
Oracle Sales Erode as Startups Embrace Free Software - velodrome
http://www.bloomberg.com/news/articles/2015-06-11/oracle-sales-eroded-as-startups-embrace-souped-up-free-software
======
CyberDildonics
I don't even know how Oracle is still the juggernaut that they are. A $10,000
dollar computer running postgres can serve a ridiculous amount of queries.

I suspect the general idea is to spend huge amount of money to run incredibly
inefficient SQL queries.

~~~
donw
A number of reasons that form an important lesson in sales at the enterprise
level:

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.

~~~
chatmasta
> Companies value safety over risk

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.

~~~
smtddr
6 years of AT&T under my belt,

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.

~~~
chatmasta
Nothing about EC2 precludes it from offloading accountability from its clients
to itself. Amazon operates infrastructure for the CIA. Consultants are
plentiful and cheap. Amazon can provide handholding-as-a-Service just as well
as Oracle. At some point, Amazon may invest more resources into its service
business. But now it makes sense to grow its platform. That is the difference
in Amazon vs Oracle model. Amazon is platform first, Oracle is service first.

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.

~~~
smtddr
All this stuff you're saying is possible and may very well be true eventually,
but not in today's Enterprise-world.

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.

~~~
calgoo
I work for a semi large Network and Hosting provider in Europe that is trying
to provide Cloud for our Enterprise customers. We have banks and large
financial firms that are "very excited" about the project, which basically
means that they understood the buzzwords.

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.

~~~
dexterdog
They also need to be 5 years behind so that all of the tech is proven before
they put the noose on.

------
drawkbox
Oracle never really cared about the developer experience. Eventually that
wears out whatever market lead a company might have.

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.

~~~
mikegioia
Postgres is great, but sadly it's not _really_ in contention for being the
RDBMS leader right now: [http://db-
engines.com/en/ranking/relational+dbms](http://db-
engines.com/en/ranking/relational+dbms), but it is steadily climbing.

~~~
bsdpython
Look at the YOY change - if the trend continues Postgresql will be right up
there in 3-4 years

~~~
hitekker
Consider this graph: [http://db-
engines.com/en/ranking_trend/relational+dbms](http://db-
engines.com/en/ranking_trend/relational+dbms)

------
turingbook
In China, there is a hot trend called de-IOE (to remove IBM，Oracle and EMC or
other big foreign IT companies' technologies and products from IT systems) in
enterprise IT.

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?

~~~
acosmism
at the same time they block github.

~~~
balac
The government is blocking github, not those tech companies..

------
Htsthbjig
I disagree. Startups have always embraced Free software since I know of this
field.

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.

~~~
phd64
Oracle doesn't care about the developer experience? Oracle doesn't care about
startups? Disrespect geeks? Huh? Do you have any real justifications to these
or are you just basing this on your perceptions? Why would Oracle continue
driving developments in JAVA, MySQL, OpenSTACK, etc and many other open source
projects if it wasn't after the developer community? And have you seen the
latest Software in Silicon Cloud Development platform that’s free?
[https://swisdev.oracle.com](https://swisdev.oracle.com)

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:...](https://shop.oracle.com/pls/ostore/f?p=dstore:product:0::NO:RP,6:P6_LPI,P6_PROD_HIER_ID:4508888120961805719862,4509958287721805720011)

~~~
robert_foss
Oracle just like Microsoft just aren't trusted by the community at large.

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...](https://wiki.openoffice.org/wiki/Community_Council_Log_20101014)

[2]
[https://en.wikipedia.org/wiki/Ksplice](https://en.wikipedia.org/wiki/Ksplice)

[3]
[https://en.wikipedia.org/wiki/Oracle_America,_Inc._v._Google...](https://en.wikipedia.org/wiki/Oracle_America,_Inc._v._Google,_Inc).

------
bhahn

      “It only costs us 6 percent of revenue, and that’s nothing,” Nelson said.
    

This seems high. Is this normal for big companies?

~~~
ldayley
Wait, doesn't Ellison and/or Oracle own a huge chunk of Netsuite? Nelson is
basically doing PR work for them in this quote.

~~~
suyash
Doesn't matter, there are several other tech companies that pay big bucks to
Oracle for it's products and services - they are not fools.

~~~
tonyedgecombe
I think it does, just as the fact you work for Oracle should make us question
the neutrality of your statement.

------
anaolykarpov
I see this phrase repeated over and over: nobody got fired for chosing Oracle,
ibm, or Microsoft. I wonder: did anyone got fired for chosing Postgres, Linux,
or even new and risky stuff like Mongodb or nodejs? And being told at their
exit interview "you should've decided to use Oracle"? I guess tech people are
fired for lack of talent in hustling company politics much often than they are
for chosing a technology.

~~~
INTPenis
From first hand experience, it is much harder to maintain a FOSS environment.
It feels like putting more on the line. And I cannot deny that I do it partly
out of ideological reasons.

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.

~~~
davidgerard
We're doing an Oracle->PG move at present.

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.

~~~
INTPenis
I've been in a similar situation, a story I love to re-tell because it feels
like a victory for open source.

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.

~~~
davidgerard
If you need support, there's nothing wrong with buying support, even quite
expensive support. I'm sure Oracle would have provided the some of best MySQL
support available.

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.)

------
outside1234
"Doesn't cost anything": This is a meme that is largely false.

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.

