Sympathy for the Oracle

I used to envy Larry Ellison. But then I had lunch with one of his senior minions, and now I feel a little sympathy. Just a little. :-)

It was actually very educational, because it reinforced for me the power of an open-source sales model, and how it could help Oracle. Oracle kicks tail with sub-$1 billion companies, selling a feature/function value model often winning these deals from SAP. But in the biggest companies, Oracle often loses, and not because it's technology is worse.

No, according to this Oracle executive, it's because SAP builds relationships with executive management at target customers and these CxOs decide for SAP, even when it's the wrong technical decision. Time after time, he talks with the IT executive responsible for the decision after Oracle has lost the sale, and finds out that he was selling to the wrong person.

But surely Oracle could outdo SAP on the executive meet-ups?

Oddly, no, he suggested, because SAP's management exudes thought leadership, whereas Oracle's is more about execution. The prospects want to connect with these SAP executives. As a result, SAP's sales model starts with its thought leadership and ends with a product sale (whereas Oracle takes the inverse approach).

I have no way of knowing how true this is but, if true, an open-source model offers a ray of hope (though surely not the only one, or even the easiest one). Why? Because open source makes it easier to win the bottom-up war. Once one gets to the stage of Red Hat, perhaps it helps to win the top-down war, too (albeit slightly different? Alan Cox exuding technical leadership to the IT staff rather than the CFO/CIO).
Oracle already makes most of its profit on maintenance revenues and, as my friend reminded me, breaks even or loses money quite often on these initial big license sales (because upwards of 100 people can get involved in closing a $1 million deal with a multibillion dollar prospect). So, a low-cost sales model that gets it in the door and sets it up for downstream maintenance revenues sounds ideal.

Is open source a panacea? Of course not. But it sure sounded like a good idea in light of how Oracle prefers to sell and the costs associated with that preference. If only Oracle could adopt the model before it starts getting bumped and scraped by open-source applications and databases. It's nowhere near hurting today, but it could start putting a serious dent on SAP and Microsoft by going on the offensive with open source.

And then we'd no longer need to sing (from The Rolling Stones, "Sympathy for the Devil")...

Please allow me to introduce myself
I'm a man of wealth and taste
I've been around for a long, long years
Stole many a man's soul and faith...
So if you meet me
Have some courtesy
Have some sympathy, and some taste
Use all your well-learned politesse
Or I'll lay your soul to waste.

No, we'd have real sympathy.

Author: Matt Asay

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