Larry Ellison Debunks Myth of Oracle Lock-In

SAP loves to promote the fantasy that Oracle’s planning a hostile takeover of the planet by forcing businesses to buy pure-red, all-Oracle stacks.

And while SAP’s fantasy is a bit amusing on its face, it becomes truly laughable when we take a peek behind the screen and see that SAP’s Big Conspiracy Theory is coming from a company that has publicly committed to becoming the world’s dominant provider of not only enterprise applications but also analytics/BI, plus mobile solutions and management, plus cloud solutions.

Not content with all that, SAP’s also proclaimed it wants to become the world’s #2 provider of databases, of which it is currently peddling three different models.

On top of that, SAP’s begun dabbling in the consumer-applications market via its AppHaus development centers around the world.

Well, well—thank goodness SAP seems to be willing to let the rest of the software universe battle for leadership of the screensaver market.

So fantasies aside, what is Oracle’s stated position on vendor lock-in? Let’s get the answer straight from CEO Larry Ellison himself in the context of answering a question about that very subject from a customer.

In a Q&A session immediately following a recent keynote speech at Oracle Open World Japan, a customer said that while Oracle’s strategy of engineering hardware and software together is a “fantastic concept,” he was concerned “about being locked in to specific vendors and then having to pay high costs because of that.”

In Ellison’s reply, he makes three key points:
--while the Oracle Database can run on Exadata, it can also run on hardware from many other hardware vendors;
--the concept of locking-in customers is antithetical to Ellison’s long-standing commitment to product excellence and topping competitors in both performance and price; and,
--Oracle engages in extensive and ongoing collaboration with competitors around standards for Java and Linux.

Here are some comments from Ellison on each of those areas (you can watch a video of Ellison’s full remarks on the subject here 

1) Portability of Oracle Database Precludes Lock-In: “The reason we think there’s no lock-in for us is you can run the Oracle database on Exadata, and if the Oracle Database delivers better cost-performance for you, then you should pick Exadata. If it does NOT deliver better cost-performance, then you pick Dell or whatever IS better. I promise you: Oracle will always run on Sun hardware, Fujitsu hardware, etc.—so you can pick Oracle hardware, you can pick Fujitsu hardware, you can pick Dell hardware, you can pick IBM hardware. So you will always have a choice—as long as we always give you a choice of multiple hardware sources, you can pick the lowest cost, and the best cost-performance….  The second IBM delivers better performance than we do, lower cost than we do, you can then pick their hardware.”

2) Lock-In Stifles Innovation and Breeds Laziness: “But we cannot have lock-in; lock-in is a very bad idea. Once we lock someone in and charge high prices, you get mad at us, and you look for a way to break away from us. We watched IBM do that, and we think that’s a very bad strategy. We get LAZY; if we don’t give you choice, then we think we don’t have to compete, we don’t have to work so hard, we don’t have to advance our technology. As long as we give you choice, you’re not locked in.”

3) Open Collaboration with Competitors on Java and Linux. “We have a close partnership around Java with IBM. We compete with IBM aggressively, but we also partner on Java. We partner with SAP on Java—you know, we sued SAP, we’re in court against SAP, but we partner with SAP on Java, open source, a compatible Java. So when we came out with our last version of Java, open source, everyone voted for it except one company voted against it: Google. The only one who doesn’t like what we’re doing with Java is Google. But everyone else—IBM, Fujitsu, even Hewlett-Packard, SAP—everybody else—we cooperate with on an industry-standard Java. We agree on the language specifications, we agree on the API’s, we agree on the improvements, and as a community—as a group—we improve Java….  We’re absolutely committed to open source with Linux, with our virtual machine, with Java. We think customer choice is a good thing, we think cooperating with a community of customers and even competitors is a good thing to create standards around Linux, standards around Java, and giving customers choice so there’s no lock-in.”

That’s a pretty clear commitment to openness and customer choice from the man who founded Oracle, is CEO of Oracle, and oversees product engineering for the company.

On top of that, in a conversation on this subject just last week, Ellison noted that while the Oracle Database runs on a wide range of systems offered by competitors as well as partners, Teradata runs only on its own proprietary database, and the same is true for IBM’s Netezza.

“Exalytics runs all your existing Oracle software right out of the box, and that’s the big difference” between Exalytics and [SAP] Hana, Ellison said. “For Hana, you have to rewrite all your existing applications or write new ones from scratch. You have to rewrite everything.

“Is that vendor lock-in?” asked Ellison.

“And with Netezza? IBM’s existing DB2 apps don’t run faster on Netezza, and they don’t run slower on Netezza. And that’s because they don’t run at all on Netezza—they have to be rewritten to run on the Netezza database.

“Is that vendor lock-in?”

Fairy tales can be cute, but sooner or later the truth breaks through. And it will be fascinating to see which companies customers believe offer true openness and choice.


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