Is Oracle becoming an 'evil empire?'

Is Oracle becoming an 'evil empire?'

Summary: Oracle's pursuit of Google for alleged patent violations has opened the door to accusations of Oracle as 'evil.' Is it true and if true are customers allowing that to happen?

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TOPICS: Oracle, Microsoft
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In the late 1990's and early 2000's Microsoft was the company we all loved to hate as it fought and lost claims of monopoly. The mid 2000's was the period where Google's 'Don't be evil' mantra came back to haunt it. As we move into the 2010's is Oracle picking up that dubious mantle? If so I wonder about the potential impact on the enterprise landscape.

The Oracle v Google lawsuit has set many tongues wagging, mine included. At stake are issues that polarize developers, buyer and sell side advocates but which speak to broad issues of importance in enterprise land.

The financial dimension

If we focus on the purely financial aspects, some see the lawsuit as a logical development of Oracle's long term strategy: acquire and leverage assets as best it can. Viewed through that lens, it makes perfect sense and is to be admired. Oracle is not a charitable organization but accountable to its stakeholders, which often appears to be narrowly defined as representing its shareholders. They rightly demand a return for their investment and Oracle does all it can to avoid disappointment. Unfortunately, life rarely comes in a single dimension.

In the post(?) recessionary 2010's, many are questioning the definition of 'stakeholder.' (PDF link) For my part, I take the position that stakeholders should actively embrace the concept of sustainable business but even then definitions become troublesome (PDF link ) when considered alongside the current fashion for CSR. In IT developer organizations I take that to mean a demonstrable commitment to reinvestment as part of a relentless focus on delivering customer value.

Reinvestment and customer value. Those are terms requiring careful definition and even then are debatable. Oracle says that its financial results reflect its focus on customer service. But does it? If you agree with Bob Evans, then Oracle has an unsustainable business. He takes the position that so much of Oracle's profit depends on its maintenance revenue stream and that it is playing a dangerous game of 'chicken:'

...it is also possible that Oracle customers feel that at this time they don't have viable options to switch away from Oracle, and that while they are frustrated by the 22% fees and do not feel they're getting good value in return, the lack of options is forcing them to bide their time.

From many many conversations with CIOs, I believe this latter scenario is the real story. If that is indeed the case, then Oracle's playing a dangerous game of "Chicken," hoping that no viable alternatives emerge in the near term while dawdling its way along with its own leisurely cloud initiatives, which are most unlikely to provide the fantastic financial returns that the on-premise model currently does.

Oracle could easily counterbalance any revenue hitch by taking its foot off the marketing gas. Yet the IT industry seems dependent upon the relationship between revenue and marketing as a way of driving long term maintenance. It's a Catch-22 with no apparent get out of jail card.

My erstwhile colleague Vinnie Mirchandani regularly bemoans the fact the enterprise IT industry seems set on a course that puts less store on genuine innovation designed to improve value and more on pleasing Wall Street. He views the drifting down of R&D and stubbornly high GS&A numbers as evidence. It is a point well made. However, Oracle scores high marks for its financial probity, something few other tech vendors seem capable of matching. One argument might be: go after the slouches rather than pouring scorn on Oracle. I'd much rather Oracle set the bar higher by accelerating innovation. The long term wins would be huge for everyone.

Vinnie will also tell you about the cost of printing as evidence of how customers are being taken for a ride that makes the price of perfume or champagne look cheap. Not that it seems to make any difference to broad buyer behavior. But more of that later.

The roll up power game

Nothing more graphically illustrates Oracle's acquisition history than the following graphic - courtesy of Stephen Jannise.

It demonstrates how Oracle has used its financial muscle and massive cash flow to roll up large parts of the IT industry as part of a broader strategy that harks back to the days of Tom Watson's IBM and the single stack play. Is this 'evil?'

History teaches that when IBM tried to play the stack game it came unstuck. The same need not be true for Oracle. In IBM's day, it was the global Big Dog that got too close to the firepit of monopoly regulation. Oracle will argue that despite its acquisitions, the market across each of the stack categories remains competitive. It will also argue that if it was acting in monopolistic fashion then regulators would not allow it to pursue its course.

