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
15-20 years ago Oracle was №1 in database-related technologies and everyone knew it. For that time they had almost perfect solutions for most database-related problems on market. But market is changing. Today they stuck with their good solutions for outdated problems and their solutions doesn't solve modern problems well.
So here is my short list of modern database-related problems, for which I think Oracle is not best at:
- files/data storage (today there are better non-database solutions for that, 15-20 years ago it was a good practice to store files in database),
- full-text search (10-15 years ago substring search was enough, today we want complex search criterions),
- consistency across data centers,
- key-value cache (today we want almost instantaneous cache answers),
- OLAP (there are faster solutions on market).
15-20 years ago Oracle was one and only one solution for almost all database-related business problems. Today for many modern problems there are better solutions than Oracle.
Competitors like DB2 and Sybase seem to have utterly faded away, so it's surpising that Oracle's still a factor at all.
Is there anything that Oracle still does that nobody else can match?
For example, consider partitioning. Oracle has had seamless predicate-based table partitioning for about 20 years now. Postgres is getting there, but is still lagging behind. With Oracle you just tell it to partition by some expression(s) and off you go.
Then there are things like multi-master replication, bitmap indexing and other nice features. Oracle is also extremely fast. The underlying table storage is very pragmatic, with a hybrid MVCC system that has both an undo and a redo log. Tables are written in-place, and transaction contention is handled by linked lists of records to the undo log, so getting an older copy of a row is still almost as cheap as Postgres.
Of course, it's beaten in some areas. It's not great a full text search, I believe. Compared to Oracle, Postgres' transactional DDL is positively magical. With Oracle and nearly every other database out there, things like "drop table" can't run inside a transaction.
I would never want to work with Oracle, but I can't deny that it's got some great features.
(Disclosure: I work for Google)
Selling to enterprise.
I really need to get an understanding of the issues the Orcale team faces one day but they tend to look down on us and the pc groups
A bit of a shower thought, I have no evidence for this.
Oracle: we make the stuff that other people make you use.
Other candidates include (but not limited to)
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!
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.
* Visual Studio is the best IDE, bar none. It's a pleasure to use and Microsoft keeps it up to date so it's usually bug free for normal use. I don't even know what its serious competitors are. Eclipse? VIM? Forgive me for not knowing. :)
* C# is the best OO programming language (if you don't need the raw speed of C++ or, I guess, Rust). Java is a disappointing mess controlled by, yes, Oracle. Python and other dynamically typed languages are fine for scripting, but not for developing complex professional software.
* F# is the best functional programming language for getting stuff done. In fact, it's the best language for getting stuff done, period. Haskell is amazing for its mathematical purity, and I've learned so much about FP and category theory from the Haskell community, but F# gives you immediate access to the zillions of packages created for the .NET ecosystem and is totally compatible with C#. You can also use F# for imperative OO programming when you need to (which is almost never).
* SQL Server is the best RDBMS. Oracle is painful. The open source databases (PostgreSQL, MySQL, etc.) have come a long way, but still don't have SQL Server's combination of power and ease of use. NoSQL databases are interesting, but seriously lacking in important features. I've yet to come across a use case where I would actually want to use one. (Special demerit to MongoDB for using JSON as a query language. Good lord.)
* Windows is fine. It's not Unix/Linux, but it lacks for nothing.
All of the above is massively IMHO, obviously.
I don’t know how bug-free VS is now, but VS 2005 and 2008 were buggy in problematic ways. Support was friendly, but the bugs didn’t get fixed quickly. IntelliType (for C++) was nifty bug extremely buggy. Switching to emacs was a major step back in usability, but it was enormously faster and it tended to just work.
C# has a top notch compiler. Sadly, MS’s C++ compiler was, and mostly still is, pretty bad.
Getting off of Windows was a big win. Managing a Linux machine is much nicer, and, when something doesn’t work, you have a better chance of figuring out why.
I have no experience with SQL Server. MySQL and PostgreSQL both sucked back then.
If we were starting from scratch, Rust would be a credible contender.
That said, the number of commercial applications developed in Haskell is very small, because, I think, it doesn't integrate as well into the larger ecosystems around it. It seems like it's a beautiful island all by itself.
Hopefully, FP will take over the world soon and Haskell and F# will both be at the top of the charts! :)
Given trends, I don't expect to see any exponential growth though.
