Oracle Is Bleeding At The Hands Of Database Rivals
Something is seriously wrong in Larry Land. Oracle does not command absolute control like it once did. You can see this clearly with the earnings the company posted last week and the growth that startups like Datastax are witnessing as more customers seek alternative databases for online applications.
Until this past week, the extent of Oracle’s problems were not known. But there is a cut, a slight bleeding that’s now visible. But how deep is the cut? How much is Oracle really bleeding? That’s exactly the question analysts asked in a Reuters story after the earnings results:
“Data base revenue, which has been the cash machine of the company, has changed. There are now alternative databases, as well as the cloud,” said Mark Moerdler, an analyst at Bernstein Research. “That pressure is still a tiny bleed, but it is out there and the question is – is it bigger than we think it is?”
We know this much. Oracle reported this week that new software licenses are down two percent. And that decline is in part reflected by the adoption of NoSQL databases offered by Datastax and a variety of other services that use in-memory technology at the database layer.
The reason for the drop has more to do with the enterprise acceptance of online applications more than anything else, said Datatastax CEO Billy Bosworth in an interview last week.
That’s the truth. NEA Ventures Scott Sandell said to me at SXSW that CIOs are convinced to move their workloads but cloud security is still an issue.
That’s where companies like Datastax enter the picture. Datastax is built on Cassandra, a high performance Apache open-source database technology with security at its core.
Here’s how Bosworth described it to me in February at the Strata Conference.
Datastax, founded in April 2010, finished its first year with 26 employees. It ended 2012 with 100 employees. Bosworth expects to have 160 people on staff by the end of this year.
Customer growth has increased significantly. By the end of 2011, Datstax had 27 customers. One year later it had 270, with 20 from the Fortune 100.
Several dozen of those customers have moved either all or parts of their application off relational technology such as what Oracle provides.
When companies come to Datastax, they say the number one thing they need is security, Bosworth said. They are building from day one to avoid disaster scenarios.
Datastax, like other NoSQL providers, spans its database technology in a fully distributed way, across private data centers and the cloud.
Datastax differentiates by offering high performance at scale but without complexity.
How customers use Cassandra reflects on why Oracle growth has begun to stall. Often, customers will continue to use Oracle databases but will put it deeper in the backend. They will take another piece of the app and put it on Datastax.
Customers will build in a middle layer of services components that allows the app to decide which database to use for which workload.
Lighter Oracle workloads means less revenues, which we see reflected in the company’s earnings.
To counter this swarming hive of distributed systems, Oracle has taken the opposite approach, building out engineered solutions with their software running on big, new age mainframes. That strategy does not seem to be working very well. Oracle bought Sun Microsystems with plans to sell the hardware with its software.
Analysts tend to agree:
“The problem is, the growth of SaaS (software as a service) applications is undermining that strategy. When you subscribe to salesforce.com, you don’t need to buy a database, middleware or hardware,” said Patrick Walravens, an analyst at JMP Securities in a Reuters story last week.
Oracle has lost money every quarter since it acquired Sun for $5.6 billion. And there is little proof that companies are going to start using one company like Oracle for all their hardware and software needs. Instead, they will mix Oracle software on commodity systems. Or they may even go with the new open-source server technology coming out of Open Compute. They have plenty of other options, too. OpenStack, the open cloud effort, is growing fast, as is Cloudstack, the open-source cloud service now part of the Apache Foundation.
Datastax has its own challenges. It competes with Amazon Web Services and all the other NoSQL providers such as 10gen. The ecosystem is still quite young. Finding qualified people is a challenge. Developers need more education, a change in thinking for the new cloud approach.
But overall, it’s clear that Oracle really is starting to show the pains of being an aging innovator. The earnings show a slight cut. The question is how deep the cut is and how Oracle will respond to challengers like Datastax.
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YouTube To Launch Music Subscriptions
YouTube plans to launch a music subscription service later this year, to allow people to listen to tracks online, and to possibly cut out the ads that precede each video for subscribers, according to Fortune.
