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The company had for years relied on Oracle products to manage the photo libraries of its more than 20 million active customers. But as Shutterfly progressed on the effort to switch its systems to internet-based services from Amazon<\/a>.com Inc.’s cloud division, Chief Technology Officer Moudy Elbayadi recognized it also needed to shift its database to something that was easier to use.
“The amount of time and energy that was consumed purely running just the plumbing was immense,” Elbayadi said in an interview. And reviewing other options in the marketplace, Shutterfly found that Oracle’s systems didn’t “fit our desires to have that level of openness and flexibility,” he added.
Shutterfly isn’t the only company taking advantage of the boom in database vendors to diversify beyond Oracle. Businesses are opting to align with newer providers such as MongoDB Inc., Databricks Inc. and Snowflake Inc. instead of Oracle, the sector stalwart, as a result of changes across the enterprise technology landscape.
The move to the cloud is challenging the systems of the past. Newer providers are also making it much easier to adopt their technology directly, alleviating the need for corporate purchasers to negotiate large contracts with salespeople and allowing end users to more easily pick their own tools. Offerings from the newer software makers can also be deployed without large teams of database administrators that are typically needed to support Oracle’s products, a cost-saver for organizations that would otherwise have to fight against other businesses for these in-demand engineers.
The evidence of the shift is widespread. JPMorgan Chase & Co. chose Cockroach Labs Inc. as the database vendor to support its new retail banking application in Europe. Nasdaq Inc. is working with closely held Databricks and Amazon.com Inc.’s Amazon Web Services, among others, in its quest to upgrade from on-premises Oracle data repositories. Alongside AWS<\/a>, database products from rival cloud vendors Microsoft Corp. and Alphabet Inc.’s Google Cloud are also growing quickly. And many businesses, like JetBlue Airways Corp. and Automatic Data Processing Inc., are tapping Snowflake to help store and analyze corporate data to power sales dashboards, among other uses.
“We have actually quite rapidly been reducing our Oracle footprint,” said Nikolai Larbalestier, Nasdaq’s senior vice president of cloud strategy and enterprise architecture. “There are plenty of good alternatives today.”
Collectively, the initiatives are just a small fragment of the estimated $155 billion database market. But it’s evidence of a tectonic shift happening within the industry, one that is threatening the leadership status Oracle cultivated over the past 43 years, ever since co-founder Larry Ellison and his team brought to market the first relational database, or one in which information was organized in tables that could be more easily accessed, manipulated and analyzed.
Still, Oracle remains an industry leader for its ability to provide consistent quarterly earnings growth. With the Austin, Texas-based company scheduled to release fiscal fourth-quarter results Monday, analysts project revenue will increase 4% to $11.7 billion -- far more than its newer, smaller competitors. And the company just completed its $28.3 billion acquisition of electronic medical records provider Cerner Corp., opening a significant new area of potential expansion.
“Oracle presents an interesting opportunity for better-than-expected EPS growth in a choppy marketplace,” Keith Weiss, an analyst at Morgan Stanley, wrote in a report June 6.
Databases are critical to modern life. There isn’t an online service, retail transaction or medical procedure available today that doesn’t have a database supporting it on the back end, keeping track of people’s choices and results. And the corporate dashboards that executives rely on to manage day-to-day operations are propped up by curated data repositories long-sold by Oracle and others.
It’s hard to overstate Oracle’s influence in the evolution of the technology. Despite all the hype of cloud computing<\/a>, many large businesses still run their databases via on-site centers. Companies that were in existence before 2000 are almost certainly still using mainframes. Moving from either is difficult and companies don’t take make such changes lightly. Instead, many are opting for a step-by-step approach: keep the old Oracle systems running, but use another vendor for new projects.
“Someone is not going to wake up one day and say they need to replatform their Oracle database,” MongoDB Chief Executive Officer Dev Ittycheria said in an interview. “It’s not the bulk of our business because we are seeing so much explosion of new apps. But we are seeing a very healthy take-rate of customers migrating off of legacy relational databases like Oracle.”
That’s why, at least for the foreseeable future, Oracle will continue to be a force in the industry. The company’s database business pulled in an estimated $15.6 billion in 2020, according to research firm Gartner<\/a>. Oracle doesn’t disclose financial results specifically for its database business. Much of that revenue comes from providing support and maintenance for existing customers versus new sales.
But Oracle’s influence is slowly fading. While it owned an estimated 27% of the database market in 2019, that fell to 24% in 2020, per Gartner. In the same time frame, Amazon went from 17% market share to almost 21%.
Oracle declined to comment for this story.
Rivals are growing quickly. At MongoDB, for example, sales rose 57% to $285 million in the most recent quarter. Those results, analysts and company executives say, indicate businesses are using MongoDB for increasingly larger projects.
Part of what is driving that change is the emergence of the cloud, which is giving businesses an option to move away from legacy vendors and use more specialized systems that can be tailored to support certain applications or workloads.
“Every time there’s a transition of infrastructure, there’s a recasting of the core markets,” said Dave McJannet, CEO of HashiCorp Inc., a company that helps users manage applications across different cloud environments. “People are not deploying net-new Oracle.”
Databases from vendors like Timescale, for example, excel<\/a> at pulling information within a specified time frame, such as how many sessions one user logged on a gaming platform in the previous five days. In-memory databases from Redis Labs Inc. can run queries in milliseconds by scanning data without the need to save it in a separate storage center, letting a client, for example, analyze the feed from internet-enabled sensor to determine if a machine needs maintenance.
The move to the cloud and changes to the way databases work have escalated demand for developers, a role that is gaining more influence within organizations. In the past, building an application required a team of administrators with high salaries who could work with the standard database to make it fit a company’s needs. That’s not feasible for many businesses.
