Last weekend, Vinnie Maintenance Mirchandani took a calculated swipe at Oracle, describing the levels of innovation from that company as 'anemic:'
Oracle, in my opinion, has forgotten how to develop code. Its top executives are deal makers, not technology visionaries. Worse, when it comes to their acquisitions, they cannot retain or easily replace the entrepreneurial talent. Every person who departs Oracle comments about the mass confusion that comes with such a rapid accumulation of software IP - and Ben [Worthen - WSJ] touches on that also in his article.
To her credit, Karen Tillman, Vice President Corp Communications Oracle jumped in with:
This is something customers want and need, and not everything we release is radically innovative - that's not what customers want. The real strategy that works for customers is to build products that will meet future needs (i.e. Fusion) while continuing to deliver products today that meet their current needs.
Also, want real innovation? Try Exadata. Try social CRM.
Vinnie slams back and then Karen enumerates a bunch of stuff going on at Oracle, topping off with:
Clearly innovation is subjective!
This last point is a good one because the way I read Oracle's definition of innovation - at least according to the timeline on their own website - is as a series of 'firsts.' What is shocking is that list stopped being updated in 2006. You can argue as Vinnie has that Oracle has been innovating by scooping up large chunks of the enterprise apps market. The numbers bear that argument out.
In the financial years 2007, 08 and the first 6 months of '09, Oracle took $8.8 billion in applications software licenses and product support revenue. In the same period it enjoyed profit before tax of $17.3 billion. It also acquired 21 companies that could be regarded as directly related to the applications business if you exclude middleware provider BEA. Including BEA, the total amount added to intangibles and goodwill on Oracle's balance sheet was a net $12.4 billion during that 30 month period. This represents the cost to Oracle of acquiring the 22 companies over and above their book value. At a stretch, you could argue that Oracle has invested this amount in 'innovation.' When you weight the numbers, those acquisitions sure ate up a lot of Oracle profit.
But that doesn't address the more substantive issue about innovation that reaches the customer. After all, isn't that part of the reason behind maintenance and support costs? That's what software companies usually want us to believe.
Karen mentions Social CRM - this is something I have seen at first hand. It's cute looking and while I kinda shrugged - it is after all a relatively simple, if effective mashup - Paul Greenberg credits Anthony Lye, SVP Oracle CRM as a visionary. I'm not going to argue with Paul, he's way too long in the CRM tooth. But is that all we can really point towards with any degree of certainty as representative of innovation coming out of Oracle development?
Oracle has been promising Fusion for years. Each time questions are asked about delivery, the answers become vaguer and vaguer. My sources tell me that as time passes, the Fusion team sees the work needed to integrate the 22 acquisitions and becomes increasingly disheartened.I have no doubt that Oracle has sunk a fortune into making Fusion a reality but isn't it time customers saw something substantial?
Innovation can have many definitions but in the software world in which I live it means presenting something that provides me with a better, more cost effective and/or revenue enhancing way of getting things done. In a recessionary economy that's an absolute must I hear time and again. How then can Oracle justify its place at the buyer's table if all it can offer is a smorgasbord of acquired functionality, much of which is tuck in or required to flesh out incomplete offerings, ageing apps plus something sexy in CRM? Oh yes - and with a 22% maintenance price tag?