I regard that last argument as flimsy. I have yet to see any evidence that regulators have considered Oracle as a whole, preferring to view each transaction on isolated merits.

It is only after the event that things become clear and of course by then it is too late. Check this alleged leaked memo from Oracle about its intentions for Solaris. The key point: From a business perspective, the purpose of our investment in Solaris engineering is to drive our overall server business, including both SPARC and x64, and to drive business advantages resulting from integration of multiple components in the Oracle portfolio. This includes combining our servers with our storage, our servers with our switches, Oracle applications with Solaris, and the effectiveness of the service experience resulting from these combinations. All together, Solaris drives aggregate business measured in many billions of dollars, with significant growth potential.

Anyone doubt that Oracle has a clear domination strategy? Of itself, that doesn't make Oracle 'evil.' What is worrisome is the presumption that a stack play IS the best choice. We can have a 'best of suites' and 'best in class' discussion all day long but when one provider controls enough of the stack to make a persuasive buying argument then you have to wonder whether competition just took a dump while vendor lock in just scored a winning goal.

Does it matter? That depends on a range of factors. Examples include:

  • If one vendor's control is soaking up a large chunk of your IT budget then you have to ask whether the risk of their applying pressure in one direction might have a knock on effect on another?
  • What happens if they fall behind when you need to accelerate technology change?
  • What happens if they fail to deliver on technology upon which you have made plans?

If you are in the camp that is prepared to make the one size fits all judgment call and your vendor doesn't deliver as you anticipated then you might well consider them 'evil.'

Oracle Fusion has been promised for so long you have to wonder if it will ever be delivered. In 2009 we were promised 100 days of innovation. Some of us sarcastically parsed that as 100 days of press releases. Looking back, I don't recall 100 days of anything substantial beyond the middleware announcements. Rumor has it that Oracle Open World will see the announcement of an imminent release of Fusion HR but there are big questions around capability and what that means for eventual PeopleSoft replacement for those customers thinking of moving on.

Open source anyone?

When Oracle announced its intentions to buy Sun plenty of people expressed concern about the future of Java as an open source language. Did it stop anyone from continuing to write Java code? Of course not. Is Oracle's future tied to Java? You bet. Now that Open Solaris has been canned, many will be wondering (again) what's next for the open source chop.

Whatever anyone might think of Oracle it has been careful not to directly antagonize the open source community. Or has it? Returning to the Oracle/Google lawsuit, it has got people head scratching and thinking that open source is under attack.

Stephen O'Grady knows a thing or two about open source. He also knows a thing or two about licensing issues. His exhaustive examination of the lawsuit concludes with:

Whatever the real reason, this is a surprising decision even for a firm as aggressive as Oracle. The only thing more surprising is how quickly it turned Google – excoriated around the web for their questionable net neutrality proposal with Verizon – back into the good guys. Even if you speculate about differences in Oracle’s evaluations of its own assets – that Oracle believes that Java has peaked in popularity, for example, and that this is a one time opportunity to cash in on an asset that must, inevitably, decline – the calculus of this move fails. Nothing in Oracle’s product roadmaps hint at such a realization. Nor would a one time windfall, however large, be sufficient to offset the costs of a significant decline in Oracle’s Java related products.

As for predictions, I’ll make only one: whoever wins will also lose. This suit is going to negatively impact – probably substantially – Java adoption. The enterprise technology landscape is more fragmented by the day, as it transitions from .NET or Java othodoxy to multi-language heterogeneity. Oracle’s suit will accelerate this process as it introduces for the first time legal uncertainty around the Java platform.

And therein lies the rub..."whatever the real reason" At this very early stage it is hard to know and Oracle isn't telling. It could play the good guy by making its intentions clear but it is the opaqueness that gets everyone fretting rather than the direction. I've tried several times to get Oracle to speak but it chooses not to do so. At least not with me. That should not be a surprise since I would almost certainly take a partisan position where it would prefer objectivity.

