Ruminations on the Future of an Icon
Amazon’s recently trumpeted announcement that they have migrated 75 petabytes of data off of Oracle looks equal parts stunt and actual business-driven move.
But the central point is clear: Oracle and its flagship DBMS are no longer the essential software component they once were.
Beyond Amazon’s point that they don’t need Oracle anymore is the point that enterprise doesn’t need it.
Oracle is a big old ship, at a current market cap of $180 Billion. But it's actually fairly tiny when you compare it with Microsoft ($1.07 Trillion) or Amazon ($884 Billion).
Both Oracle and its peers have undergone spending sprees in the face of Amazon Web Services existential challenge. Oracle’s spending has kept it in the game, but it hasn’t necessarily driven proportional benefit.
They have attempted to buy their way to relevance in the face of extreme change to their fundamental means of conducting business. This is a common industry theme (IBM and RedHat, Microsoft and GitHub, etc) in these changing times.
However, the critical factor to see in Oracle’s apparent continued health is that it certainly bought relevance in the SaaS field, but on the other hand, it has lost its position as a critical provider of software that enables other to build applications.
To see the missed opportunity, we could certainly criticism Oracle in a similar vein to what we’d level at Microsoft for it’s handling of dominance in the browser market in the 2000s. Those parallels are not hard to see — and customers remember.
Oracle cloud (IaaS and PaaS) offerings are me-too competitors when faced with AWS, Microsoft, Google and even IBM. And anyway, the cloud-provider market is already being reduced to a competition based on price.
So what can make a company a critical part of the way software is built in the current age? Is there anything like owning the Oracle Database Management System in the 2000s in this day?
Let’s not answer that question just yet. Instead ask another first: Does Oracle have what it takes to pull out of stasis in the post-laurels period of its life?
You can read into the attempts to lean-up and monetize more aggressively Java a kind of uncertainty at Oracle. It once was the undisputed king of the relational database, a critical infrastructure component that virtually every enterprise business required and relied upon.
Pressing its advantage, Oracle relied heavily on recurring support fees that didn’t really depend much on actual performance and racked up enormous profit margins (up to 2000%).
The one-two-three punch of rival DBs, noSQL trend and the cloud dev revolution left Oracle looking flat-footed.
But there is a clear silver lining for the company.
Without question, Oracle is loaded with a wealth of real tech talent and passion.
That is surely its greatest strength, not its cash reserves (event at a whooping $44.7 B USD) or raft of recent acquisitions (including Saleforce for over $1B USD).
Oracle’s combined software experience and know-how deliver the one critical factor that can let it pull out of the pack and tangle effectively with its peers (like IBM) and even the bigger ‘gators in the swamp: excitement and innovation.
These are not fakeable things; it can’t be marketspeak. Oracle needs real, honest-to-god engineers who are jacked up about what they are working on.
And that dovetails nicely with our previous question: how can a tech company make itself not just relevant, but essential?
Same answer, excitement and innovation.
I might speculate as to what the next couple of waves of software ingenuity will look like, but I can promise one thing: it’ll be new and slightly unexpected.
Having watched the industry from the inside for a long time, the one thing you can count on is that the current way of doing things is going to change. Often, that change dumps old ways (like monolithic architecture or CGI, say), and sometimes its twists or layers on top off the old (like IaaS or PaaS).
Whatever companies are focused on being open-minded and harnessing their people and the minds and inspiration drawn to them to best allow them to creatively open up new areas are the ones that will stand out in front.
Oracle (and the rest) had to jump into the cloud provider fray or risk actual oblivion. Everyone had to play me-too. But now that they have all done so, they are all trending inevitably toward equality on that basis.
We’ll know the key question is for Oracle (and the rest): what do you do next?
Matt Tyson is CTO at Dark Horse Group, Inc.