
Warren Buffett sells his Oracle shares, retains $44B investment in Apple - MilnerRoute
https://www.zdnet.com/article/warren-buffett-has-sold-his-oracle-shares-but-retained-his-44-billion-investment-in-apple/
======
rdegges
This past year I spoke at Oracle's Code One conference in San Francisco for
the first time. I've never used Oracle products before and had never been to
an Oracle event before, but I was aware of Oracle's incredibly bad reputation
in the dev community.

When I got to the event it was MASSIVE. I think they have something like 30k+
attendees.

As I was walking around, hanging out, and attending talks, I decided to make
friends and chat up other people. This is where things got interesting.

Through the 2 days I was at the event, I probably met nearly 100 developers,
and when I asked all of them what they use Oracle for EVERY SINGLE ONE OF THEM
openly told me that their companies use Oracle right now but they hate it and
they were all in the process of transitioning to other providers or open
source solutions.

Every single person I met at Code One told me the exact same thing.

That is pretty insane and I don't think it bodes well for Oracle that all of
their customers are trying to find ways to get out of their ecosystem :x

~~~
tomelders
There are a few companies who could all have the same slogan, but I’ll use
Oracle in this example...

Oracle: we make the stuff that other people make you use.

Other candidates include (but not limited to)

\- Atlasian \- Microsoft \- Adobe

~~~
brianberns
Microsoft’s development ecosystem (e.g. SQL Server, .NET) is top notch, even
if you hate Windows and Office.

~~~
jackfoxy
As a Microsoft Development Technologies MVP, I can tell you MS gets it and has
made huge progress in usefulness and usability of the DotNet ecosystem. Keep
in mind there are on the order of 1M C# developers worldwide. Most in
enterprise environments and most belonging to the _dark matter developers_.
They don't hang out on HN, Twitter, go to conferences, write blogs, or even
read them. This will keep MS dev ecosystem development focused on C# and
object oriented for the rest of my life. But I can tell you all the MS techies
in .NET development are interested in and respect F# and functional
programming and want to see it succeed. There has been pain getting to cross-
platform .NET, which is what NetStandard/NetCore is all about. It is pretty
stable and useful today, and there is a lot of wood behind the development
arrow going forward.

~~~
hermitdev
I love C#, and have been using it since the 1.0 days back around 2002. What
has really annoyed me as of late is the confusing branding. Standard vs Core
vs what the hell is Framework 4.7 called?

Along with the branding confusion, the formally very approachable and
discoverable MSDN documentation for the class library has become a near
useless clusterfuck. They've deprecated made.microsoft.com/library/ (at least
for .Net) but don't mention it on the site!

~~~
avinium
> What has really annoyed me as of late is the confusing branding. Standard vs
> Core vs what the hell is Framework 4.7 called?

I agree that it's confusing at first, but when you step back and look at why
Microsoft went down this path, it starts to make a lot of sense.

When .NET was launched in 2002, it was a closed-source, Windows only
development framework.

Microsoft was a _very_ different company back then, and Windows was its gravy
train. If you were a developer inside the Windows ecosystem, you were showered
with (closed-source) love. If you were outside? Well, fuck you, Microsoft will
crush you. Everything was oriented towards getting retail/enterprise consumers
to buy Windows (and Office etc).

The 180 degree flip to embrace open source is a very recent development.
Microsoft realized that desktop OS's were less and less relevant commercially,
and that the future was in cloud services.

I haven't looked at the figures, but I assume it's a lot more lucrative to
lock in tens of thousands of dollars _per month_ in cloud subscription/support
fees than selling Windows direct to consumers.

So with this reorientation, Microsoft needs a strategy to capture the cloud
services market (and keep in mind that this is 5-10 years after AWS has been
running the shop).

The solution? Open source .NET to accelerate its adoption and entice
developers towards Azure.

First, Microsoft won't care if you use their implementation of .NET or Mono -
as long as you're using it on Azure, you're fine. Hence .NET Standard -
literally, an open-source standard that anyone can code against, and know that
their stuff will just run, no matter which implementation is used under the
hood.

Second, Microsoft then release their own implementation of this standard -
.NET Core.

Third, we come to .NET Framework. For most entrants to the ecosystem, you can
consider this to be legacy. This is the evolution of the original (2002)
closed-source approach to .NET, and is only sticking around due to Microsoft's
long-term commitment to its software releases.

Again, I agree that none of this is clear when you're new to .NET. It makes a
lot more sense when you realize the naming evolved from Microsoft shoehorning
a legacy platform into a fundamentally new, open-source/SaaS subscription
strategy.

------
monocasa
Probably because Oracle has been pissing off their bread and butter for years
and it's starting to bite them.

Amazon got the gov cloud contract. Oracle's suing, but all they have is that
someone jumped from the DoD to Amazon. [https://www.nextgov.com/it-
modernization/2019/02/pentagon-in...](https://www.nextgov.com/it-
modernization/2019/02/pentagon-investigating-whether-amazon-employee-tilted-
jedi-contract/155118/)

Also, I've heard stories at other .gov datacenters where they're trying to
phase out Oracle as fast as they can because they're tired of their crap. Like
last time I checked Oracle DB charged based on the number of CPUs you _could_
be running on. So if you have a modern env that dynamically provisions across
a datacenter, then they charge for all of the cores in your datacenter.

