How open source is eating into Oracle et al revenue pie
Not just the smaller companies, big players are also moving away from fancy products with big price tags and choosing open source software.
Bloomberg recently reported how Oracle is heavily leaning on its existing customers as it sees a slump in new product sales. Not just the smaller companies, big players are also moving away from fancy products with big price tags and choosing open source software. As open source becomes increasingly reliable, the threat looms large for Oracle and the likes. The report shows that Oracle's sales of new software licenses have declined for seven straight quarters compared with the same period a year earlier. It heavily relies on revenue from update and maintenance contracts more than from new business.
Oracle does have its open source database MySQL that counters the attack to some extent and also it's cloud computing packages that sell at high margins. But the question still remains, is that enough?
IBM itself recently replaced its Siebel CRM (from Oracle) with SugarCRM that is open source.
Governments all over the world too have been adopting open source over other established players. Company executives at EnterpriseDB - that provides open source PostgreSQL-derived database management products and services, said the number of government agencies in their customer base has risen by 40% over the past year. Cost cutting seems to be the major reason for the transition.
Closer home, the Indian government has also pushed for open source software that will cut licensing costs from big companies.