UPDATED 14:50 EDT / MARCH 21 2013

NEWS

Oracle’s Database Empire Facing Deadly Threat From SLI

It’s been a bad day at the office for Oracle, which has just posted disappointing Q3 earnings that saw revenues fall by 1% and profits remain flat. The company has moved quickly to paper over the cracks, saying that its poor sales execution strategy is to blame for its recent poor performance, but this flimsy excuse does little to disguise the fact its database business is coming under increasing threat from Software-Led Infrastructure (SLI).

Whether it admits it or not, there’s little doubt that Oracle’s being left behind by the emergence of new Big Data technologies. Its scale-up, proprietary hardware and software database model is fast becoming outdated in the face of SLI’s rapid rise, with a growing number of enterprises coming to realize that platforms like Hadoop are just as capable of managing Big Data workloads as anything that Oracle can offer. With CIOs feeling the pressure to cut costs in their IT operations, it makes perfect sense to turn to lower-priced SLI models and ditch the expensive infrastructure.

Indeed, so desperate is Oracle’s plight that there are rumors flying around that the company is resorting to begging its existing customers not to leave:

“According to my sources, Mark Hurd is calling customers, begging them not to move off of Oracle to other lower cost/higher performance open source scale out platforms,” says SiliconANGLE founder John Furrier.

“Flash and SLI, plus open source are impacting the business model.”

Oracle’s Response: Too Little, Too Late?

 

Oracle is clearly facing a deadly threat to its business, and up until now it’s struggled to come up with an effective response. Having been forced to admit that Hadoop has stolen its mantle as the choice platform for processing and providing structure to Big Data, the company has nevertheless continued to impress that its technology remains the only viable option for organizations looking for more comprehensive analytics on that data.

Unfortunately for Oracle, this argument has started to wear a little thin within the Hadoop community, with private vendors like Fusion-io and Violin Memory adding new functionality in the form of SQL-like analytics to their own framework. What’s more, these developments seem to be happening at a break-neck speed – so quickly that Oracle has effectively been left for dead as Hadoop increasingly becomes a more attractive option for CIOs and enterprises in comparison to its own, overpriced technologies.

The outlook isn’t good, but Oracle being Oracle, only a fool would bet against it pulling out all the stops in its fight for survival.

As Wikibon’s Jeff Kelly explains in his own analysis (see video clip below), if all else fails Oracle will most likely resort to buying its way out of trouble, snapping up one of the top commercial Hadoop vendors, before integrating its technology within its own database offerings. Oracle has a history of  doing exactly that whenever the going gets tough, and it certainly has the financial muscle to do so. According to Kelly, the most likely candidate for acquisition would be Cloudera, which already enjoys a relationship with Oracle as the Hadoop software layer of the Oracle Big Data Appliance.

But would this be enough to save Oracle’s business? The fact is that Oracle has moved way to slowly to head off this emerging threat, and even now it lacks a clearly defined strategy to tackle the problem. Things will only get worse too – and quickly. With continuing innovation in the core Hadoop framework from the likes of Hortonworks, MapR and the open source community, Kelly warns there is a real danger that whatever Oracle does may be too little too late.


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