~~~
Someone1234
We got hit by that.

Oracle used to charge us per physical core on our production nodes, with a
discount for development and backup/spare.

Then suddenly they changed how it was licensed and our bill jumped up 4x
(we're talking a six figure increase).

We negotiated it down somewhat (closer to a 2.5x increase as a "goodwill
discount"), but since then have been quietly making changes to the code-base
to make a future SQL Server migration easier. We have four years left in this
contract, and we hope to be ready by then.

We're on Oracle at all because we used to use their application development
suite (ADF, Forms, etc), but those all either got discontinued or turn so sour
you don't want to be using them, so now Oracle DB is just a remnant.

~~~
amenod
If you don't mind me asking, how is the SQL Server as far as price goes? I
know Oracle is very expensive, is SQL Server cheaper for a similar usage
pattern?

Also curious, what made you decide not to use PostgreSQL (or EnterpriseDB if
you need entreprise solution)? Was it a technical reason or are you more
comfortable with MS solutions in general?

I am asking because I have mostly used MySQL (pre-Oracle) and now PostgreSQL,
and have always wondered what made people choose either Oracle or SQL Server.
I have met both in different jobs - I hate Oracle with passion because of
their licensins shenanigans, and wasn't impressed by SQL Server (though that
might be in part that I was using it with SharePoint, which was... something).

~~~
greedo
SQL Server now uses the same licensing strategy as Oracle in virtual
environments.

~~~
Someone1234
SQL Server offers two different license models (at Enterprise tier). Per
physical core or per virtual core.

If you license all the physical cores you can run as many copies of SQL Server
as your infrastructure will allow.

If you want to run SQL Server as a partial part of a private cloud then
licensing per virtual core could be a significant savings in some
circumstances. This is because physical cores used for other things won't
require a license.

This article has more info:

[https://blogs.flexera.com/elo/2017/06/an-introduction-to-
mic...](https://blogs.flexera.com/elo/2017/06/an-introduction-to-microsoft-
sql-server-licensing/)

------
yingw787
Seems to me that there's three stages to a company's life:

Great to invest in, great to work for: Microsoft/Google in the early days

Great to invest in, not great to work for: AT&T today

Not great to invest in, not great to work for: Oracle today

There's probably companies out there that are not great to invest in and great
to work for, but I don't know how common it is for them to become great
companies to invest in.

~~~
pjc50
Not great to invest in, but great to work for: early-stage startups with fancy
work environments but no real chance of success.

~~~
goldenchrome
Those usually end up being companies that aren't great to work for because of
how dysfunctional most of them are. Fancy work environments don't make me
happy, but clueless management sure makes me unhappy.

------
arisAlexis
He has no idea about technology. He didn't invest in Google and Amazon and he
bought Apple at the absolute top. He also bought IBM and sold at a loss. He is
equally mistaken with Bitcoin. It's just not his field and his moves mean
nothing.