~~~
davidgerard
We're moving from Oracle to Postgres. From three huge Oracle instances to,
pretty much, a cloud of Postgres boxes, a pair per application. _Because we
can_.

Oracle is a superlative database, but it's the polar opposite of agile. This
turns out to be important.

------
r00fus
Article fails to identify if the sales figures are limited to database or
whether they include the enterprise apps (i.e., EBS/Fusion).

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.

~~~
calgoo
I think SAP is stealing a lot of Oracles non-db business ATM. From the last
few years, all i hear is SAP hosting, SAP consultants, etc. Oracle has taken a
backseat, with the only new Oracle software I have seen being their crappy
hosted services.

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).

------
rbanffy
Is it surprising startups no longer buy as many Oracle licenses as they did in
the 90's?

~~~
DrStalker
It's hard to think of a situation where a new startup would use Oracle; it's a
massive cost compared to alternatives and while it does offer some advantages
over other DB choices those advantages are not very compelling for most uses.

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.

~~~
Yeroc
If you're a startup selling services to large enterprises you may be forced to
use Oracle because it gives your customers more confidence in your solution
(assuming you're offering a service where you storing information on important
assets on behalf of the enterprise).

------
meesterdude
My reaction to this article: Mwahahaha.

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.

~~~
StevePerkins
Cassandra is a distributed database that easily scales more or less to
infinity. As you add more nodes to a cluster, it automatically redistributes
data throughout the cluster. It "just works", and that's pretty exciting. So
Cassandra at the moment seems to be enjoying a bit of the hype cycle that
MongoDB enjoyed 5 or 6 years ago. It's the thing that everyone wants to try
out and get onto their resume at the moment.

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.

~~~
acchow
> Cassandra "just works"

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://www.infoq.com/presentations/Pinterest)

------
bane
Good.

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.

~~~
Spooky23
I've noticed a lot of MS SqlServer being thrown at larger systems.

------
bitwize
Well, there's always:

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!

~~~
rodgerd
> 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.

~~~
logicchains
If that happened and IBM said to Oracle "We want 30% of your database revenue
if you wish to keep using our SQL API", would there be anything Oracle could
do?

~~~
rodgerd
Point out IBM's non-mainframe business depends almost entirely on Java.

------
ccvannorman
From what I've heard about how Oracle treats their customers and the industry,
this is good news. We need to move away from juggernauts who try to control
things, and towards a more distributed, robust methodology.

~~~
smlacy
You mean that it should be more like a Bazaar and less like a Cathedral? Wow,
great idea!

------
CleanCut
This is the headline I expected to see 10 years ago.

~~~
jccooper
Judging by the graph there was a serious inflection point in 2008. Which seems
about right from what I remember. So it probably should have been a headline
long before now.

~~~
dredmorbius
The 2008 inflection would have come from the financial crisis. Lots of large
firms got hit by that, and a few went under. Since the plot is of _new_
licenses, it suggests that companies weighing the benefits of Oracle vs. one
of the alternatives (Postgresql, NoSQL), went with cheaper.

------
s5e
Someone should note that Larry Ellison owns about half of Netsuite. Quite the
bias towards Oracle with the last source.

------
daniel_iversen
This article is a bit sensationalist and misleading.

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

------
dangerboysteve
The first thing I thought when I saw the heading was. "They will just milk
existing customers with higher maintenance contracts and fees". Sure enough,
went to the article and the first graph shows declining sales but increasing
fees.

------
sybase46
As a 15 year Sybase, SQL server and Oracle DBA. Oracle compared to the 2
mentioned requires a platoon of DBAs because of the complexities involved. We
have all 3 RDBMS and 1 Sybase SQL server DBA can administer 10x what our
Oracle DBA can. I'm not even including tyhe Monster OEM 12c Cloud which takes
complexity to a new level to include a Gigantic resource Hog. Add cost, Human
resources and Oracle is a Huge over glutton Pig!

------
phd64
Oracle Sales are far from eroding, and the opposite is true. Very misleading
article and analysis, and questioning which vendor is in writers pocket?
"Figures don't lie but liars do figure"

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](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....](http://www.oracle.com/us/corporate/oracle-fact-
sheet-079219.pdf)

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...](https://shop.oracle.com/pls/ostore/product?p1=Database&p2=OracleDatabase&p3=&p4=&p5=&intcmp=ocom_database_oracledatabase)

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.

~~~
Roboprog
I won't argue that support is not a necessary cost of doing business. Of
course it is.

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.

------
capkutay
I'm not sure if 'new sales' vs 'upgrades' is a useful metric for a company
like oracle. They're already prevalent in the enterprise infrastructure of the
Global 2000. Oracle's new in-memory database with columnar compression is
considered an 'upgrade' to their flagship DB product.

------
tuyguntn
Here is follow up to the discussion, how do you describe your experience with
each of RDBMS's
[https://news.ycombinator.com/item?id=9705135](https://news.ycombinator.com/item?id=9705135)

------
ralmidani
It's good that more companies are adopting free software, but most of them do
not, in turn, release their core applications as free software. This indicates
they do not value freedom more than they value saving money.

------
nl382
I've heard rumors Bloomberg is trying hard to dump Oracle and move to OS like
MySQL or PostgreSQL.

So it's interesting _they_ published this article.

------
matchagaucho
Difficult to know if that 3% loss in new revenue wasn't offset by deferred
cloud revenue.

------
skc
Wonder why Microsofts server business seems to still be going strong then.

