December 22nd, 2008
What Oracle is doing right against open source
Matt (friend of the blog) Asay tells Oracle today to expand its open source strategy, but I want to ask the opposite question, namely whether Oracle hasn’t got the best strategy for fighting open source.
The answer depends on whether you blame its weak earnings for the quarter on a strong dollar and the general malaise or think its failure to make many new sales hint at declining market share.
Matt’s key takeaway is that Oracle should offer a try-before-you-buy strategy to reduce its sales costs, and that makes sense. But isn’t Oracle already doing many things right, in terms of fighting against open source?
Larry Ellison’s strategy of buying up his biggest competitors and application vendors is working. We may think he overpaid, but even if the waterhole is shrinking he’s the big elephant.
This increasingly gives Oracle a lock-in for big customers. Open source competitors aren’t scaled, even when their software is.
Enterprises can turn to open source for small jobs, for one-off projects, but the main system remains Oracle so the company can bide its time and pick off the stragglers.
Oracle has also shown wisdom by going “up the stack,” concentrating on the biggest customers, the toughest jobs. This used to be called a “mainframe” strategy, back when they were mainframes.
Were Microsoft doing a better job serving these biggest customers — if Windows really scaled as its advocates pretend — it might be reaping the same benefits.
I suspect that’s what Oracle’s “Unbreakable Linux” (above) move is really all about. Linux’s strength against Windows really is the data center. Using Linux to lock in those customers further is a smart move.
Of course this leaves the consumer market, even the mid-market, vulnerable. But it’s easier going from the top-down than from the bottom-up, and perhaps Oracle is wise not to take its efforts in that direction too seriously.
Frankly I can’t think of a single proprietary vendor, even Apple, even Microsoft, that is better prepared to face the continuing open source onslaught than Oracle. It’s bigger than any rivals, its approaches heavily-fortified.
It’s not a castle that will be easy to bring down.
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
Subscribe to Linux and Open Source via Email alerts or RSS.
