How Oracle Wants It

We’re getting more of a taste as to the “new reality”. Most of the news is of the “Surprised, but knew this was coming” variety.

Motley Fool has a good write-up about the Oracle earnings announcement and how Sun’s impacting the bottom line as well as changes coming. Some of the include getting rid of all unprofitable resale deals, such as Veritas and Hitachi products.

CIO Mag dips into the new “All or Nothing” support model being adopted. The policy (PDF) states: “when acquiring technical support, all hardware systems must be supported (e.g., Oracle Premier Support for Systems or Oracle Premier Support for Operating Systems) or unsupported.”

The policy goes on with all sorts of horrors, such as heavy penalties 90-days after contract lapse, including “your hardware system must be qualified as service-ready before technical support can be reinstated” and “The reinstatement fee is equal to 150% of the last-paid support fee, or 150% of the list technical support price for the covered hardware system, prorated from the date technical support is being ordered back to the date technical support lapsed”. Ouch.

So how do you offer a product for free and then ensure that people pony up the cash? This sounds like the way. I haven’t seen anything about OS support for non-Sun systems (Dell, HP, etc) but I would assume they would have to support at least some of them due to prior agreements over the last couple years.

I’m sure we’ll be learning even more very soon. One thing is clear, Solaris just got too expensive for the SMB. The low income customer base that Sun’s tried to build up over the last couple years is SOL.

74 Responses to “How Oracle Wants It”

  1. Jason J. W. Willliams says:

    Just waiting for the shoe drop on OpenSolaris…

    Time to buddy up to your Dell or HP rep if you want silver hardware support…

  2. Dave says:

    This sucks. Truly, it sucks.

    What are your actual thoughts and feelings on this though Ben, specifically the observation that Solaris is now out of reach of mere mortals?

  3. benr says:

    If Oracle follows form, Solaris will continue to be “free”. The Oracle database is “free”… you can download it now. However, Oracle is a master at ensuring people don’t run it for free. To be honest, its not a horrible model… its just a bit brutal. Oracle is super expensive… but its still the #1 commercial database.

    So if mere mortals means home users… we’re safe. If mere mortal means small companies who install it here and there and try to avoid paying for it in commercial use, those guys are in trouble.

  4. Graham says:

    I guess that old phrase “ubiquity first, profits later” doesn’t get used much at Oracle HQ. This undoes all of Sun’s recent efforts to spread Solaris and OpenSolaris to the masses. They will make a short-term gain to keep shareholders happy, but we’ll always wonder what could have been. They’re certainly not following Google’s business model.
    I wouldn’t compare this with Oracle DB, I’d compare it with Oracle Unbreakable Linux. Hands up who would list that as their #1 choice of Linux distro, anyone? Hardly a runaway success story. Now Oracle Solaris under the same terms? Ugh!

  5. Phobos says:

    Ben, those SMB obviously weren’t enough to save Sun. And Oracle is where the money is. Sun sold systems many times with no profit margin (Universities, HPC deployments, and others), Solaris was free for everyone to download and use, Sun went almost 100% open source… And what did that mean for Sun? No income at all… And even losing money in some cases.

    Oracle knows how to make money, they are not a charity. But they are not stupid. OpenSolaris is here to stay. But if you want premium, it comes with a price tag.

  6. JeremyT says:

    It’s not surprising, but still (from my own personal perspective) disappointing.

    This isn’t just a dichotomy of “enterprise big iron” vs “garage startup” either. My employer (education based) has money, they run Solaris on big stuff, and they’ve got a ton of lesser things that *could* use Solaris. Oracle’s emerging model not only excludes SMBs, but it also changes the equation for any larger organization that might consider standardizing their “lesser” stuff on Solaris too.

    Basically, it means we’ll be seeing a lot less Solaris deployed by *any* size business going forward.

    I can’t help but think that x86 and Linux will keep chipping away at this segment from the bottom up. Sun saw that as a threat, and decided “if you can’t beat them, join them.” By appearances so far, Oracle is just going to completely ignore that threat, and just hope that enterprises will pay a massive premium for Sun software and hardware forever.

    I’m personally unconvinced that either strategy is sound in the long run. I guess we’ll just have to wait and see.

  7. Carmine says:

    Ben, I agree with your observation that Solaris is “too expensive for the SMB.” However, important reasons are not related to the structure of the support contracts. Most small businesses (> $14MM in annual revenue) can not afford Solaris because the expenses associated with developing organizational proficiency in installing, using and managing another or different O.S. are extremely prohibitive, even if vendor support were relatively inexpensive. Moreover, many consultants and other professionals in North America that support small businesses do not have any professional experience in Unix-family O.S.’s.

    I have observed this condition in much of the lower-tier middle market, as well.

