Re: RDB Sold to Oracle! Damn!

In article <ddrukerCv94x6.q8_at_netcom.com>,  ddruker_at_netcom.com (Daniel Druker) writes:
>
> The deal should be good for Oracle because it will gain market share, and
> lower its average cost of sales. (IE with the same sales and marketing
> infrastructure they will be selling X more licenses. This means more
> money for development to fend off Sybase, and higher profits for Oracle's
> investors. Isn't that what companies are supposed to do ? They will also
> get some good software technology and have access to some good engineers.
>

   But can Oracle make money if they continue to sell RDB at anything near its current price? And if they don't, will former RDB customers choose Oracle? It seems to me that once RDB is no longer a viable option things are wide open, and lots of RDB sites will choose a database other than Oracle. And there very well may be a backlash against Oracle as the company that killed RDB in the first place. What if many of the RDB customers chooses SYBASE instead, then they become a stronger company - which helps them fend off Oracle.

> For Digital, it means that they can eliminate rdb development, support, and
> marketing. They get a nice chunk of cash or stock for doing so. They can
> invest this cash in projects that provide higher returns for them than
> rdb did - building computers for example. If providing rdb was losing
> money for DEC, or if it was not making as much money for them as spending
> the same dollars elsewhere, it was a very smart move to sell it off.
>

  Perhaps some of those computers got sold because of the availability of RDB. Once that "sweetener" is gone Digital may find less people who think their computers are more attractive than the competitions. Perhaps they "lose money" on VMS sales as well, but for many customers VMS is the only reason to consider Digital as a vendor. I believe to a lesser extent this is true for RDB also.

  One could extrapolate your argument to suggest Digital should divest themselves of all software development. Yet in the past it has generally been precisely this software which differentiates Digital from the competition and makes their product attractive. To go to the absurd extreme, why doesn't Digital get out of everything except selling AXP chips. Think they could survive in such a market?

  There are also a number of Digital products which rely on the availability of run-time RDB for their function (CDD, DFO). Will Digital shortly be releasing versions of these which don't require RDB, or will those customers be required to buy a relational database system they don't want/need in order to get functionality they desire? (Again this assume Oracle will not find it in their interests to sell RDB at anything near it's current price)

  There are customers who have made business decisions based on the availability and pricing or RDB. It's hard to see the sale not changing this in a very substantial way. Granted Digital already has their money and can walk away from them, but I believe that the loyalty of the installed base is very valuable to Digital right now, it's what provides a lot of the revenue that keeps the company afloat ( or from sinking any faster ). Customers who are hurt by this sale are going to be much less inclined to do business with Digital in the future.

> Just because you're used to getting a relational database for free,
> or subsidized by a sick company, and this won't be happening anymore
> doesn't make this is a stupid deal.
>

  No, but perhaps the customers they will alienate because of the deal does.

> The whole idea is that it will make both Digital and Oracle stronger. It
> would only be a stupid deal if Digital and Oracle did not agree on the
> correct price. The market seems to think that it is a good deal - The
> stock of both companies rose on the WSJ announcement.
>

  The market constantly demonstrates that it can't see beyond the next quarter's balance sheet. I wouldn't use their reaction as any indicator of the long term advisability of this sale.

  Ultimately you may be right though. The only people this is likely to really be bad for are the current RDB customers. As long as your business model works on the "there's lots more suckers (customers) out there" principle then this is probably a good deal.

-- 
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Malcolm Dunnett    Malaspina University-College     Email: dunnett_at_mala.bc.ca
Computer Services  Nanaimo, B.C. CANADA V9R 5S5       Tel: (604)755-8738