Anything that Oracle does which is perceived to be an attack upon open source will get tarred as 'evil' but would enterprise organizations care? That's an interesting question.

Last week I was asked whether there was much demand for open source databases in SAP environments. Not as far as I can tell. SAP entered into an alliance with Oracle a long time ago that is thought to provide Oracle with over $1 billion in database revenue each year. That's significant. In talking with end user organizations three things emerge:

  • The investments in database are too large to rip out
  • Who will support an open source offering?
  • Are open source databases sufficiently mature for us to risk our business upon them?

The use of data is so important to business that once an investment path is taken it is extraordinarily difficult to consider alternatives without exposing high cost and risk. Now that Oracle 'owns' MySQL would it open a support business for that database as it did with Red Hat Linux? The short view would be no unless it fancied opening the door to validating MySQL as capable of running Oracle Apps in any environment and potentially eviscerating its main income stream. The long view might see a different tack where Oracle could lower cost to a new class of mid-range customer. On the maturity question, it all depends. For the large enterprise buyer, Oracle DB or SQL Server are almost no brainers. That doesn't make Oracle any more 'evil' than Microsoft. It just means organizations have voted with their wallets.

So Oracle's not 'evil' then?

To say that Oracle is a tough competitor is a bit like saying Mt Everest is tall. It has set the tone for much of what defines the Silicon Valley business ethos. As an outsider, I find that at once both thrilling and uncomfortable. I am thrilled that there is so much invention and innovation arising out of the Valley but am less comfortable with Oracle's tactics. Too often the company seems bruising and unnecessarily aggressive. The general tone of conversation with customers suggest it creates a level of discomfort that impacts customers' ability to sensibly negotiate deals. On the maintenance issue there is no negotiation as far as Oracle is concerned. Hands up those buyers that think that's a great idea?

Infoworld asks the 'evil' question in the following terms:

Such evildoing rivals a monster round of Goldman Sachs bonuses. But does Oracle in the archvillain role have legs? Outside of the tech world, nobody hears much about Oracle apart from its acquisitions: PeopleSoft, Siebel, BEA, Sun. Otherwise, Oracle keeps a pretty low profile for a $113 billion company.

Messing with the popular Android consumer play changes that a bit, particularly if the lawsuit drags on for years in the public eye. And there's plenty more, beginning with the Sun acquisition and subsequent brutal layoffs. That's part of a pattern: Around Silicon Valley Oracle is known as the Bermuda Triangle of predators, devouring all sorts of companies with promising technologies and being less than gentle with their personnel. Throw in a combative CEO, exorbitant software maintenance fees, and a hardball company culture, and might we have a winner?

Infoworld thinks not, believing that Oracle plays in a barren category that's no longer that interesting or stuffed full of Big New Ideas. I'm sure that will please the execs at Oracle no end. However, assuming that 'evilness' does not apply to less fashionable categories is a logically flawed argument.

Martin Luther King once said: "He who passively accepts evil is as much involved in it as he who helps to perpetrate it. He who accepts evil without protesting against it is really cooperating with it. " In IT terms, too many times customers fail to stand up for their rights and then wonder how things went wrong. When we call out Oracle for one thing or another we should at least recognize that customers are often complicit in allowing the company to get away with something we see as distasteful.

When SAP tried to impose a 30% price rise in the teeth of the recession, some of us protested loudly and frequently. That drew attention to the problem and made us a thorn in SAP's side. But it was only when customers realized they have genuine bargaining chips that things started to change. It's a lesson from which all large software companies should learn.

Topics: Oracle, Microsoft

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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29 comments
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  • the evil crown has been taken by M$

    and it will take to GPLed the windoze code to pass it around.
    Linux Geek
  • RE: Is Oracle becoming an 'evil empire?'

    Oracle has always been evil.
    Bill4
    • I'll second that

      @Bill4 Nuff said
      happyharry_z
    • RE: Is Oracle becoming an 'evil empire?'

