In a recent article from Kevin McLaughlin at The Information, it was reported that Amazon and Salesforce each have major initiatives in place to move off of Oracle products and services. This news story was picked up by many different sources and became a bit of a firestorm for Oracle. CNBC, Marketwatch, and Yahoo all reported on the same story. In fact, Oracle’s stock took a hit when this news broke. The report was so noteworthy that Oracle’s Senior Vice President of investor relations, Ken Bond, sent a note to investors calling the report “stupid stuff.” (Maybe Washington etiquette is having an effect on him?) With all the press and all the noise, what is the truth? Are customers moving off Oracle or is this report just “stupid stuff?”
Oracle has built an amazing business model where customers, despite their financial situation, spend more with Oracle every year, and are often trapped from leaving by onerous contracts and policies. The fact is, many Oracle customers are extremely frustrated with Oracle and do in fact WANT to leave Oracle. This is nothing new. Oracle’s ridiculously complex contracts, vague policies, super aggressive sales teams, and even more aggressive customer audit team (License Management Services, or LMS) have pushed their customers to the brink. Palisade Compliance has clients all over the world and the frustration with Oracle is at a fever pitch. If CIOs could move off Oracle tomorrow, many of them would.
This frustration with Oracle is really nothing new. Oracle customers have been complaining about the vendor for many years. I worked at Oracle for 16 so I know this is nothing new. Why is this time different? Why is this getting so much press? Why did Oracle’s stock take a hit? And why did Oracle resort to juvenile name calling in trying to dismiss this idea? The answer is, because for the first time in 30 years, Oracle customers have viable alternatives to all of Oracle’s products and services. If you were starting a new company today, you wouldn’t have to use Oracle. In fact, many of the largest startups avoid Oracle. This is very different than 30 years ago when Oracle software was a must for any company looking to grow.
Let’s get back to the question – are companies moving off Oracle? I can tell you as a matter of fact that many companies do indeed have initiatives to reduce or eliminate their reliance on Oracle. This may mean a compete replacement of all Oracle, or it may simply mean a reduction in usage with a much smaller Oracle footprint left at the end. One of our clients in fact told us about their “Project Visine” to get the red out. The next few years will be critical to see if customers can actually make the jump.
Right now there is a race against time between Oracle, AWS, Microsoft, IBM, Rimini Street, etc. On the one hand, Oracle is trying to lock their customers in even further by forcing a movement to Oracle’s cloud. Oracle uses license audits from their LMS team as a way to push unwilling customers to buy their cloud. Don’t believe me, read what happened to the City of Denver here. Oracle sees their cloud as the ultimate lock in tool. If Oracle controls the contracts, hardware, software, implementation, AND DATA – then their customers will never be able to leave. This is huge for Oracle.
Amazon, Microsoft, Salesforce, IBM, Rimini, and others are building amazing alternatives to Oracle products and services. Oracle’s customers are all looking at these alternatives to Oracle. In fact, in many cases, these Oracle competitors have built products and services that are beyond what Oracle is doing. This is especially true on the cloud and support sides of the house. The key for these companies will be to enable their clients to use these products and services BEFORE Oracle traps their clients in the Oracle cloud.
Can these band of Oracle liberators free frustrated clients before Oracle locks them into the next level of entanglement? Only time will tell. Two things are certain. First, Oracle customers are looking to get out of those expensive Oracle contracts and spend less money. Second, Oracle will never make it easy for their customers to spend less money on Oracle. In fact, Oracle will do just about anything to prevent that from happening.
In our next blog we will talk about the three things that an Oracle customer must have in order to move off of Oracle.