Subject: Re: "I've got more programmers than you"
From: Ian Lance Taylor <ian@airs.com>
Date: 03 Oct 2001 18:17:27 -0700

Geoff Crawshaw <gcrawshaw@openair.com> writes:

I basically agree with your general point, but not with your specific
examples.

> 1. Oracle is pushing really hard into the application business, they
> are basically trying to move up a layer. This would seem like a good
> hedge against weakening profits from FSB competition. There has being
> a lot of activity in the FSB database market recently and while it is
> early days it feels like significant headway is being made.

I really doubt that Oracle is doing this due to FSB competition.  They
are doing it because their market cap, with a P/E of nearly 30,
requires them to continually grow revenues significantly.  They can't
lower prices to gain market share--they already have most of the
market share.  They can't rise prices very much--their prices are
already very high.  So they have to expand into new markets.

Moving up the foodchain into applications is a logical step
technologically.  They're not doing very well at it because they've
forgotten that they're not historically a very strong programming
house.  Oracle beat the other database vendors on marketing, not on
technical excellence.  They will probably do fine with the
applications when they are technically adequate, but right now,
compared to the competition, they are not.

> 2. Is one reason for IBM's big push on Linux is to reduce the total
> dollar value of the OS business and weaken one of the cash flow
> pillars of Microsoft?

I'm sure that is one of the reasons.  I expect that a bigger reason is
that IBM recognized that AIX and OS/2 were much less popular than
Linux, and since AIX only runs on IBM hardware anyhow, it would be
cheaper in the long run, and would not hurt hardware sales, to switch
over to Linux.

Ian