~~~
matchagaucho
He's honest enough to admit as much. From the article:

 _" after I started buying [Oracle], I felt I still didn't understand the
business. I actually changed my mind in terms of understanding it, not in
terms of evaluating it. Oracle is a great business, but I don't think I
understand exactly where the cloud is going."_

~~~
arisAlexis
at the same time he is extremely convinced that something he doesn't
understand (Bitcoin) is going to fail but he doesn't short it either. He is
just old.

------
chadcmulligan
I used to be an oracle consultant, it paid really well. Now it doesn't, and
their are less jobs in it. Unless I'm getting paid a lot I wouldn't use
Oracle, I'd do something more interesting. Around the 2000's the number of
Oracle DBA's skyrocketed, they come from India and elsewhere, so companies
outsourced the Oracle work to these companies, and I believe Oracle itself is
developed in large part in these countries.

So the work for Oracle dried up, and wages plummeted, so I moved out of
Oracle, like many others. DBA work is fairly easy to outsource, at least on
paper, same with Dev work. Maybe their now paying the price of all this
outsourcing to a less skilled workforce (at least initially).

I no longer do Oracle work, it was a nice money spinner, now its a race to the
bottom. Conversely their licensing practices are extreme, as others have
mentioned, so everyone wants to get out of Oracle.

Having said that, their databases are still very good, and can do anything you
want without going elsewhere. Though they are being disrupted from below with
many open source solutions and MSSql.

------
jkuria
Hmmh, Oracle runs expensive front page Wall Street Journal Ads that say "Cut
Your Amazon Bill in Half".

I wonder how effective these are. I've been seeing them since at least 2015 so
they must be somewhat effective.

Here is what they look like (the banner on the right):

[https://www.oracle.com/database/autonomous-
database/guarante...](https://www.oracle.com/database/autonomous-
database/guaranteed.html)

Oracle's stock is at a 5 year high!

[https://www.google.com/search?source=hp&ei=WOh6XJXUMIeQ0gL0j...](https://www.google.com/search?source=hp&ei=WOh6XJXUMIeQ0gL0j6ywCQ&q=oracle+stock+price&btnK=Google+Search&oq=oracle+stock+price&gs_l=psy-
ab.3..0i131l2j0l8.339.3244..3358...0.0..0.145.1170.17j2......0....1..gws-
wiz.....0.HBFX_yO_nsU)

~~~
tabtab
Oracle has always relied on bold ads with bold claims. Example:

[https://regmedia.co.uk/2012/11/15/88_byte_oracle_large.jpg](https://regmedia.co.uk/2012/11/15/88_byte_oracle_large.jpg)

------
miles_matthias
"Buffett explained that this employee "works with a limited amount of money –
$13 billion, roughly – so if he wants to buy something he needs to sell
something. If I want to buy something, I have cash around to do it.""

------
utopcell
Aah.. Oracle! The company that, when researchers benchmarked it against other
DBs and found it dead slow, they made benchmarking it illegal. Why are they
still around again ?

------
novaRom
Can someone please ELI5 what is Oracle software? I thought it's a Java, but
this thread mentions data bases. Is it something like MySQL? Do customers pay
a lot for this database software or for the hosting/cloud?

~~~
vbezhenar
Today there are two major proprietary databases: Oracle and MS SQL. There was
DB2, but I'm not sure if it's still relevant. And database market is huge,
basically any serious enterprise software uses Oracle.

~~~
hermitdev
I bet DB2/UDB is still around and kicking, if nothing more for legacy support.
Theres also Sybase, but they've fairly much stagnated and jacked up their
pricing, so the companies I've worked with that used Sybase either have or are
working to migrate to MS SQL.

There are other esoteric DBMS's, such as IMS which is still supported by IBM
to the best of my knowledge (because that 40 year COBOL app still has to run).

