Re: Looks like I lost my bet - still not sure why
Heres why MemyselfandI...
Remember when Oracle acquired Sun, Oracle came out with an AD in WSJ?
http://www.oracle.com/us/features/suncustomers.html
Theres a great quote in there "We're in it to win it. IBM, we're looking forward to competing with you in the hardware business"-Larry Ellison, and since then, roughly 20% of Oracle's annual R&D has been focused on delivering industry leading hardware, to beat IBM, and of course all the others. So why invest in HW when IBM, HP, Dell and even Intel have been suffering so badly, with eroding margins?
Well, the way I look at it, is basically what Warren Buffet said a few years ago "“In business, I look for economic castles protected by unbreachable ‘moats’.” where he then further said "Make the moat your first priority. Protect the business. Then the profits will come”.
Oracle's "Moat" is its IP and according to Oracle's Fact statement, they have over 400,000 (Mostly SW) customers, where over 300,000 are running Oracle DB. Its clear that before the Sun acquisition, Oracle was atleast 95% focused on SW, but I believe they and Larry of course realized, the only way to protect that SW base, or "moat" in Buffets words, and to protect it from competitors, and for Oracle to continue growing that business would be by defending it from other SW vendors, many of them who sell HW.
What better way to do that then by developing hardware systems, like engineered systems and especially SPARC systems, where Oracle can engineer/optimize/tune this hardware, primarily for its SW, so there would be no other platform that would run that SW as well, nor get the same ROI on that SW, as it would on Oracle HW. Sure choice is still important, and supporting all major platforms, but ultimately, if you run Oracle SW, the only way to get the best performance. best integration, optimization, etc, is running on Oracle HW. And when you run Oracle SW on Oracle HW, you get all the OPEX savings as well-lower maintenance headaches, fewer patches, less tuning needed, integration challenges, support issues, etc.
So if you look at Oracle latest financial reports, you'll see that since the Sun acquisition, Oracle has continued to gain not only in Revenue, but also in margins and profit? Why?How? Because its systems, although slightly more expensive than all those commodity players out there, show a significant price/performance and TCO advantage when running Oracle SW that is optimized/integrated/engineered better for Oracle specific hardware, and so in the end, becomes lower cost. Look at the latest Gartner or IDC reports and you'll see that Oracle is leading in "Integrated Systems" with roughly 50% marketshare, and that Oracle recently announced a 10% increase in Hardware sales revenue while IBM, for example, has been declaring double-digit losses qtr after qtr. Even with SPARC, according to IDC, grew 6%. Heres an article with the details : http://www.computerweekly.com/news/2240216360/Oracle-pushes-Exadata-servers-aggressively-against-IBM-PureSystems.
And finally, we see Fujitsu also heavily investing in SPARC and aligning with Oracle. Why, because customers like choice and options, and having two major investors in SPARC means goodness for ISVs developing for the platform. Kind of like AMD and Intel. Difference is, Oracle and Fujitsu are 100% focused on the commercial/enterprise.
Biting the hand that feeds IT
