It has been a tumultuous but interesting 2009 for Oracle. The company made perhaps its boldest acquisition to date in trying to buy Sun, followed by the torturous and still ongoing investigation of that deal by the European Commission. It delivered (or at least showed off) some long overdue applications such as PeopleSoft 9.1, Primavera project management software and its Fusion Applications and Release 2 of its flagship database –...
the latter not so overdue. The company steadfastly stood by its 22% maintenance fees despite continued resentment from some corporate users, and its feisty chairman stubbornly, if not humorously, refused to acknowledge the term cloud computing in a couple of public forums.
Here is our list of what we thought were the top nine Oracle stories for 2009.
1) Oracle acquires Sun Microsystems
The Sun acquisition was the easiest choice, but might prove to be the most difficult for Oracle to ultimately pull off. One would hope that executing the new strategies of the combined companies will be easier than getting the deal approved. Most believed that once the U.S. Department of Justice green-lighted the acquisition, the new company would be unleashed and out competing in short order. But the European Commission had major reservations about Oracle taking over the MySQL open source database. On September 3, the EC announced it was launching an investigation into the deal based on fears that Oracle would shelve MySQL and instead double down on its own higher-end proprietary database, thereby limiting users’ choice. But finally, in just the past week, Oracle has made several assurances to the EC that it would support and invest in the MySQL product line for the next several years, which seems to have chilled out the EC’s concerns.
When and if the deal is approved, and the EC’s three-month-plus investigation hasn't done too much damage to Sun’s server hardware lineup, the deal should catapult Oracle up to one of the two or three most essential IT companies on the planet.
2) Fusion Middleware 11g makes its debut
One of Oracle’s biggest middleware announcements of the past few years was its mid-year unveiling of Fusion Middleware 11g. It was notable because of its long-awaited features, such as better support for SaaS and cloud computing flavored applications, thereby pushing the product line into the modern age. It was also notable because the new series will function as a “convergence layer” sitting in the middle of an integrated stack of Oracle and, eventually, non-Oracle products. Version 11g is one of the pieces that will allow Oracle to more aggressively sell ‘pre-fab” integrated stacks of software.
3) Another year of Oracle users not revolting over the company’s 22% maintenance fees.
OK, so this is the biggest non-story of the year.
There was the usual grumbling in 2009 about Oracle’s sky-high maintenance and support fees, but once again users hardly had a Boston Tea Party moment over it either. Corporate users may not be able to do much about getting out of their contracts, but it is rare for a company whose contract has expired to dump Oracle products in favor of a competitor’s specifically over the maintenance fees. Even arch-rival SAP, which charges 17% for maintenance, doesn’t seem to pick up a significant number of Oracle defectors. (SAP has balked at raising its fees to 22% this year after its own customers revolted, although it says it will revisit that decision next year.) Most users say they pay the 22% not so much for the maintenance of their products but for the frequent upgrades they need. In fact, many complain that the technical support isn’t all that great.
Once the European Commission takes off its shackles and allows the combined Oracle-Sun to move out into the market, Oracle will have many more revenue streams and so may not be so dependent on maintenance to keep it profitable. Could it lead to a lowering of maintenance fees in 2010? One can always hope.
4) Oracle finally debuts its Fusion Applications
After years of yakking about it, Oracle finally pulled back the curtain to unveil its Fusion Applications suite. Users will have the choice of mixing and matching Web-based financial management, sales and marketing, supply chain management, and governance, risk and compliance apps with on-premise applications such as E-Business Suite, PeopleSoft and Siebel. How smoothly that process will go remains to be seen, but don’t expect to know that until late 2010, according to some analysts.
5) The rise of Thomas Kurian
With Thomas Kurian taking over the duties of Charles Rozwat, the former executive vice president of product development, Kurian now has control over both all middleware and applications products. He just might have more influence over the strategic direction of Oracle’s core products than anyone inside the company except, of course, Larry Ellison. Given Kurian’s inclination toward stack computing, it is one more confirmation of how Oracle plans to compete in the market over the next few years.
One question some have is whether Kurian will push an all-Oracle stack over products that support various third-party infrastructures and applications. We may not get an answer for another year.
6) SAP and Microsoft gang up on Oracle in the BI market
SAP decided to get some help in its fight against Oracle in the business intelligence market, signing a deal with Microsoft which pledged support of SAP’s Business Objects Planning and Consolidation application on Microsoft platforms. Whether this is the start of a trend with SAP and other major software-only competitors of Oracle remains to be seen. But with the European Commission looking as if it will bless the Oracle-Sun union, turning Oracle into an IT superpower, it may not be a bad idea for these competitors to align themselves with some big brothers to help with ambitious (and expensive) cloud computing and more ambitious SOA-based initiatives.
7) Oracle ships 11g Release 2
After 15 million hours of testing Oracle delivered the updated version of the product that keeps the lights on at Redwood Shores – Oracle 11g Release 2. The updated database had 200 new features, many of which were received well. The question remains: What will convince users to upgrade now rather than later? In the two years since it shipped Release 1 of 11g, only 10% to 15% of the company’s mammoth installed base had made the leap to the 11g code base. Just how much extra IT shops have in their budgets for 2010 may have as much to do with people upgrading as any or all of the 200 new features.
8) Virtual Iron acquisition
Oracle made headlines when it acquired virtualization software vendor Virtual Iron in May. It then proceeded to make even bigger headlines when it announced in June it would discontinue the Virtual Iron product line. With Oracle continuing its decade-long acquisition spree, what made this purchase so significant?
With the acquisition, Oracle appeared to be gravitating toward a new customer base, given that Virtual Iron’s caters to small and medium-sized businesses. This seemed to be a good thing because it gives Oracle more muscle in a market that figures to grow significantly over the next few years and where it will face stiff competition from VMware, Citrix, and Microsoft.
9) Oracle rolls out a revamped Beehive collaboration platform When Oracle introduced its Beehive collaboration platform at OpenWorld in 2008, it was promoted as a central platform for bringing together everyday functions such as email, calendars, conferencing, Wikis and a number of other tasks. Many were skeptical given the competition the company faced from IBM and Microsoft, which have had competitive offerings for years.
But in May of this year, Oracle revealed a new version of Beehive, peddling it as a more centralized approach than the distributed offerings of Microsoft and IBM. One of its more interesting features is Web-based Team Workspaces that can be accessed by individual teams. The revitalized version was one of the more under appreciated offerings of the year.