What Sonys Snub of Oracle Tells Us

By Lisa Vaas  |  Posted 2006-03-20

What Sonys Snub of Oracle Tells Us

Oracle may indeed be thinking of ditching its licensing model altogether in favor of becoming a pure subscription player over the coming two years, as Renee Ferguson reported on March 20.

It sure wouldnt come as a great surprise, given Larry Ellisons comments at the Feb. 8 Credit Suisse Software Conference that licensing revenue "was an interesting number" but that "by far, our most profitable business is existing subscribers that renew their subscriptions every year."

First Albany analyst Mark Murphy got tongues waggling afresh on the subject when he put out a note citing industry contacts that say "the wheels have been set in motion from the highest level at Oracle to do away with license sales within roughly 18 to 36 months, if possible."

Ellisons been talking about this forever. Does anybody really care besides Wall Street analysts, stockholders and resellers?

I suspect most customers simply dont. I suspect most of you agree with A.T. Kearney CIO Mike Johnson, who told me that hes skeptical that such a massive move—that database is one darn thick client to move to the subscription model, after all—could be done in a way that would benefit his company.

His IT department, yes, perhaps—if you consider losing control over your Oracle database to be a desirable price to pay for not having to maintain and protect it.

"Im not sure customers would be satisfied unless theres financial or other benefit," as Johnson put it in our conversation.

A more tantalizing prospect for some customers is to jump off Oracle and its steep licensing fees altogether.

That was emphatically underscored by the March 20 news that Sony Online Entertainment is jumping ship, dumping Oracle to move over to EnterpriseDB and its PostgreSQL-based database.

Thats a big win. CEO Andy Astor was downright gleeful when I spoke with him and Sonys Vice President of Business and Legal Affairs Rick Herman last week about it.

Its big because its the first Fortune 500 customer to prove the pudding on EnterpriseDBs core pitch: in other words, that the products high compatibility with Oracle can make a clean, smooth, much more affordable alternative to Oracle itself.

That Oracle compatibility is going to be the companys bread and butter. EnterpriseDB just put out an update, Advanced Server 8.1, which the company announced Feb. 14 at the Open Source Business Conference in San Francisco, based on the latest version of the open-source PostgreSQL database, 8.1.2.

Next Page: Exponential scale.

Exponential Scale

The update includes features to attract experienced Oracle developers: Oracle-style packages, sequence manipulation, cursor FOR loops, column alias options and REM support. Such features make it easier to migrate Oracle applications to EnterpriseDB with little or no change.

Sony Online Entertainment publishes and runs massive online video games—one of the largest companies in the world that does so. It has hundreds upon hundreds of thousands of subscribers worldwide, Herman told me. Sorry, Id give you a real number, but game companies guard subscriber numbers jealously, much like Google with its search volumes.

The database of such a company needs to scale "almost exponentially" as it adds more subscribers and more games to its offerings, Herman said. Think of the computing power required behind a hit title such as EverQuest, for example.

In that virtual world, youd have to run a virtual character 24x7 for 32 consecutive real-world days before youd run out of new territory to explore.

Each player can have multiple characters. Each character is highly customizable, with his or her own hair style, eyebrows, clothes, height, magic swords, spells and so on.

Then, layered on top of that in the database, youve got to remember what quest characters are on, what monsters theyve slain, what rewards theyve found, and what interactions characters have had with each other.

Sony cant comment on the size of the databases it needs for this type of computing load, but Astor told me that in the due diligence process, they were testing databases in the terabyte range.

When Sony Online Entertainment needed to grow, its due diligence included all the usual suspects, including database companies with which it has established relations, but it also looked at open-source solutions.

Sony looked closely at MySQL and the "free" databases from IBM, Oracle and Microsoft, and preferred EnterpriseDBs rich feature set, according to an EnterpriseDB spokesperson.

The key factor that made Sony focus on EnterpriseDB was, indeed, compatibility with Sonys current proprietary databases, which include Oracle.

"To the extent wed do migration, it made the migration a much simpler process," Herman told me.

"As our needs scale, our costs scale, so we were looking for a cost-effective solution with features we needed that would perform the way we needed it to perform and would simply integrate with our scaling needs," he said.

When push came to shove, Sonys tech guys simply liked EnterpriseDB technology, Herman said.

They liked it so much, and Sony liked it so much, it even invested in EDB, seeing a "very large market opportunity" in what it was doing, he said.

Herman couldnt give me details on the size of the investment, but Astor said Sonys a minority share holder that came in with the most recent round of $7.5 million in venture capital funding from Charles River Ventures and Valhalla Partners.

Each of those players invested about $3 million, with the remaining $0.5 million coming from original angel investors reinvesting, plus Sony.

Sonys tech guys have already started the migration process as well as the re-architecting to achieve growth.

Theyll be using existing, proprietary software systems for "the foreseeable future," Herman said, but saw EDB as a good way to control costs and to deal with the exponential growth problem and be well-positioned to deal with additional future growth.

Sony figures that 80 percent to 90 percent of its applications can be used without modification on EnterpriseDB.

We dont normally write about customers wins all that much, but I see this customer win in particular as being pivotal.

As Herman put it in our conversation, open source hasnt been historically well-received by large companies that develop their own software, like Sony. When your business is IT, open source hasnt traditionally been the first thing you look at.

That has changed profoundly. Open source has been embraced by the business community. Every smart business must start looking at cost controls and ways to run more effectively.

PostgreSQL in particular is a piece of open-source software that has never received the public adulation that it deserves, nor the recognition that its robust enough to stand up against Oracle in ways that the more publicly lauded MySQL has never been able to do.

All PostgreSQL ever needed to compete effectively with Oracle was the kind of user-friendly sheen that EnterpriseDB has achieved with its migration-friendly Oracle compatibility.

Heres what it boils down to: With these kinds of options popping up in the open-source space—and I wouldnt be surprised if we saw more in the future—why does it matter whether Oracle sticks with licenses or opts to go for pure subscription?

You can paint a $50,000 pig purple, but its still a pricey piece of bacon.

Does it matter to you whether Oracle goes subscription or sticks with licensing? Are you reconsidering your Oracle infrastructure and including open-source alternatives in the mix? Let me know about it at lisa_vaas@ziffdavis.com.

Lisa Vaas is eWEEKs news editor in charge of operations. She is also the editor of the Database and Business Intelligence topic center. She has been with eWEEK since 1995, most recently covering enterprise applications and database technology. She can be reached at lisa_vaas@ziffdavis.com.

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