------
tyingq
There's also speculation that Buffet was trying to buy Southwest Airlines:
[http://amp.timeinc.net/fortune/2019/02/28/southwest-stock-
ac...](http://amp.timeinc.net/fortune/2019/02/28/southwest-stock-acquisition-
warren-buffett)

~~~
stygiansonic
Interesting, I did not his view on airlines had changed, thanks for the link.

Previously: [https://www.forbes.com/sites/tedreed/2013/05/13/buffett-
decr...](https://www.forbes.com/sites/tedreed/2013/05/13/buffett-decries-
airline-investing-even-though-at-worst-he-broke-even/)

~~~
pmart123
It did once he realized airlines are now offering additive items. When it was
just a butt in a seat, airlines were crap businesses due to the capital costs,
regulations, and fuel prices. With shale, it looks like the US won't have a
foreign oil dependency for a long time. Meanwhile, airlines can charge you $12
for wifi, $30 for extra legroom, etc. which completely changes the economics
of flying.

~~~
tyingq
Notably, Southwest doesn't currently charge for checked bags, which is
probably the biggest piece of secondary revenue for other airlines.

I doubt WiFi makes money for any airline. It's either satellite, which costs
them a ton, or LTE, where they get a paltry revenue share. I think WiFi is
more of a customer satisfaction/expectation thing.

~~~
DGAP
Eh, most airlines going for satellite WiFi aren't doing it out of the goodness
of their hearts - they're doing it because the unit economics make sense.
There are exceptions like JetBlue who offer it for "free" though.

~~~
tyingq
If you do the math on the high capital costs to install and FAA certify the
satellite equipment, then the ongoing transponder costs, then the low
conversion rate, and finally the fuel costs due to the protruding bubble for
the antenna...they are lucky if it breaks even.

~~~
nostrademons
I think they do it because customers have shown a willingness to choose
flights based on which has wifi (and they now show up in aggregators like
Kayak and Hipmunk). Previously, price and schedule were basically the only
differentiators that actually affected peoples' purchasing decisions. When it
means selling a ticket vs. not selling a ticket, it's much easier to make the
case for the capital costs.

------
dogma1138
With Oracle essentially comiting suicide with the new Java licensing scheme
this isn’t surprising.

It’s the best thing that happened to OpenJDK and the much cheaper commercial
alternatives based on it.

I can only imagine the celebration at Azul when Oracle announced this nonsense
they basically justified the business model of their competitors overnight.

~~~
JimboOmega
What is the new licensing and how is it committing suicide?

Last I checked everybody uses java for everything, especially Google, which
then makes it ubiquitous (on Android devices, etc.)

~~~
dogma1138
This isn’t about Java as a language but about the Runtime binaries provided by
Oracle.

There is now a very aggressive fee structure for using Java SE/JDK in a
commercial environment.

[https://www.oracle.com/technetwork/java/javaseproducts/overv...](https://www.oracle.com/technetwork/java/javaseproducts/overview/javasesubscriptionfaq-4891443.html)

You will pay as much as $2.50 per user for desktop installations and as much
as $25 per core for server installations, the Advanced subscription which also
provides you with security updates for older versions of Java is now nearly
$7000 per server per year.

~~~
technofiend
In the past companies had no clue how much of something was installed. These
days with cyber security being such a concern any company with tight controls
knows _exactly_ what's on every machine. It's not hard to treat Oracle Java
like a threat and red flag it during scanning. And if Oracle keeps up these
shenanigans I can't help but feel like that's exactly what will happen.

~~~
dogma1138
Eh? The entire financial sector runs on Java, this isn’t about milking fees
form some random companies because someone installed Java on their laptop this
is milking fees form the actual key users of Java.

Microsoft has signed an agreement with Azul for Java on Azure and Amazon has
released their own distribution of OpenJDK as a result.

The company I work for also switched to Azul since the projected cost of
Oracle was in the 10s of millions due to their Advanced support costs per
server.

Just to put things into perspective the projected yearly licensing cost for a
single trading platform for us was 21 million dollars for the Oracle Advanced
service agreement, I don’t know the exact final figure but apparently Azul was
less than 200K for the entire company.