    However, small businesses generally do not “try to avoiding paying for [software] in commercial use.” Many small business principals and managers are mistrustful of free software. This difficult problem (i.e., how to “crack” the small business market – a market dominated overwhelmingly by one competitor) represents a potentially lucrative opportunity for those who solve it. However, the difficulty and low success rate may dissuade those who are accountable to powerful institutional investors (e.g., IBM, Oracle or Red Hat) from trying.

    Anywayhanks for maintaining this blog. I enjoy reading your posts regularly and hope you will continue to share your insights into OpenSolaris.

  8. Carmine says:

    Sorry, the above comment should read, “small businesses (< $14MM in annual revenue) can not afford… “

  9. RJSmyth says:

    Serious question for existing Solaris admins; Should I be rethinking a career in Solaris? Currently I am a Windows tech at work and a Open/Solaris user at home. Seems to me the only real Systems administrators are in worlds other than Windows, loved what Sun was doing but looks like Oracle is going to undo all that. I wasn’t that familiar with Sun in their heyday but from what I have read the world really lost out when Oracle bought Sun. Maybe I should learn a BSD as it seems that is a favored point for migrating to when coming from Sun but the features…

  10. Nickus says:

    But what does the “all hardware systems must be supported or unsupported” really mean? Do I have to provide a list to Oracle of everything in my server room and list those as supported or unsupported.

  11. Phobos says:

    @JeremyT: Unlike Sun, Oracle is embracing that thread… I think you missed the part where Oracle sells and support Linux.

  12. JeremyT says:

    @Phobos: a good point. But as somebody who wants to see Solaris widely deployed, it’s little consolation, so you can forgive me for failing to consider that :)

    As an aside – I had largely assumed Oracle would kill any advanced Linux based projects (such as BTRFS) and try to squeeze customers onto Solaris if they want that kind of functionality. It seems like by continuing to make Linux better they’d be cannibalizing their own high end Solaris market. Guess that’s another “wait and see” situation.

  13. paulo says:

    This is a very sad news: as you said it seems that oracle is building the same selling/marketing for solaris as it did for oracle :-(
    No question that any SMB on solaris will move probably to linux and never look back.
    I am trying to build a small business and went all the way with solaris and opensolaris for lighter stuff. All this is now dead: if I’ll start making money, no way I can buy solaris licences for all the machines, just too expensive; and yes I am not ready to have some of my stuff on solaris and the rest on linux/bsd. It doesn’t make any sense too me (I am just too small for that).

    So I’ll go redhat, start building my infra with it, adapt my growing needs to linux … And never look back: no way I will train the staff and adapt all the procedures/stuff I have already built.

    The new model adopted by oracle makes sure that the big players already paying for solaris will continue paying for what they have.
    It did not pay off a few years when sun was doing it, I do not see why it would pay off now: solaris was too expensive and linux just went all the way through the smalll door: started small, deployable and free. It took some time, but now it’s there and won’t go away any time soon.

    Oracle will probably end-up doing what IBM did: “you my big-beautifull iron machine with a big insurance contract on it ? sure, but it comes with AIX – for x86 you can still buy from me, but I’ll put linux there”. Worked some time with IBM on their ppc series and I have no fond memories of it …

    Sounds just horrible to me.

    Solaris is an amazing os, my favorites being zones and zfs and from my point of view unmatched no matter what you compare it to.
    But right now I am more concerned on how to put my stuff on linux before investing and cutting off any more time (that’s what I have now instead of money) on solaris.

    sad, really sad – we are back 1999 minus the internet bubble …

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  15. David Brodbeck says:

    @RJSmyth: Diversify, diversify, diversify. Learn as many different OSs as you can. Not because Solaris might go away — I doubt that will happen any time soon — but because there are an awful lot of mixed shops out there, and people who are comfortable with multiple operating systems are quite valuable to them.

  16. john beckner says:

    @RJSmyth – I second David Brodbeck’s advice. If you are already using Solaris at home, continue that. But learn some enterprise Linux too. We run both at current and lastjob. BSD is fine, but it’s a lot more common to see dozens of Linux servers and a few or no BSD in a big shop. And Solaris has some killer features baked in that big shops appreciate. Your savvy IT departments that have to manage storage are not going to let ZFS + Compression or Deduplication go easily.

  17. UX-admin says:

    “Ben, those SMB obviously weren’t enough to save Sun.”

    They weren’t enough because Sun didn’t execute. They should have offered hardware by the METRIC TON, but instead ended up trying to peddle their expensive memory, disk, and processor upgrades to barebone, useless systems.

    That had FAIL written all over it, and it FAILED. They wanted to go for margin instead of volume.

    Complete misunderstanding of SMB customers.
    Complete misunderstanding of market conditions.
    Complete misunderstanding of consumer demographics, which have changed significantly since the last century.

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