March 26, 2013

Oracle's Big Miss: The End Of An Enterprise Era?

For decades the enterprise software industry has grown fat on outsized, upfront license fees coupled with ongoing, high-margin maintenance streams. Cracks in the model have threatened  to dismantle the system for years, as reported by The Wall Street Journal back in 2009, with CIOs chafing at paying for low-value, high-cost maintenance.

But if Oracle's big earnings miss last week is any indication, one of three disappointing quarters over the past two years, the cracks have widened to a chasm. As bellwether for the enterprise software incumbents, Oracle's miss suggests that the legacy vendors may struggle to adapt to the world of open-source software and Software as a Service (SaaS) and, in particular, the subscription revenue models that drive both.


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