I know there are some free tools, but for me nothing out there compares to Adobe Lightroom.
IMO, none of those companies are in the same ballpark as Oracle.
It's pretty clear that MSSQL is seen rather differently from DB2 and Oracle (which are #1 and #2 on the "most dreaded" list, respectively).
I think it’s pretty clear that the people with the best opinions on SO are vastly outnumbered by people with unqualified opinions. Surely something like Simpson’s law can be applied here. Like - of the people with n amount of accepted answers for any given tag - what is their opinion on something related to that tag?
I personally can’t be bothered with these kinds of questions, but I remember that back in my early days, I was something of a zealot when it came to things I knew vs things I didn’t. I cut my teeth on PHP, MySQL and Flash/Actionscript. Had you asked me back then how I rated those things, I’d have given them 10/10, despite having nothing to compare them to.
"% of developers who are developing with the language or technology but have not expressed interest in continuing to do so"
No developer (or not a lot) would knowingly choose Salesforce as a tool, yet all these folks are at the conference because the employer paid them to go.
With Oracle, though, I think it really is a lack of technical positioning rather than any "devs hate them" sentiment that is a real existential risk to them long term. Lots of senior execs realize that Oracle's cloud technology is a joke, and more importantly their crazy licensing model makes it a major PITA to run Oracle DBs in any other cloud, and perhaps even more importantly that a lot of changes in dev architecture are making the huge, powerful, monolithic database less critical than it once was. Sure, there are lots of legacy mission critical apps that live and will live on Oracle for a long time, but executive leadership at many companies is now starting to see this (appropriately IMO) as a competitive disadvantage, and they will make choices to try to extricate themselves from Oracle as much as possible.
where he's chatting about some of his customers hating Oracle and wanting to get off, specifically Amazon and SAP. But he says they don't because the Oracle database is better and the other systems don't work properly.
It’s like a Fortune 500 company being based on selling the bash shell and tools for using bash.
Open source for infrastructure level software has historically been wildly successful.
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...
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.
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.
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).
You can use this to get a very ballpark idea:
From actual quotes at full price, we'd be paying around the same to Microsoft for SQL Server Enterprise than we were paying Oracle BEFORE the price hike/license changes. However that doesn't include discounts which most organizations running any Microsoft software at all would be eligible for.
So in other words: Almost always cheaper than Oracle Database. Varies between a little cheaper and substantially cheaper. Both companies are trying to drag you towards Cloud however, so there's deeper discounts there right now (it's a trap!).
> Also curious, what made you decide not to use PostgreSQL (or EnterpriseDB if you need entreprise solution)?
No one person decided. This is a large organization that moves slowly and is fairly conservative. Plus the costs of migration are high, if migration fails people in management will suffer (either to their career or just outright be transferred/fired).
So in other words "nobody gets fired for buying Microsoft" or w/e. It certainly doesn't hurt that it is much easier to hire/contract in SQL Server talent than PostgreSQL. Technical considerations play a part, but only up to the point where it has to have what we need.
> 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.
That's because you're considering what is best using logic, reason, and technical facts. In the enterprise space more often than not major companies just follow the crowd, with a handful of trailblazers setting the standard. Oracle and SQL Server are popular because they're already popular, in a fully circular way.
If I started a business tomorrow I'd use PostgreSQL. But if I was a C-level in an enterprise and my career is on the line, I am going to be sticking with SQL Server.
The alignment between product support and product builder is muddier for c-levels to follow.
Keep in mind that MSSQL enterprise comes with a lot of tools beyond just a RDBMS. That was always the hangup when I have tried to move companies from MSSQL to something like PG.
I built and managed a data warehouse/internal reporting system for a fairly large telecom. I used ~100 ETL packages built in SSIS to pull in data from systems all over the company, SSAS to process the data and SSRS to build reports. It worked pretty well at the time 10+ years ago.
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:
If anything, I've seen a lot of non-programmers disguised as Java programmers. Armies of them in enterprise teams. A truckload of expense for not much gain.
I'm not saying it's everywhere like that of course. I've met brilliant Java developers when I contracted for SAP.
So how do you deal with such a risk?
If I had to hire I'd search programmers of less popular languages -- and only 3-5 of them. These people tend to be insanely productive and have very good perspective and culture.
