Besides, Oracle buys one new company per month, in a year or two there won't be anyone left"


Heh. They wouldn't be able to afford a new company every month if their customers stopped sending millions in license fees every few years. :-)


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Reducing "Oracle" to a database is far too simplistic. Oracle has built and acquired a massive empire of enterprise applications, both along horizontals and verticals. People don't spend $4,000,000 on Oracle licenses so they can run select queries incrementally more quickly. Come on...you're talking apples and oranges.


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