I simply don’t understand how Oracle thought they could get away with these
fees.

~~~
hermitdev
> The entire financial sector runs on Java

No, it doesn't. Sure, you'll find a good amount of Java, but it will likely be
C++ anywhere that's really latency sensitive. C# is also heavily used for
front end GUIs now. F# is growing as well, and the quants (and others) love
Python.

In my experience in finance, Java is now legacy. It was a fun experiment and
had a good go, but it's now withering away.

Source: 15 years in financial development, mostly hedge funds, across 4 firms,
and having interviewed with dozens of others.

Only place I've worked at doing active Java development was a startup CRM SaaS
targeting the financial space. Coincidentally, the only Oracle shop ive worked
at.

~~~
pron
I think you are talking about a small sector of finance (trading, especially
HFT?). The lion's share of software in finance is software used by large
banks, insurance companies, etc. -- not hedge funds -- where Java is dominant
(even in new projects).

------
nezzor
I thought he didn’t invest in tech because it was outside his “circle of
competence”?

~~~
ddebernardy
If memory serves me well, in one of the letters he sent a number of years back
(10-ish?), he mentioned that they had someone in their staff managing a
portfolio of stock picks and doing a great job at it, and gave a heads up to
readers that they might find tech stocks come in and out of their portfolio
every so often as a result. Presumably he liked the returns he was seeing and
jumped in too.

Also, Apple displays a number of characteristics that he reportedly likes to
invest in: the business that Apple is in is straightforward to understand, the
market is big and they've a strong or growing market position, they're
profitable and have a big cash position, they've a strong brand and difficult
to reproduce expertise (i.e. a moat).

------
pram
Oracle is going down in flames for sure. Their cloud is an absolute joke.
Disaster levels of bad.

It was one of my favorite jobs though, basically a paid vacation. Thanks
Larry!

------
sunstone
Watching Warren learning to buy tech stocks is like watching a 4 year old
learning to ride a bike. I suspect the problem is that for tech stocks the
future is much less certain than in most industries and the trick is to judge
before hand how things are likely to play out for a given stock given the
various threads of likely technical progress over 2, 5 and 10 years.

------
1337biz
Is there actually some sort of a Warren Buffett deal tracker? Just some simple
side/list of trades he is doing. Or what is the delay he is usually publishing
them?

~~~
Tevunah
13F's have Berkshire Hathaway's positions 45 days after the end of a quarter.

[https://www.sec.gov/cgi-bin/browse-
edgar?CIK=0001067983&acti...](https://www.sec.gov/cgi-bin/browse-
edgar?CIK=0001067983&action=getcompany)

------
microtherion
I was going to joke that the Red Hat investment could mean that 2019 is the
Year of Linux in the Portfolio, but that year was, arguably, 1999, when LNUX
when public.

------
RickJWagner
Buffett doesn't know where the cloud is going? That admission just shows that
Buffett still seeks to understand the boundaries of his competency. Classic
Buffett.

Also, I like that he's buying Red Hat. (He won't hold it long, though. IBM is
getting closer.)

------
DeonPenny
His explanation made so much sense. He said he didn't understand the product
lol. That probably a sign to get out

~~~
oska
What would have made sense is for him not to get _in_ to the company in the
first place, if he didn't understand the product.

~~~
valuearb
Certainty is only found looking backwards.

------
oldpond
Smart man. Oracle is garbage.

------
HillaryBriss
i don't get this. their machines are too costly. the old insane greatness has
become watered down with a focus on global logistics. and what about the
supply chain issues with China?

what does Apple have on the horizon -- data services? an emphasis on the
privacy protecting ecosystem?

where is the new vision?

~~~
username223
I don't see Apple achieving hyper-growth and becoming a $10 trillion company,
but they have a solid business selling high-end hardware to people willing to
pay for it with money instead of data. What does Oracle have on the horizon?
Legacy enterprise support and lawsuits about Java?