The largest storehouse of streaming video, YouTube relies on selling banner ads on the site and running short clips before each video, giving a cut back to record companies.
YouTube has released a statement that confirmed it was considering a subscription service, but noted that ads wouldn’t go away:
While we don’t comment on rumor or speculation, there are some content creators that think they would benefit from a subscription revenue stream in addition to ads, so we’re looking at that.
YouTube stepping up the game as a music provider sense to me. It’s is one of the first places I hit up when I’m looking to listen to a new track quickly. Sure, it’s not often the best quality, but it’ll do in a pinch. A proper subscription service is likely to provide higher fidelity tracks, and elevates YouTube to the same playing field as labels such as Warner Music which do rely on streaming revenue.
Google already has partnerships with numerous music publishers. Last November, it struck up a deal with Armonia, one of the largest alliances of music publishers, giving it access to 5.5 million tracks across 35 countries.
And in the larger scheme of things, the company might overlap its new subscription plans into its Google Play music service. In December, it rolled out a free “scan and match” feature that allows users to add up to 20,000 songs from their offline collections to the Google cloud and stream it to their devices on the go.
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T-Mobile Has The Nexus 4 In Stock! You Guys! Hurry!
If you’re quick, you can snag a Nexus 4 from T-Mobile right now for $199 on contract. Ever since its launch, the phone has been rather hard to purchase. Blame Google. Blame LG. But it doesn’t matter now, ’cause you can buy one right this very second.
The Nexus 4 launched on the Google Play store late last year. It sold out almost immediately. T-Mobile then started selling the phone in some retail locations last week. Now, right on schedule, the Nexus 4 is available through its website as long as you’re willing to sign a contract — which is kind of a bummer.
Part of the Nexus 4′s breakout success comes from its original pricing. Google cut the wireless carrier out of the picture and sold the phone at a fair price without requiring a new contract. At $349 the phone was slightly more than a comparable iPhone, but owners weren’t locked into a 2 year service agreement.
So, if you’re willing to lock yourself into a two-year agreement, here’s the link to the hottest Android phone currently on the market. If not, keep on refreshing the Nexus 4′s Google Play product page. It’s bound to be in stock sometime in 2013.
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6 ways to monetize a user-based business model
How do you monetize a unique business model based on users rather than selling an actual product? We asked members of the Young Entrepreneurs Council for their thoughts.
Giving it away at Contently
“At Contently, our core monetization strategy is through marketplace transactions. We’ve built (and continue to grow) a network of journalists and a corresponding publisher network. When our users do business with each other, we take a fee as facilitator.
We’ve learned through experience that because web apps are becoming cheaper to build, tools will eventually become free if there are other ways to monetize them rather than charging directly for them. We cut to the chase by releasing our tools for free to attract users, and then we monetize with transaction fees. We also have advanced, paid tools for agencies who need enterprise features that are more technically difficult to build and therefore are not going to be given away by a competitor anytime soon.”
Follow this link: 6 ways to monetize a user-based business model
Apple’s Tim Cook Says iPhone And iPad Supply Component Order Cut Rumors Don’t Tell The Whole Story
Apple CEO Tim Cook took time on the company’s earnings call today to comment on a specific rumor, which is an extreme oddity for Apple’s top-tier executives. He prefaced it by saying he doesn’t want to make a habit of addressing rumors, but went on to comment on recent reports that iPad and iPhone part order volumes have been cut owing to weak demand.
“I know there’s been lots of rumors about order cuts and so forth,” he said. “I would suggest it’s good to question the accuracy of any kind of rumor about build plans, and even if a particular data point were factual, it would be impossible to interpret that data point for what it means for our overall business.”
Cook ended his discussion of the issue by summarizing that a “single data point is not a great proxy for what’s going on.” The intent was clearly to defuse the ability of supply chain reports to affect analyst outlooks on the company and subsequently stock price, since the recent outburst of these kinds of stories coming from suppliers are likely a key component of recent stock price volatility.
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