The Valley and the Future
Now that Oracle CEO Larry Ellison has spoken, everyone is taking sides.Now that Oracle CEO Larry Ellison has spoken, everyone is taking sides. Some agree with his recent statement that Silicon Valley as we know it is a thing of the past. Others say, bosh! Ellisons head is stuck in the last paradigm, and he cant see the future. We think theres enough truth in his comments that they should be taken seriously, but we arent convinced that the future of the IT industry is one of gloom and doom. Although parts of Silicon Valley have become modern-day ghost towns, things are not so bad if youre a buyer of technology, as Ellison noted. The trend toward commoditization and price/performance competition around standards is good for IT buyers, and Linux also benefits them. As we found when evaluating entries in our eWeek Excellence Awards, there is plenty of innovation in new products. Sure, the things that are becoming commoditiessuch as operating systems, servers and networkswere once the focus of vendor rivalries around competing technologies. Ellison may be looking back with longing at those days, and he may be looking ahead with apprehension to the growing threat to Oracles franchise posed by open-source databases.
Well concede that commoditization, while generally beneficial, does bring a downside. Generic technology sold at razor-thin profit margins can lead to a dearth of investment and a consequent lack of innovation. The few vendors that remain in these markets can then exert pressure on buyers in the form of service contracts and mandatory upgrades with features they dont need.