      @Bill4 Yeah, exactly. I think them tackling Google over Java is a given, and I find it really hard to feel sorry for that other "big evil" the big "G". This is like "nasty vs nasty".
      Jeremy-UK
    • RE: Is Oracle becoming an 'evil empire?'

      @Bill4: Agreed. Even if you buy Oracle licenses at massive discounts, you still get to pay 20% of retail in support contract fees. (wish Postgres would get up a similar feature set, so we could ditch fscking Oracle once and for all... *sigh*.)

      Funny thing is, this isn't an open source issue. This is all about Java ME (which ain't GPL'd, or any other open-source licensed).
      Random_Walk
  • RE: Is Oracle becoming an 'evil empire?'

    Becoming? :)

    What part of "Larry Ellison is a wanna-be Bill Gates crossed with a rabid pit viper" do you not understand? Look at the hostile takeover of Peoplesoft to understand the man.
    wolf_z
  • Yes, it is.

    Now what?
    ejhonda
    • RE: Is Oracle becoming an 'evil empire?'

      What next is whetther Google is becoming the top evil empire surpassing MS and Oracle.
      nktran19@...
  • Just two thoughts...

    Two thoughts crossed my mind when I heard about the suit. #sustainability and #competition

    #sustainability: From my point of view as a Software Architect the biggest asset of Java is its community. The broad adaption of the development community is vital for any platform as w/o any great apps its a lost cause anyway. The community will watch this "heavy-weight" event closely I'd assume...

    #competition: the laughing third could be Apple. From a technical perspective probably HTML5 as the next universal platform, maybe? Interesting times ahead...
    matthiassteiner
  • A different kind of evil

    Oracle is full of a-holes. They're stroking their ego. The end result feels familiar but it's a different psychology than say the psychology of Bill Gates when MS was steamrolling everyone.

    In another life they would be lawyers and/or snake oil salesmen.

    -M

    PS: Though some would say any Oracle sales person is of the "snake oil" ilk.
    betelgeuse68
  • RE: Is Oracle becoming an 'evil empire?'

    To everyone: I took a specific line that some might view as too neutral. If you're going to say 'evil' gimme the proofs. I could easily have taken the 'Oracle is a bunch of evil a-holes' and had a lot of fun in the process. That's too easy.

    In the end its only when customers vote with their wallets that things change. I doubt even Oracle would want to go to war with its customers.
    dahowlett
    • RE: Is Oracle becoming an 'evil empire?'

      @dahowlett Same could be said for Google. Every iPhone fanboy labels them as "evil" just because they worked out a deal with Adobe to port Flash to Android.

      I mean, we're getting our tail up in a bun over a single lawsuit. If Oracle does anything to hurt FOSS beyond that, we'll know. Until then, lets wait and see what happens.
      ZackCDLVI
      • RE: Is Oracle becoming an 'evil empire?'

        @Zc456 OK let's just look at Google's position on Flash shall we?<br><br>Google are supposedly all about "openness". So what the heck is it with Flash? It's proprietary, closed. Google are all about indexing stuff. You can't index Flash. So why does Google love Flash? Because it's a stick they can beat Apple with never mind the fact that it's diametrically opposed to everything they say is important to them. Is that not evil?<br><br>Or working with the Chinese government to keep information out of the hands of the Chinese people?<br><br>Or<br><br><a href="http://www.theregister.co.uk/2010/08/18/google_adwords_house_ads_conflict_of_interest/" target="_blank" rel="nofollow">http://www.theregister.co.uk/2010/08/18/google_adwords_house_ads_conflict_of_interest/</a><br><br>Or<br><br><a href="http://www.theregister.co.uk/2010/08/16/schmidt_wsj/" target="_blank" rel="nofollow">http://www.theregister.co.uk/2010/08/16/schmidt_wsj/</a><br><br>Or the whole "Net Neutrality" nonsense, "we believe in that, except when we we're getting preferential treatment".<br><br>ARGH! How much more evil do you want?