~~~
askafriend
If Apple strengthens their foothold in Health and Health related
services/integrations, their marketcap will multiply from where it is now.

~~~
TheOtherHobbes
I honestly can't see Apple making this work.

Health is a diverse, messy, market. Apple's schtick has always been making
devices that make computing magical, and health would be a huge shift away
from that.

IMO the market is really looking for a a powerful all-in-one diagnostic health
appliance - something like the analyser Theranos was pitching for, but which
actually works, and is more comprehensive.

De-industrialising health and making the personal equivalent of a diagnostic
lab that could keep track of key markers, watch nutrition, exercise, and
supplements, and transfer information to doctors - AI or human - would be a
major breakthrough.

But the technology for that doesn't exist yet. And even it becomes available
it may not be affordable or portable.

And because bodily fluids are involved it conflicts with the Apple image of
clean minimalism.

That leaves health as set of tentative fragmented tools and services which
provide reassurance here and there - like the fall notification in Watch - but
are a long way short of a comprehensive service.

The fitness market is a more obvious choice. But if you look at Apple's
record, it's not inspiring. Fitbit is a strong competitor, because Watch
hasn't lived up to its potential - possibly because Apple can't decide if
Watch should be a fashion statement or a personal fitness device. It doesn't
really make sense to consumers to try to sell it as both.

Behind all of that, I just can't see the current management team having the
skill or imagination to make it happen. I think health is going to remain a
side interest - a nice add-on, but not a huge new core market that Apple can
expand into.

------
kinnth
I think he's wrong on this one. I honestly feel apple is loosing outside of
the US and that's going to be more and more important for the app developer
community to go android first.

~~~
eeeeeeeeeeeee
Apple is still capturing most of the revenue from mobile app stores because
Apple users tend to spend a lot more than Android users:

[https://techcrunch.com/2018/07/16/apples-app-store-
revenue-n...](https://techcrunch.com/2018/07/16/apples-app-store-revenue-
nearly-double-that-of-google-play-in-first-half-of-2018/)

And this is despite, like you said, the install base of Android being much
larger.

~~~
dingdongding
No Apple is not capturing most of the revenue from App Store. Their services
revenue which is App Store + iCloud + Apple Music is their second biggest
revenue stream I think after iPhone. But it still dwarfs in front of iPhone.
Though services revenue is growing a lot faster.

~~~
eeeeeeeeeeeee
You didn't even read what I said or the link I posted. I'm comparing Apple to
Android and their respective app store revenues, which is what the original
comment was about. I never said Apple received most of their revenue from the
app store.

------
paul7986
It's probably too early, but Amazon (via North's AR glasses they invested in)
might have beat them in terms of creating a great AR glasses experience.

North Focals AR glasses in their first iteration are getting good reviews
([https://duckduckgo.com/?q=north+focal+ar+glasses+reviews&t=f...](https://duckduckgo.com/?q=north+focal+ar+glasses+reviews&t=ffab&ia=web))
and look intriguing. Also, I tried on a pair of Bose audio AR sunglasses and
was really impressed; felt obvious ... use your glasses to listen to audio
from your phone, as well get audio AR info say at national monuments to
wherever.

Personally I'd buy AR sunglasses ones that merge North with Bose in a
heartbeat. Who doesn't wear sunglasses already?

~~~
karlding
For what it's worth, North recently laid off 150 of their employees [0] and
the Canadian government is pulling their 18 million investment [1] in the
company. There's some discussion about this on the /r/uwaterloo subreddit [2],
as well as the regional /r/waterloo reddit.

[0] [https://www.theverge.com/2019/2/22/18236253/north-focals-
sma...](https://www.theverge.com/2019/2/22/18236253/north-focals-smart-
glasses-150-employee-lay-offs)

[1] [https://www.theverge.com/2019/2/22/18236695/north-focals-
lay...](https://www.theverge.com/2019/2/22/18236695/north-focals-layoffs-
canadian-government-navdeep-bains-funding)

[2]
[https://www.reddit.com/r/uwaterloo/comments/aubwpm/north_tha...](https://www.reddit.com/r/uwaterloo/comments/aubwpm/north_thalmic_labs_lays_off_150_employees_and/)

~~~
paul7986
Yes, I did see this news. Also , a week before or so saw reports of the guy at
Apple heading up their glasses initiative had left the company.

Still North looks like a huge leap from any AR glasses out there.

