We may argue over #Oracle ’s future prospects, but its current ones are quite rosy, as the enterprise software behemoth is coming off of a fabulous quarter. “Total cloud revenues in the quarter were $1.4 billion, up 66% from last year,” crowed Oracle co-CEO Safra Catz on the company’s June 18, 2017 earnings call (from Seeking Alpha). “Total on-premise software revenues were $7.5 billion essentially unchanged from last year and while new software license revenues were $2.6 billion, down 4% reflecting the increasing preference of customers for cloud.” Taxing customers in Byzantine ways or no, Oracle must be doing something right to make such numbers. Why, then, is Palihapitiya so bearish on its long-term prospects?
Oracle Strategy #1: Locking in Customers
Customer lock-in has been an enterprise software vendor strategy since the dawn of enterprise software – and in the early days, the fact that software was proprietary and lacked open interfaces essentially required companies to buy much of their gear from the same vendor.
Today, in contrast, the prevalence of open source software and open APIs empowers companies to purchase the best tool for the job – and thus, vendors must compete on quality and overall customer value.
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