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Oracle and the great innovation debate

Does Oracle innovate or just suck maintenance revenue out of your budget like a vampire?It's a question that has been asked a lot this week and there's a nice back and forth about the topic among Dennis Howlett, Vinnie Mirchandani, Paul Greenberg, Josh Greenbaum and Bob Warfield.

Does Oracle innovate or just suck maintenance revenue out of your budget like a vampire?

It's a question that has been asked a lot this week and there's a nice back and forth about the topic among Dennis Howlett, Vinnie Mirchandani, Paul Greenberg, Josh Greenbaum and Bob Warfield. Oracle spokeswoman Karen Tillman has also chimed in a good bit (guess where she falls on this pendulum). Vinnie, who got a plug by Salesforce chief Marc Benioff on the company's earnings conference call, has the recap of the week

I'm not going to pretend to have a definitive answer on whether Oracle innovates. Frankly, I'm not playing with the products enough to know--although we do run on Oracle systems internally.

Oracle apps: an innovation free zone since 2006?

Meanwhile, you can debate innovation by product. Is Beehive innovative? Social CRM? PeopleSoft? You could spend months nit-picking about innovation when there are hundreds of products to peruse. 

What I do know is that Oracle's business model is innovative for the software industry. Remember when Larry Ellison set out with his "I'm going to consolidate the industry" spiel? Most of us thought he was nuts. A bunch of acquisitions later Oracle is still thriving. 

Ellison's model by itself wasn't innovative (it's really a clone of Cisco's approach) by itself. But for the software industry Oracle's model was quite innovative. The working theory at the time was you acquire a software company and all the talent splits. Years later we realize that Oracle has managed to assimilate these purchases and keep customers. 

My working theory on that former point is that expectations were so low about Oracle's acquisition of PeopleSoft that it was able to position itself for the rest of its purchases. Oracle's takeover of PeopleSoft was predicted to be a disaster in the making. Ellison hired Charles Phillips to keep customers and the sky didn't fall after all. 

From there, Oracle acquired more companies--Siebel, BEA and others--and hit replay. 

That context on the model really frames the innovation debate. Oracle is so massive that it's almost impossible to tally up all the little innovations. Perhaps some Oracle new feature would be a lot more buzzworthy at a startup. Twitter in Web 2.0 land is innovative. To Oracle secure Twitter functionality linked to corporate data is a feature. Simply put, Oracle's innovation, which revolves around processes and a lot of corporate stuff, isn't nearly as sexy--or easy to decipher. 

My bottom line, which is going to look like a total cop-out, is that Oracle innovates in some places but could probably do a lot better. And if customers demand more innovation Oracle is quite capable of delivering--or at least acquiring a company that can.  

Also see:

Oracle CRM - Innovation Free or Innovative?

Salesforce.com: High maintenance costs are pushing customers to us