The Tighter You Hold on, The Faster Customers Slip Away

It’s human nature; either choose to be a part of the customer’s journey, or get out of the way. It doesn’t matter how good your relationship is, or how attractive the pricing is. If you try to block customers from getting something, they will explore their options. I have seen a lot of occasions where blocking may appear to work in the short run and there may be inertia initially, but technology will change, contracts will expire, and business models will get disrupted.

The current disruption in the relational database space is a prime example. For years, Oracle has been the market leader, but as independent analyst Curt Monash highlights, there are 3 factors threatening this position. Wider cloud adoption and growth of apps such as Big Data are relevant in the context of this article and can potentially make serious dents in Oracle’s market share.

The real threat to Oracle however, is Amazon’s Aurora offering, coupled with the Database Migration Service, which helps customers move their databases to the AWS platform…

As cloud adoption grows, providers like AWS and Google have been offering managed relational databases with open-source engines with services such as Amazon RDS and Cloud SQL for some time now. While Cloud SQL offers the MySQL engine, RDS supports MySQL, PostgreSQL and MariaDB as open source options, and Oracle and Microsoft SQL Server in the licensed variety.

Growth of applications which do not need relational databases is helping NoSQL databases gain ground, with MongoDB and Cassandra widely popular in this category. Oracle has it’s own NoSQL database, but in terms of adoption, it has a fair way to go.

The real threat to Oracle however, is Amazon’s Aurora offering, coupled with the Database Migration Service, which helps customers move their databases to the AWS platform and onto MySQL and PostgreSQL(preview). Aurora was launched in 2014 and has been growing fast. At re:Invent 2016, Andy Jassy stated that more than 14,000 databases have been migrated to Aurora, it is becoming a mainstream option. Google’s recent announcement of the public beta of Cloud Spanner also promises to make this space even more interesting with claims of a “strongly consistent and horizontally scalable relational database”. We’re yet to test this, but Google states that Spanner has been running internally for years, which lends it some credibility.

Oracle’s response was to make Oracle on cloud more expensive last month. They effectively doubled the licensing fee of running an Oracle database on the cloud overnight with one announcement. This might be a strategy to make Oracle cloud look more attractive, but if customers were not scrambling to move off Oracle earlier, this will definitely give them more incentive to do so. Jim Mlodgenski, CTO with database consulting firm OpenSCG seems to agree and is quoted in this article by Ben Kepes; “Oracle’s move here may backfire and have the opposite effect by giving customers a reason — and a sense of urgency — to accelerate their migration plans. Since Oracle’s license policy announcement, we’ve seen an increase in customers interested in moving off of Oracle to other options like PostgreSQL and Aurora.”

As parody commentator cloud_opinion tweeted recently, “a successful business model is your biggest vulnerability because it blinds you from innovating”, and Oracle seems to have fallen into this trap.