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The Oracle Syndrome: why there are no big bangs

I was thinking this week about Oracle. You remember them. The big database company that decided that it would be a big packaged applications company and a big middleware company. I have to give them credit for swooping in and buying their way into a leadership position. While it is hard to buy companies and keep them going, in the packaged software arena it isn’t as hard as it looks. For example, customers who buy a PeopleSoft HR application are not going to dump it just because the company was purchased by Oracle. Software is a funny thing — it lingers for decades after everyone assumed that it would be dead. As I always say, old software never dies.

So, what is my point about the Oracle Syndrome? The reality is that Oracle is not about innovation. It is about leveraging a captive installed base. It is about stitching together packaged applications with business process connectors so that one package can send an piece of data to another application.

Therefore, forget about Fusion middleware. Rather than a big bang common platform under all of Oracle’s packaged applications, it is a slow methodical revamping of small components of Oracle’s applications. It will take decades before Oracle could claim to have a common infrastucture under its applications.

I think that this is the future of software. No big bangs. Incremental business focused innovation will be the rule — not the exception. Does this mean that there will be no unexpected innovations? Of course not. There will be innovations that come out of nowhere and transform the world of software. However, they will not be overnight wonders — the most important innovations take years even decades before they mature and change the world overnight.

  1. Glenn Gruber
    November 26, 2007 at 11:07 pm

    I think you’ve got it part right and part wrong. Oracle’s acquisition strategy has put them in a position to bring their customer acquisition cost to about half of the rest of the market. This is what has enabled them to not only increase revenues, but also bolster their profitability above market norms. So you’re right that it’s about leveraging an installed base. That’s why their acquisition strategy is about filling gaps in their portfolio.

    But I would say that you’re not giving them enough credit for the integration of the companies they’ve acquired (roughly 1 per month over the past 3 years including mega purchases of Siebel annd Hyperion). Many times integration kills the acquiring company, but Oracle has thrived in the process.

    About your comments on innovation, I think that your view is too narrow. Fusion as a toolbox is not about innovation. It’s about enabling innovation. I don’t think that any company’s middleware is truly innovative, so I don’t think it’s fair to call Oracle out. The real promise of SOA is to create a more agile environment to meet customer needs more quickly.

    But if you want Innovation, look at the new social mini-apps that Oracle launched as part of their CRM OnDemand product (http://glenngruber.blogspot.com/2007/11/seriously-cool-oracle-crm-ondemand.html). They are really cool.

  2. November 29, 2007 at 5:32 pm

    Re. innovation, I like to think we’ve done some, but probably not enough to be “about innovation” as you say. With 70,000 employees and 300,000 customers, it’s hard to be “about” any one noun.

    We, in AppsLab, represent one pocket of ideas at work, innovation may be a stretch. I came here through Vinnie, so if you read his blog, you might know about us. Check out mix.oracle.com to see one of projects.

  3. Mike Thoma
    December 5, 2007 at 7:06 am

    I think that there are two parts of the software world. The one you’ve alluded to I might call the “maintenance” world. Are people going to modify their existing apps because something NEW or BETTER comes out? Nope. However, on the purchasing edge when you’re going to buy something for a new app (or a new CLASS of apps) I think that innovation can be highly impactful. And hype from marketing guys, analysts and press can have a huge impact on whether the “innovation” is accepted for these apps. I think you’re point might be better called the “CA” syndrome – the software equivalent of the elephant graveyard. I think that innovation changes MARKETS but has a minimal impact on the INSTALLED BASE. E.g. PCs impact on mainframes, browser-based solutions on “client-server” solutions, etc. Innovation impacts purchasing requirements very quickly however.

    Just one man’s opinion after watching too much TV tonight!

  1. November 25, 2007 at 5:03 pm
  2. November 26, 2007 at 3:11 am

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