Industry can consolidate for billions, or go open-source for free
Oracle has spent tens of billions of dollars buying companies that give it a diverse, rich product portfolio. Such industry consolidation also, not coincidentally, has granted Oracle significant pricing power and a ready-made bevy of customers to which it can cross-sell its products.
I wonder, however, if this is the best way for Oracle to be attracting new customers in a slow-growth enterprise software market.
I've suggested before that open source provides an efficient way to distribute software and attract new customers. No, it currently doesn't generate Oracle-worthy billions in profits, but it wouldn't need to for Oracle to make good use of it.
In MySQL, Oracle bought a fantastic complement to its proprietary database business and, as such, it also acquired an excellent on-ramp to a wide array of proprietary Oracle technology, including its flagship database. Open-source purists might not like such a strategy, but it is the very same strategy that MySQL was pursuing before it was acquired by Sun, and which it continued to espouse post-acquisition.
Let's just say that Oracle is likely to get more bang for its proprietary buck than either MySQL or Sun could achieve.
Oracle, of course, isn't alone in standing to reap benefits from open-source "on-ramps" to its proprietary products. IBM has been working this strategy for years, and to great effect. I think we'll see Microsoft adopting this approach for some of its products soon enough, too, especially as its Windows client business loses pace within the company and it seeks ways to spruce up adoption.
An open client that feeds into closed cloud offerings seems like a great strategy, and it's one that Microsoft is already mimicking with its SharePoint product.
Yes, these companies could spend billions acquiring competitors and complementary product lines so as to achieve economies of scale and sale, but they could also discover the ease of distribution that open source offers. It's a lot cheaper and could prove equally or more effective.
Follow me on Twitter @mjasay.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
It's like you're a free Political Action Committee on behalf of all the open source companies..
What does it feel like to give
why don't you stop being a reporter and start being a real developer.. if you believe in it so much?
otherwise, please stop with your banter / crap about how holy open source is.
It's full of bugs.. doesn't perform as well as a $2000 piece of software from MS... so the ROI is _NOT_ in mySqls favor.
thanks for **** and provide impartial reporting
-Aaron Kempf
Ironically, this post will get me in trouble with the open source zealots you proclaim me to be. Are you not following along? "Proprietary" is not "open source." So when I talk about adding the two together, well, that makes me something less than an open source bigot. Or more. You decide.
Just try to keep your comments actually relevant to what I write.
I have an idea for you. Don't read this blog.
Is that bloody genius or what?
I don't know what world you're living in, or what you're smoking, but please share with the rest of us.
All that said, you can't get a better commentary on the State of the Union in Open Source, if youa re able to stick around, you will see that he has cutting edge insight.
I think I very clearly point out that Oracle can sell its proprietary software on top of open-source complements, and thereby get added market reach for lower cost. What is there in that - my actual thesis - that you disagree with? Please don't make weird arguments about posts I didn't write....
Open Source is a great on-ramp to other products. It is a no brainer and it works well.
Often companies give something away for free and can up-sell from there. AVG is a perfect example of this.
Snake oil salesman sell colored water. Open Source is very valuable and useful to the IT ecosystem. I think your analogy FutureGuy is very wrong.
DrtyDogg figured it out. Too bad most of you didn't.
The title of this post should have been "Alfresco -- the onramp to Freedom" or "Whaaa! Oracle is going to screw up my free database lunch"
We were talking at work today about outsourcing and how people have this misconception that if they send a project overseas that it will be built by a crack team of experts (and for so much cheaper!). In reality it's always a mixed bag of good developers and bad ones no matter where the work is done unless you can find the right team. The same goes for software: open or closed doesn't really mean much in terms of ROI or meeting the business need. It all depends on finding the right product.
I tried outsourcing, I tried many times in fact. I could not find someone 'cheap' that had any talent Oh they would claim they did, but they would struggle for days on a simple task, I would do it for them, they would struggle for days on the next task, I would do it for them. Finally I would have to say, look, I'm doing the work.
It's silly I'm a mid level programmer at best. In the states, I've met all kinds of programmers who could do much better.
In the end, I'd even go so far as to say its cheaper to higher a crack programmer in the states, than to bother with the costs of outsourcing: the project delays, the poor quality work, the never ending search for new talent to replace the people you have to fire.
Because I'm fairly good at Russian, I even went so far, as to look into the vaunted 'Russian hacking' scene. What a bunch of script kiddies...arrogant, requiring project control...but ultimately not very skilled either.
I've decided what it must be is that in the U.S. people grew up with computers, its second nature to some people. Plus its the culture of innovation that helps too. In other countries, they got limited access to computers at universities and they strongly believe in doing as they were instructed, rather than inventing, and it really limits them.
But beyond that I don't see much point to it. The fact is, in many business circles, as ashame as this is, they judge quality on price. If it costs a lot, it must be good, if its free, it might be amateurish.
A lot of people making technology decisions aren't real developers, they don't understand technology at that level....what they know often comes from the sales people that advise them...those sales people almost always pushing an expensive product, and rarely pushing something that is free, for obvious reasons.
Red Hat has partially addressed the issue, by charging for the open source software, but they are relatively small compared to closed source interests.
- by Renegade Knight June 24, 2009 7:24 AM PDT
- SUN recently had the vote to allow the purchase by Oracle. I voted not. If I'm lucky (and I'm not expecting to be) the vote will be a resounding no and Sun will remain a viable independant company who will hopefully go on to make me a lot more money than the Oracle deal would ever do for me.
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