The last hurrah for Oracle?
By Charlie Cooper,
Executive Editor/Commentary
CNET News
November 14, 2002
Ray Lane, now a venture capitalist with the firm Kleiner Perkins Caufield & Byers, used to be the No. 2 exec at Oracle before a falling-out with CEO Larry Ellison. But Lane now believes software is doomed to turn into a commodity. If he's right, that's going to rock the world of establishment software companies like his former employer.
But in the meantime, the bad-news economy is turning out to be pretty good news for Oracle.
Chief information officers are reducing the number of suppliers they use and are fiddling less with applications in a bid to customize them. Their top agenda item is to find ways to better integrate their existing technology investments. Also near the top is coming up with clever ways to stretch their budgets. That's a scenario that works to the advantage of a veteran like Oracle because few big information technology managers are going to bet their careers on an unproven company in this uneven economy.
And things are looking up at Oracle. The company is enjoying the highest operating margins of any big-time software company, and execs said this week they expect sales to pick up in 2003. Oracle customers also report that version 11i of the company's business applications suite is finally stable.
Oracle can count on getting its fair share of new business because it's more or less forcing customers to upgrade. (The company is dropping support for older versions of the suite by July 2003, leaving customers with not much of an alternative.) This isn't so different from Microsoft making its upcoming Office 11 suite compatible with only its latest service packs.
Of course, customers might find all this easier to swallow if the person listed on the masthead as CEO at least pretended he was more interested in them than he is in winning the America's Cup. When attendees hear the state of the state, Ellison will be talking to them via live hookup from New Zealand.
Maybe Ellison's right in assuming they can't turn elsewhere. For the moment, they are stuck. But the technology business isn't static for long. If another option appears on the horizon, Ellison may find out that loyalty is a two-way street. |
