Subject: Re: Larry Ellison on FSBs
From: "Stephen J. Turnbull" <turnbull@sk.tsukuba.ac.jp>
Date: Wed, 26 Apr 2006 15:09:00 +0900

>>>>> "Ben" == Ben Tilly <btilly@gmail.com> writes:

    Ben> Furthermore MySQL doesn't put together its improvements at
    Ben> any expense to itself.

Neither does Oracle or any business that consistently posts ROI > 0.
Why is it an advantage that the revenues that cover the expenses are
earmarked for those expenses?  Isn't it rather a disadvantage, that
MySQL is locked in to those expenses rather than activities that might
be more strategic and long-term?

    Ben> Given their dual licensing model, as long as MySQL can
    Ben> maintain control of the software base, they are the only
    Ben> people you can get those improvements from.

In other words, MySQL *owns* *something*.  What does this have to do
with the open source threat to Oracle?

    Ben> Please explain your acronyms.

XP = extreme programming, AKA refactor until you're down to all
primes, and then run some more primality tests just for fun.  XB
(which acronym I just made up) is the same idea: "extreme business."
No sacred cows, rethink everything every day.

SAP and IBM are not selling software.  They are selling business
process consulting, business processes which are supported by their
software.  Ellison is saying Oracle is doing the same thing.

    Ben> If we're going to talk about Christensen, then we need to use
    Ben> the words in the way that he does.

OK, I'll have to go look at it again more carefully.

    Ben> Where things get very difficult is when it is obvious that
    Ben> your long-term interests are best served by doing A, while
    Ben> your short-term interests are best served by doing B.  In
    Ben> that situation it is hard to do A, and harder still for
    Ben> organizations than for individuals.

Precisely why I emphasize that Microsoft and Oracle are still more
personality cult than organization.

You know, there's a reason why some executives get paid numbers of
dollars that look like interplanetary distances, to manage companies
whose accounts look intergalactic.  That reason is that boards can
convince themselves that these are the guys who have done A before and
will do A again.  The jury is still out on whether they really do, but
what if LE has *already* done A with Oracle.  That's his claim.

    Ben> By his terms that is absolutely right.  You can't charge a
    Ben> lot in open source, and you certainly can't charge as much as
    Ben> Oracle is structured to need.  Unless Oracle can restructure
    Ben> itself to not need that (organizationally very difficult), it
    Ben> needs to seek business opportunities elsewhere.  (Of course,
    Ben> like IBM, those opportunities might be found in complementary
    Ben> businesses to open source ones. Indeed I suspect that Oracle
    Ben> is going that way.)

Why "suspect"?  LE said each of those sentences in very similar ways
in that interview.  The main difference is that you, for reasons I
don't grok yet, seem to believe that open source is going to drive
Oracle, whereas LE clearly believes that open source may get to where
his business is sometime in his career, and then again, maybe it
won't.  And he certainly isn't going to bet G$6.5 that Red Hat will be
the company to do it.

    Ben> Actually the technology is NOT a horse race.  Take 2 machines
    Ben> that are installed and ask two competent people to install a
    Ben> database on it. MySQL will be installed faster, and requires
    Ben> lot less competence to install.

    Ben> By contrast Oracle installations that I've seen are using
    Ben> features that simply aren't found in MySQL.  (Or weren't
    Ben> until recently. Though plenty are using features that still
    Ben> aren't in MySQL.)

You're missing my point.  Oracle can afford to provide *both* a free
software EZ-DB for the masses---competing against MySQL on that almost
as good EZ-DB plus whatever snake oil LE claims is their *real* core
competence (this is the "horse race"), and also their full-featured DB
where MySQL *can't* compete (yet) for those who need it.

Sure, this implies one of your central themes AIUI: because that will
cannibalize Oracle's full-featured DB market, Oracle has to stop
selling databases and Do Something Else[tm].  My question is "What is
MySQL gonna do if for Oracle Something Else[tm] is a done deal?"



-- 
Graduate School of Systems and Information Engineering   University of Tsukuba
http://turnbull.sk.tsukuba.ac.jp/        Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
        Economics of Information Communication and Computation Systems
          Experimental Economics, Microeconomic Theory, Game Theory