Shutterfly is the latest to migrate from an Oracle database to Amazon AWS. As the enterprise technology landscape changes, more and more businesses are choosing to partner with emerging vendors such as MongoDB, Databricks, and Snowflake, rather than the established Oracle . The migration to the cloud challenges the systems of the past. Emerging vendors are also making it easier to adopt their technology directly, easing the burden of negotiating large contracts between corporate buyers and salespeople and allowing end users to more easily choose their own tools. Products from emerging software makers can also be deployed without a large team of database administrators, which often need to support Oracle’s products, which is for businesses that would otherwise have to compete with other businesses for these demand response engineers. is a cost saving. Evidence of this shift is widespread. JPMorgan Chase selects Cockroach Labs as database vendor to support new retail banking application in Europe. Nasdaq is working closely with the likes of Databricks and Amazon Web Services to look to upgrade from on-premises Oracle data repositories. In addition to AWS, database offerings from rival cloud providers such as Microsoft and Google Cloud are growing rapidly. Companies such as JetBlue Airways and Automatic Data Processing are using Snowflake to help store and analyze corporate data for sales dashboards and other uses.
Collectively, these moves are just a few splashes in a database market estimated to be worth $155 billion. But it’s evidence of a structural shift in the industry that’s jeopardizing the leadership Oracle has built over the past 43 years — from co-founder Larry Ellison and his team pushing the first relational database to The market began, and such databases could organize the information in them into tables that were easier to access, manipulate, and analyze. Oracle does not specifically disclose the financial results of its database business. Most of the revenue comes from supporting and maintaining existing customers, not new sales. But Oracle’s influence is slowly fading. According to Gartner, Oracle had about 27% of the database market in 2019, and in 2020 this has dropped to 24%. At the same time, Amazon’s market share rose from 17% to nearly 21%.
Oracle declined to comment for this story. Competitors are growing rapidly. For example, MongoDB’s sales rose 57% in the most recent quarter to $285 million. Analysts and company executives say the results show that companies are using MongoDB for larger and larger projects. Most of Oracle’s revenue comes from existing customers. Craig Guarente, who worked at Oracle for 16 years and is now CEO and co-founder of Palisade Compliance Consulting, says that every few years, when companies have to renew their contracts, Oracle raises the price of maintenance and support — — Profits from this business have been hovering around 95%. “The entire profit of the company comes from Oracle database maintenance,” he said. In each contract negotiation, “you go from paying $20 million a year, to $30 million a year, to $50 million a year.”
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