I guess the day has come to make use of this feature.
Oracle audits are basically just sales tactics to get you to buy their cloud services so they can turn around and pretend they're a leader in the cloud.
A bunch of their stuff phones home too.
I'm also seeing big stodgy companies getting more comfortable with things like Postgres. It will take a while, but barring some big change, Oracle is headed down long term.
Competitors have gotten a lot better over the last 10 years. Oracle has mostly just raised pricing. It works for a while, but at the current path I don't see Oracle the company existing in 20 years.
So basically they have a shrinking value proposition and they are rising prices. ( Why does that sound so much like Apple, Now I am worried )
Using Apple Pay also makes so much sense for the consumer as it limits your CC data being at every retailer since Apple Pay tokenizes the sensitive information.
If you want to see where Apple is going, checkout the Apple Healthkit API:
While it is too soon to say that Apple will own the market, Apple is the only big tech company that has positioned itself for privacy and trust, giving it the best chance to own this market of the big four.
Not to mention that figuring out the connection strings is so miserably complicated that you basically need a trained expert to figure it out. The docs were worthless.
I think I can spin up an entire blank MySQL instance faster than I could connect to an existing Oracle database back then.
I think you missed the word "new" in there. Amazon finally is cutting ties with its Oracle DB this year. While I won't be surprised if AWS starts offering "migrate off Oracle" as a consulting service, Oracle was still the standard through the 2000s. I think they have built up so much negative goodwill though that no startup would ever consider using Oracle even if they gave the first five years away for free.
If AWS can offer a database that satisfies the Mongo API (DocumentDB), then why couldn't Amazon offer a database that satisfies the Oracle DB API, complete with automatic migration?
The day that happens is the day Oracle stock goes straight in the toilet.
Those things that make working on OracleDB today difficult is what made it so dependable for people with money in the last 20 years.
It also runs on a lot of architectures that today's software is not really running on anymore.
My understanding, and I’m not a lawyer so don’t consider this legal advice, is that you can’t copy a commercial api or it’s infringing on their intellectual property.
Oracle won the last round, Google asked the Supreme court to look at it in January. Guess we'll know some time soon.
I would have to think so many organizations have random scripts, etc. that the risk vs. reward still won still be high er than you think, especially when say the CTO of JPMorgan's job depends on "knowing Oracle."
Personally, I think IBM will likely crash and burn way before Oracle does.
Java is in a rather secure place right now. Everyone that chases the new shiny is long gone but it’s not yet at the point where it is difficult to hire for (e.g. COBOL).
So young buck comes to the CTO and says 'let's do a rewrite in Go' and the CTO says 'why in the world would I want to do that?' Then young buck says 'okay, what about just coding the new frobinator in Go?' CTO still says no, because then he’d have to hire Go programmers and Java programmers or at least waste time cross training. Young buck's less honest compadres have probably gone ahead and put Go into production here or there without permission, but I don’t think that’s a danger to Java.
What really changes this dynamic is when schools stop teaching Java.
Java is what you write in, if what you're selling isn't the code but some service that the code provides, and you aren't a startup, and you can afford a support team and want a lot of devs.
Go is what you write in when you're selling the thing you made directly, like say it's a DB engine, or you're a startup and want low effort support and only want a few devs.
Java makes maintaining a feature easy, and the programmers hired can be average and still be able to make something of acceptable quality, in an acceptable timeframe.
A startup rather wants to move fast. Java is harder to move fast at - but Go probably has that in spades. I do believe Go will not succeed in a large, beaurocratic place. And as a start up grow out to become more and more beaurocratic, the tech transitions with it.
Meanwhile there are lots of frameworks in the JVM world, some of them "heavy" with features, but if you want frameworks that are much smaller, github is overflowing with them.
Kotlin eliminates most of the boilerplate, leaving you with a slimline language, a powerful runtime and a wide choice of libraries. Go doesn't have much to compete with that.
+ or software engineering, etc.
So, basically, companies need to move from Oracle JDK 8 to OpenJDK 11. And pay Oracle until they are done. It's a fair amount of testing and verification for some big companies. Now that it's costing them license money, they'll do it.
Edit: And, of course, many will also be incented to move off Java altogether.
