Oracle looks to the future -- but remains stuck in the past

Oracle OpenWorld seems focused on making existing customers happier -- but how Oracle will attract new developers remains a mystery

You have to hand it to Oracle CEO -- sorry, Chairman -- Larry Ellison: No one can bash a competitor like he can. Unfortunately, while Ellison may have hit the mark with SAP (“I have no idea what runs on HANA, but it ain’t their cloud. That runs on Oracle”), he failed to address his own company problems: an almost complete lack of interest from developers.

At the heart of this profound disinterest? Oracle is still too expensive and complex to deliver what developers want most: convenience.

Can’t teach an old business model new tricks

To be clear, Oracle has significant open source assets like MySQL, and it has been an active contributor to Linux and other projects for a long time. (To be even clearer, note that I am vice president of community at MongoDB, a NoSQL database company that competes with Oracle -- but I'd offer the same perspective if I had no affiliation at all.) 

Oracle’s bureaucracy, however, hasn’t allowed the company to work openly with open source.

As one example, in 2012 Oracle stopped publishing MySQL test cases. While some cried foul, investigation by InfoWorld’s Simon Phipps uncovered something less sinister, though no less obnoxious: “Although the MySQL team is aware this obstructs co-development and is opposite to the practice of most communities, internally to Oracle they have been unable to make the case for community transparency” because of security concerns.

Meanwhile, Oracle is coming under increased fire from the pressures of open source and cloud, with new license revenue plummeting over the years as RedMonk’s Stephen O’Grady highlights:

Oracle revenue

While Oracle continues to make gargantuan sums of money by milking its existing companies, it faces a big problem, as O’Grady notes:

[Charging for software is] certainly getting harder for Oracle. And if it's getting harder for Oracle, which has a technically excellent flagship product, it's very likely getting harder for all of the other enterprise vendors out there....This is not, in other words, an Oracle problem. It's an industry problem.

Oracle’s response to cloud initially was to discredit it. Once that failed, the company has decided to embrace it, this week even going so far as to say it would match Amazon Web Services pricing.

What it has refused to match, however, may be much more important.

All the cloud, none of the benefits

Much of what Oracle is missing was captured by Pivotal vice president James Watters pointed out.

screen shot 2014 09 29 at 9.35.15 am

Pivotal VP James Watters on Oracle

Oracle, in other words, has built a cloud for its existing customers, but not for developers that are building big data, Internet of things (IoT), mobile, and other modern applications. Oracle’s cloud is meant to appeal to its existing customers, which is what makes its promise “You can move any database application to our Infrastructure-as-a-Service ... without changing a single line of code” so strong.

That is, if you’ve already bought into the Oracle stack. The problem is that modern applications aren’t being built on Oracle’s database.

As analyst Dennis Howlett details, as nice as it is that Ellison can point to thousands of back-office applications that run in the Oracle cloud

[J]ust about every enterprise customer we speak with is shifting focus away from the back-office ERP to what they believe are critical business applications, almost none of which are being run on Oracle, Microsoft, or IBM for that matter.

Such critical applications include IoT apps, meant not merely to record business but to actually engage customers and generate new business. For IoT, according to Machina Research, Oracle has a place, but it’s almost certainly MySQL, not Oracle’s pricey database. Even then its role will be relatively small:

The traditional relational database management systems will continue to have a role in the Internet of Things when processing structured, highly uniform data sets, generated from a vast number of enterprise IT systems and where this data is managed in a relatively isolated manner. When it comes to managing more heterogeneous data generated by millions and millions of sensors, devices and gateways, each with their own data structures and potentially becoming connected and integrated over the course of many years, databases will require new levels of flexibility, agility and scalability. In this environment, NoSQL databases are proving their value.

Some incumbents get this. Microsoft, for its part, has embraced open source, delivering a host of open source services in its Azure cloud platform. Despite a hefty SQL Server business, Microsoft has also made credible first steps toward releasing a document database service. It’s doing what it can to build for the future even as it shores up its legacy assets.

Where are all the developers?

Don’t get me wrong. I’m sure Oracle bought itself another few years of relevance with its existing customers that want to move their legacy apps from the data center to Oracle’s shiny new cloud.

But nothing that the company announced has much relevance for developers, the new enterprise kingmakers that keep gobbling up AWS services and building with open source data infrastructure. If the marketing is to be believed, Oracle has made it mind-numbingly simple to move Oracle database applications to its cloud.

What it has yet to do -- and is dramatically more difficult -- is make its cloud or any of its technology easily embraced by developers.

Copyright © 2014 IDG Communications, Inc.

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