Whew. Brad Peters, a former Siebel exec, lays into the much-discussed Oracle quarterly miss:
Regardless of where one sits, though, the magnitude of the Oracle miss is pretty striking. Is it really as much of a harbinger as Brad and others have written? Or will Larry take the appropriate people out behind the barn, and fix the problem? I'm inclined to agree with the general principle that old-school enterprise software vendors are having their business models challenged from multiple fronts. Oracle, so far, has been among the more successful at holding off the barbarians at the gates. But maybe the gates of Mordor are more easily breached than we thought...
Dang, there I go mixing sci-fi/fantasy metaphors again. Are they the Death Star? Or Mordoracle?
Oracle thought it could have it both ways – that is, capture this new SaaS (software as a service) world without having to abandon its aging and hugely successful business of selling expensive servers. And at the heart of this strategy was Oracle’s long-standing practice of upgrading its customer offerings by buying up fast-growing small enterprise software companies and adding their high-profile products to Oracle’s catalog.
This technique has worked brilliantly for many years, despite the fact that Oracle, once it bought these hot companies, typically lost all of their talent and rarely integrated or upgraded their products. The key was taking these new products and leveraging a sales army to get them into the hands of many more customers. ...
Whatever the cause, the reality as those numbers suggest, is that those recent acquisitions should have resulted in a direct improvement in both Oracle’s revenues and profits. Instead they seemed to have subtracted from them. In essence, 1+1 is supposed to equal 2; right now at Oracle it equals .99. That suggests that Oracle’s legendary genius for absorbing acquisitions is starting to break down, or maybe they need a new playbook for cloud. The company’s traditional infrastructure of sales, marketing and legal may no longer be empowering these new arrivals, but rather acting as antibodies trying to destroy or expel incompatible intruders. That’s a recipe for disaster.Of course, Brad is now the CEO of ... you guessed it, a cloud company, Birst, which delivers analytics in a SaaS model. So activate the same filter you use when you see me inveighing against proprietary closed-source software, or Matt Asay making similar points as Brad and finding opportunities for MongoDB ;-)
Regardless of where one sits, though, the magnitude of the Oracle miss is pretty striking. Is it really as much of a harbinger as Brad and others have written? Or will Larry take the appropriate people out behind the barn, and fix the problem? I'm inclined to agree with the general principle that old-school enterprise software vendors are having their business models challenged from multiple fronts. Oracle, so far, has been among the more successful at holding off the barbarians at the gates. But maybe the gates of Mordor are more easily breached than we thought...
Dang, there I go mixing sci-fi/fantasy metaphors again. Are they the Death Star? Or Mordoracle?
We're a small (12M) company looking for new ERP software. It seems that a lot of the software with features enough to suit us (15 users, elaborate, multi-level BOM, configure-to-order as well as distribution/retail), are all going towards the SaaS model. If we were in a major downtown area where lighting fast internet is a definite, that would be fine. However, there's still room for locally hosted software for the rest of us.
ReplyDeleteThanks for your post. Speaking just for my company, xTuple, we continue to believe that one size does not fit all - and that companies will always want to have control over their software investment. And a big part of that control relates to where it lives - the ability to host it locally (or to put it in a "private cloud," to use the current vernacular) is a pretty big deal.
ReplyDeleteOf course, we also make a free version of the product available for unlimited use, publish our pricing, and do all sorts of un-ERP-vendor types of things like that. I hope you'll check us out.
Regards,
Ned
(me from above):
DeleteXtuple is on our list, and I've been playing with the Postbooks to see how well it would work (along with other open-source options). For the most part it's not bad, but I'm still searching for some key features. Maybe a bunch would only appear in the paid versions- hard to tell. I don't have a coder, so although ability to customize later is great, being able to have it work from the get-go is still important. If it's buggy and confusing I will NEVER hear the end of it, and we'll be in quickbooks forever. However, we're pushing its limits.