I was somewhat shocked by the stellar results Oracle recently reported,
considering the sorry state of the economy. I even called an analyst
friend to find out if maybe there was some house of cards ala Computer
Associated that explained the consistent rise in revenue and margin.
But I was reminded of two simple facts explaining why Oracle remains
Applications drive database sales
Oracle owns pretty much everything
Oracle's acquisition streak has given the company an enormous
breadth of offerings (say what you will about quality of the software)
and the attempt at offering it's own Linux variant gives it an OS
that's passable if not meaningful. But, I don't know that owning the
operating system is important to the growth of sales in applications or
databases. (Note: Matt Asay wrote a very good post about why Ubuntu should be Oracle's Linux of choice.)
Oracle applications and databases have to run on an operating system,
but the operating system doesn't necessarily drive software sales, or
sell databases. The OS may be a point of influence, but doesn't drive
the dollar values that you get from software.
Meanwhile, Oracle has amassed such a wealth of software that it can not
only drive it's own database sales through upgrades and replacements
(JD Edwards or Siebel running on DB2 seems unlikely) but it can up-sell
databases to customers of BEA or any of the other myriad applications
it now owns.
Add MySQL into the equation and Oracle can sell you a database
pretty much anytime for any purpose, to support any application (which
you can probably buy from them too.)
This leads into some questions regarding Cisco's strategy, based on
the idea that hardware should sell applications, as well as IBM's
strategy, where services have often sold software and hardware. The
future is of course a mix of all of these strategies, but it's not
clear that another company is as well positioned as Oracle.
While certainly not unstoppable, Oracle's execution has been very impressive, especially in a down economy.