What is Oracle up to?

Summary:Oracle is reportedly using its extra cash to buy open source mindshare. Is this a smart move or a waste of money?

Businessweek is reporting that Oracle is in negotiations to buy several open source companies including JBoss, Zend, and Sleepycat.

"Oracle is in talks to buy at least three open-source software companies in deals that could be valued at more than $600 million, BusinessWeek Online has learned. The transactions would extend the 18-month, $18 billion spending spree by Oracle Chief Executive Larry Ellison that has engulfed PeopleSoft and Siebel Systems. They would also put Oracle in control of some of the most sought-after open-source projects. Overnight, Redwood Shores (Calif.)-based Oracle would rival IBM as the prime evangelist of a movement that's revolutionizing how software is developed and distributed."
Is the beginning of the end of open source? No, actually this is a validation of open source. Hmm, that's not exactly correct. How about a pragmatic realization that people don't want to pay anything for software. Well, that's closer, but not exactly right either.

Consider what the Internet did to stock trading. You used to have to rely on a specialist to tell you what to buy, and to do the trades for you. Now, most people do their own research and use an online broker. The same thing happened to hardware during the transition from big iron to commodity systems. And now, instead of waiting for some sales rep to tell them what they need, a potential customer has the option to download and try out software they need. There's no need for "price quotes" and contacts and intrusive callbacks when no money is exchanged up front. It's much more efficient and flexible for the customer.

I expect this to dawn on more and more ISVs like Oracle in the years to come. By getting in early and leveraging money made in traditional licensing, Oracle can buy recognized brands like JBoss and hit the ground running. It's not about buying the "community", or even the developers. It's the brand and the mindshare and the time to market that is more valuable.

We, as professional developers, will still have jobs. Money will still change hands. But it will do so at a different place. It will go towards consulting, support, customization, and general peace of mind. The value of the software is not in the bits, it's in what the software can *do* for the customer. How much it can save them, or how much revenue it can generate for them. Customers will pay when they're getting their money's worth.

Other industries figured this out a long time ago, with everything from razors to printers to no-cost mortgages. Red Hat was one of the early pioneers in software. As Larry Ellison says, "We are embracing it. We are not going to fight this trend. We think if we're clever, we can make it work to our advantage." Are you clever enough?

Topics: Oracle

About

Ed Burnette has been hooked on computers ever since he laid eyes on a TRS-80 in the local Radio Shack. Since graduating from NC State University he has programmed everything from serial device drivers and debuggers to web servers. After a delightful break working on commercial video games, Ed reluctantly returned to business software. He... Full Bio

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