But the OpenJDK is the reference implementation and almost certainly has everything you need. The only reason to use OracleJDK is if you want to buy a support contract from oracle (NB there are companies, including very big ones, that will sell you a support contract for OpenJDK.)
Oregon sued and ended up settling ostensibly for $100 million, but in actuality, it was $60 million in "customer service" and $25 million in legal fees.
Obviously, Oregon's government is culpable as well, but it's another data point to suggest Oracle is a dodgy sales/legal company posing as an engineering company.
Oracle bought Sun in the first half of 2009, completing in 2010. They actually moved to release Java 7 pretty quickly after that, there was a flurry of activity - mostly meant to reassure the ecosystem about their commitment to the platform, I think. After Java 8, new additions like lambdas seemed to have somewhat rebooted the scene. The ecosystem looks more lively now than 10 years ago, in many ways. It’s definitely a better language to work with, it feels rather less “enterprise” than before.
The move to monetize the JDK is annoying but almost understandable as a compromise between the renewed push to evolve the JDK (with yearly releases) and Oracle’s inclination to spend as little as possible on support. They don’t care if some of that support activity ends up generating money for others (via alternative JDKs), they just don’t want to be on the hook for it.
I’m hardly a fan of Oracle (the cloud move is such a fraud), but to be honest I think their Java strategy does make sense. It certainly makes more sense than Sun’s.
I sometimes wonder how much would it take to buy back Java from Oracle. Basically to buy back the Trademark, TCK and the official stewardship. ( Although I have to admit they are doing a pretty good job so far with Java )
Problem is Java is open source , and companies like Google , Amazon , Redhat have their own JVM implementations... So it’s not so much an issue.
In fact it’s the opposite , having to acquire something as big as Java comes with huge responsabilities to maintain it and make it evolve.
Hence these days , Rust and Golang really got popular , it wouldn’t make sense for anyone to buy back Java...
Use kotlin instead!
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.
Joy Covey, Amazon's first CFO, left in 2000 (I believe) and when asked later why she left she said something about the work place being too chaotic and fast paced. She attributed the majority of this work dynamic to Amazon being an internet business.
My point is just that some companies (e.g. Amazon) have work cultures typically understood as less appealing than companies (e.g. Google) with similar growth profiles and thus similar investment value profiles.
Covey, of course, walked out with $200M+ in Amazon stock. So, work culture could be sub par while the company is still "great to work for."
"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."
He’s up about 50% on his Apple investment.
IBM is probably Buffetts biggest mistake of the last decade or so, and he made money on it. He bought shares at $173, sold them for between $150 and $170, but also made close to $30 a share in dividends.
He started buying Apple in 2016 at a little over $100 per share. He’s done well with that investment.
For example one of Buffett's investment chiefs made that AAPL purchase in the first quarter of 2016, either Ted Weschler or Todd Combs. They bought ten million shares initially.
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.
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):
Oracle's stock is at a 5 year high!
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).
Disclosure: I work at SAP (in internal infrastructure though, so I'm not working with HANA).
And yes, Oracle does own Java, too.
That is, awesome for the industry. Not so much for Oracle.
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.
Make it easy to purchase WiFi access and just about everyone will click that box. Once on the plane, just have the customer scan their boarding pass or something to enable the service. Laptop users could be accommodated by entering the usual 6-character confirmation code that they already use for everything else.
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.
- OpenJDK is the name of the JDK developed mostly by Oracle, with contributions from other companies and developers (see the logo at the bottom of the OpenJDK website http://openjdk.java.net/)
- For many years, the JDK offered by Oracle (and Sun before it) was OpenJDK + commercial/free but proprietary features.
- Recently, Oracle has made a big move: they've completed open sourcing the JDK, and opened all of the commercial/proprietary features (those that have not been discontinued)
- To fund Java's development (unlike in the case of .NET, iOS or Android, Sun/Oracle have not controlled their platform's billions-making ecosystem) there have been many monetization schemes over the years: licensing Java for mobile/embedded (the JDK used to have field-of-use restrictions), charging for the commercial features in the mixed free/commercial JDK, and even annoying browser toolbars. All of those are gone now that Oracle has open sourced the entire JDK.
- To keep Java competitive and attractive, and under encouragement from the community, Oracle has changed OpenJDK's release cycle to time-based releases, employing "Chrome versioning." There are no longer any major releases (every 3-5 years), and instead, more gradual, small "feature releases" every six months.
