I was watching the financial news and a big "Oracle Stock Slumps" banner came on CNN online. A bit misleading as Oracle's slump was no different from the rest of the market. But it made me think.
Oracle in some ways stands alone. Unlike IBM, HP and Microsoft - Oracle is more in the business of selling applications than enabling applications. Though Oracle's database is by far the leader, its middleware (BEA) and hardware (SUN) a close second - it is clear from their attacks on SAP that the application business is their "golden calf".
The problem with the applications is that these "golden calves" turn into "cash cows" and are ultimately destined for the .... (I will stop the analogy there) - regardless of how amazing the applications was in its prime. This is true of all applications - built in house, built by MIT, built by Oracle, built by me. Applications are products and follow a product lifecyle.
Now this inevitable decline differs from product to product ... from designer to designer. But the general phenomena is that the richer the "business logic" - the further the software is from being a framework - the faster it ages and the harder it is to re-juvenate. Good product managers try to keep their products simple - making sure embedded logic does not derail the ability to address changing needs in the future.
Microsoft and IBM have taken the approach that "Framework is #1" - enabling system integrators and independent software vendors work on the business logic. In other words, extending the life cycle of their products and leaving the "field" holding the bag. The applications written in these frameworks inevitably age - it is unavoidable. Fortunately - both Microsoft and IBM's frameworks have allowed application developers to keep their business logic on a relatively thin layer ... improving the chances that their applications have a good chance of having a long and prosperous life.
Oracle has taken the opposite approach. It is owns the applications and is hell bent on killing off any competitor - especially those built on frameworks. They don't say "use Oracle's frameworks not IBM and Microsoft's" - they say "Buy eBusiness Suite, everybody else does". I nice strategy if you have a dominant market share achieved by acquisition. The fact of the matter is that other than BEA, J2EE and the database - Oracle does not provide anything like a coherent framework for building applications.
So Oracle is being generous. It is saying "we will do the applications, don't you worry your little self with all those pesky details". That is OK as long as their applications can change with a changing world - the way applications can be built and evolved on IBM and MS can. But down deep Oracle's generosity is based on the principle that they can afford to evolve these products so that the "Top 10 Leaders" don't have to. Unfortunately, there is nothing unique about Oracle - like an IT shop in 1992, Oracle is sitting on horrendously expensive legacy applications. And like IT shops is 1992 - Oracle has shown no great product management insight on escaping the inevitable decline of their applications. And like IT shops in 1992 it is becoming clear that this is becoming very expensive for Oracle.
I would say too expensive. If you judge an applications weight by number of pages of documentation - you will see exactly what kind of beast Oracle is trying to tame. If Oracle's sales machine falters and they don't bring in the hard cash to support these aging assets - and the pyramid begins to crumble - I would expect last night's slump to be a more regular occurrence. But to be sure they will first squeeze as much blood from their client base rock before that happens.
But when it does happen their generosity will become a curse - unless Microsoft and IBM step up and help SI and ISV compete with the eBusiness suite.