        Update: Google are promoting Android heavily on the back of it's ability to play Flash content. However, the closed nature of Flash and the central role it's playing in their marketing are at odds with what they themselves have said about the importance of open standards, and especially what they have said about Android and open source. These things are just not compatible positions, you can't have your cake and eat it. You're either pro open standards and possibly open source or you're for Flash. Is Flash necessary to the functioning of the web? What do we use Flash for (no really)? Games (and Google themselves have shown we don't need Flash for that), Video (youTube - Google's own video sharing site, shows we don't need Flash for that), Ads (Watch those Ads get converted to iPad/iPhone friendly alternatives as the use of those devices climbs), and Navigation (the would be better done with HTML; we could at least bookmark it, and Google could index it!!!). So do we need Flash? No. I use systems that have Flash blocked, the sky doesn't fall in. The iPad seems to manage just fine.

        You said: "Just because a company believes in open source, doesn't you should forbid proprietary software when it's needed." - Well it's not needed, and more than that you should seek an Open Source alternative especially when it's central (as the marketing would have you believe).

        You also completely ignored the other points... I think you'll see "Don't Be Evil" just doesn't fit.
        Jeremy-UK
      • RE: Is Oracle becoming an 'evil empire?'

        @Jeremy-UK Google doesn't own Flash. So it isn't their responsibility. Now I don't think they love it, only that it is needed, otherwise they wouldn't be promoting HTML5. Further more... IT'S JUST A PLUGIN!!!

        Just because a company believes in open source, doesn't you should forbid proprietary software when it's needed. That is if you can afford it and vise-versa.

        As for the Net Neutrality shit, yeah, it does draw some concern. However, for now it doesn't effect me since Verizon isn't my ISP. So why should I care?
        ZackCDLVI
    • RE: Is Oracle becoming an 'evil empire?'

      @dahowlett Err, have you actually seen how they price their Database? You got a system they categorise as "RISC"? They actually charge you more to run their software on faster hardware - think about that for a minute. If I have a fast computer they want me to pay more for their product...
      Jeremy-UK
    • RE: Is Oracle becoming an 'evil empire?'

      @dahowlett: Just one problem... well, two problems:

      1) Oracle's customer base is (more often than not) enterprise-level corporations, folks whose purchasing decisions are made by PHBs and starry-eyed marketing, not by technical merit.

      2) Not too many enterprise-level suites that don't say "Oracle" or "SQL Server" as a requirement...

      2a) ...and of those two, only one of 'em has the chops to stand up to some very punishing workloads, have near-perfect uptime, and provides some very solid HA (hint: not SQL Server).

      ...until you can fix those three, no enterprise-level PHB will even think of going to a non-evil DB solution.
      Random_Walk
  • RE: Is Oracle becoming an 'evil empire?'

    No. They are not even an empire. They are a niche player in IT, though it is a big niche.<br><br>Their ambition is to survive and make money, as it should be. The Sun business model did not work and they were absorbed. Oracle paid a good sum for Sun, and need to monetise Sun's assets.<br><br>Google, on the other hand, has been eulogised by the geek community, but does not deserve it. They are trying to fork the Linux kernel and mobile Java for their own purposes. On top of that, their accumulation of personal data on billions of people around the world makes them the most dangerous organisation in the world.<br><br>If you are looking for the real "evil empire", look at Google.
    jorjitop
    • RE: Is Oracle becoming an 'evil empire?'

      @jorjitop If you use Google Apps you are exchanging value. They give you free apps, you give them your attention data. The ToS may not be the best written in the world but they are clear on that point. If people don't bother to read the ToS then is Google to blame? <br><br>I've written 3-4 times that Google's ToS need careful attention. Other than the few 000 people who read my stuff, does anyone care enough? That is the bigger question. That's why people like myself make these points in the hope that customers with commercial concerns will say something. Sadly, most don't.
      dahowlett
  • Typo

    Dennis,

    There's a typo in your post. You wrote "Open Source" when you wanted to write "Oracle Source" :-)
    Zoli Erdos
    • RE: Is Oracle becoming an 'evil empire?'

      @Zoli Erdos - gutted.
      dahowlett