- The current monetization mechanism used to fund OpenJDK is a paid subscription model for what's known as Oracle JDK, which is essentially OpenJDK but offers customers the option to have even smaller updates than the new feature releases, that include just security patches and bug fixes, for companies that don't want new Java features. So Oracle offers the same software -- with no hidden commercial features -- under two different licenses.
Last I checked everybody uses java for everything, especially Google, which then makes it ubiquitous (on Android devices, etc.)
There is now a very aggressive fee structure for using Java SE/JDK in a commercial environment.
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.
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.
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.
What they do mind is that Java stays relevant without costing them a lot of money. By basically offloading support of old versions to others (and/or by getting paid more for that support activity) while they accelerate development speed, they will likely achieve that result.
The alternative is to keep sinking a lot of money in development and marketing efforts, like Sun did; which, in the long term, resulted in slow release cycles and language stagnation, making other stacks more appealing.
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).
What he says around 00:27 about Snickers applies very much to Apple as a brand. This is the only Buffet-ish explanation of why Berkshire would invest in Apple that I could think of.
And apart from this, the decision to buy a lot of Apple stock a while back was made by other asset managers, not Warren himself, and I'm sure was the result of thorough analysis, not based on some offhand comment in an interview.
Also to quote Buffett "If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States". Which I guess attracts him - he's always been into consistent profits on modest capital which Apple is good at.
That being said, lot of Berkshire's bets are now coming from Berkshire's next generation of managers - Ajit Jain, Greg Abel, Todd Combs and Ted Welscher. It is speculated that the decision to buy Oracle has come from either Todd Combs or Ted Welscher.
Todd Combs is also said to be driving Berkshire's investment into Paytm, an Indian e-wallet company which again is a technology company.
It was one of my favorite jobs though, basically a paid vacation. Thanks Larry!
Also, I like that he's buying Red Hat. (He won't hold it long, though. IBM is getting closer.)
what does Apple have on the horizon -- data services? an emphasis on the privacy protecting ecosystem?
where is the new vision?
AMZN on the other hand ...
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.
They could become a good force in the cloud after netsuite purchase.
Health is a privacy sensitive industry and Apple is the only company that has been selling privacy as a core feature.
This is squarely within Apple’s target and they will bet big on it.
Your insurance pays like $3k to wear a heart monitor for a day or two.
Apple has enormous margins to defend. If they cruise for a decade their margins will approach the average margins of the industry because people will no longer pay extra for the brand.
1. Still Growing number of iPhone users, 900M as of the end of 2018. I made a prediction in 2015 / 2016 that Apple could reach the unthinkable ( At the time ) 1B iPhone user by 2020, looks like they are well on course to do that. There will be roughly ~3.5B Smartphone users world wide in 2020. Even if Apple does't grow its user base anymore. Selling to its 1B Customer, which are also the higher spending group, would still be a lucrative business that not many other company could match.
2. Health - When it comes to Health, people don't want to spend money on a brand that that cant trust. So even if company X has an exact replica of Apple Watch with exact software and function, people would still trust Apple and spend 50% or more on it. Also worth mentioning the group of people who cares about health are also likely the one who are passed mid life and has higher deposable income. And health insurance company loves these Data. I am actually surprised at how affordable Apple priced the Apple Watch S4, they could have jack up the price in US purely on the ECG function. ( I have heard many stories about parents want to buy the Apple Watch *immediately8 after reading or watching the Apple Keynote, I am also surpassed how many non-tech people actually do watch the keynote live )
3. Services - It is a growing segment but honestly, even if Apple Attract 100M Apple Music + Apple TV Subs at $20 combined, that is only $6B per quarter, roughly 10 - 15% increase of their current revenue. It is not a huge percentage, but it is hard for Apple to grow when it is so big. I think the future is Apple offering 24+ Months of Financing ( leaving the 24 months for Carrier ) , like 36 / 48 months for iPhone, charged to their Apple Credit Card, Operated and Backed by Goldman Sachs. Bundles along with other high margin product like AppleCare+. This could potentially be the next revenue and profits growth.
4. The Mac and iPad still have yet to show their full potential. There is no reason why Apple could not gain a 200M+ Mac User base. And iPad / iPad Pro still needs to battle out the Education and Pro Segment.