For example, Andreessen Horowitz-backed video-game creator Mythical Games is sitting at a $1.2 billion valuation, but CEO John Linden acknowledged it would be impossible for them to hire the staff needed to support Oracle.
“Oracle hits us up every week,” he said. But “we’d have to have a massive team in place to run it appropriately.”
With Cockroach, Mythical Games developers are able to immediately build applications and run them. For startups and large enterprises alike, that can be a major cost savings.
“I can’t even hire people if I told them that we majorly use Oracle,” said Yao Morin, chief data officer at JLL Technologies. “People are yearning for better tools.”
Despite the migration from some businesses away from Oracle, there are big reasons why customers stay.
Oracle has very powerful and reliable technology. When Moderna Inc. was running clinical trials for its Covid-19 vaccine, partner Medidata Solutions used an Oracle database to manage and analyze billions of records, a spokesperson confirmed. Oracle also has a deep history of working with the world’s largest businesses. While the mandate to invest in technology is clear, many companies are risk averse and are fine sticking with Oracle instead of undergoing a massive, complicated IT overhaul.
There’s a good business reason the company emphasizes its database: Oracle makes a significant portion of its revenue on existing customers. Every few years, when companies have to renew their contracts, Oracle can raise prices for maintenance and support -- a business with margins hovering around 95%, according to Craig Guarente, a 16-year veteran of Oracle who is now CEO and co-founder of consulting firm Palisade Compliance.
“The entire profit of the company comes from Oracle database maintenance,” he said. With each contract negotiation, “you go from paying $20 million a year, to $30 million a year, to paying $50 million a year.”
Oracle’s dominance has led to questions from analysts over just how much success smaller rivals will have persuading businesses to move away from the company, particularly when it comes to the most critical operations.
Still, the competition is gaining. When American Tire Distributors Inc. was seeking to upgrade its on-premises databases to the cloud, it chose MongoDB. While the company declined to disclose which vendors it used previously, Chief Information and Digital Officer Murali Bandaru said the relational databases that dominated the landscape are no longer equipped to handle the digital-first nature of most businesses.
“We had systems that were built for the last decade of growth,” Bandaru said. “We had to liberate that data into more modern systems.”
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甲骨文的数据库优势侵蚀云竞争对手的崛起
云的移动是挑战过去的系统。新供应商也使它更容易直接采用他们的技术,减轻企业购买者需要谈判与销售人员和大合同允许最终用户更容易选择自己的工具。
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公司多年来依靠甲骨文产品管理的照片库超过2000万活跃用户。但随着网站发展的努力,其系统切换到基于互联网的服务亚马逊com Inc .)云部门首席技术官Moudy Elbayadi认可也需要转变其数据库是易于使用。
”所消耗的时间和能量完全运行管道是巨大的,”Elbayadi在接受采访时表示。市场和审查其他选项,Shutterfly发现甲骨文系统没有“符合我们的欲望有那种程度的开放性和灵活性,”他补充道。
网站并不是唯一一家利用数据库厂商的繁荣甲骨文之外的多样化。企业选择对齐与新供应商如MongoDB Inc .,砖公司和雪花公司而不是甲骨文,坚定,由于跨企业技术环境的变化。
云的移动是挑战过去的系统。新供应商也使它更容易直接采用他们的技术,减轻企业购买者需要谈判与销售人员和大合同允许最终用户更容易选择自己的工具。产品的更新软件制造商也可以部署没有大型团队的数据库管理员通常需要支持甲骨文的产品,为企业提供了一个省钱,否则会打击其他企业对这些受欢迎工程师。
这种转变是普遍的证据。摩根大通选择蟑螂实验室公司的数据库供应商支持其在欧洲新的零售银行业务应用程序。纳斯达克公司正在与少数人持股的砖和Amazon.com Inc .的年代,亚马逊网络服务等,在寻求从本地升级Oracle数据存储库。与AWS、数据库产品从竞争对手云供应商微软(Microsoft corp .)和字母Inc .)谷歌云也快速增长。许多企业,像捷蓝航空公司和自动数据处理公司,利用雪花帮助存储和分析公司数据销售仪表板,以及其他用途。
“我们一直非常迅速减少Oracle足迹,”尼古拉说Larbalestier,纳斯达克的云战略和企业架构的高级副总裁。“今天有不少好的选择。”
总的来说,计划只是一个小片段的数据库市场约1550亿美元。但这是行业内的构造发生变化的证据,一个威胁领导地位甲骨文培养过去43年,自从联合创始人拉里·埃里森和他的团队带到市场第一关系数据库,或组织一个信息表,可以更容易地访问,操作和分析。
不过,甲骨文仍然是一个行业领导者提供季度业绩持续增长的能力。奥斯汀,德克萨斯州的公司将于周一公布第四财季业绩,分析师项目收入将增加4%,至117亿美元,远远超过它的更新,规模较小的竞争对手。和公司就完成了283亿美元收购电子医疗记录提供者cern Corp .),打开一个新的重要领域潜在的扩张。
“甲骨文好于预期的每股收益增长提供了一个有趣的机会在波涛汹涌的市场,”基思维斯,摩根士丹利(Morgan Stanley)的分析师在6月6日的一份报告中写道。
数据库是现代生活的关键。没有在线服务、零售事务或医疗过程可用今天没有在后台数据库支持,跟踪人们的选择和结果。仪表板和企业高管依赖管理日常运营支撑的策划长期售卖的Oracle和其他数据存储库。
很难夸大甲骨文的影响发展的技术。尽管所有的炒作云计算通过现场,许多大型企业仍然运行他们的数据库中心。公司在2000年之前几乎肯定还存在使用大型机。从要么是困难的和企业不要轻易作出这些改变。相反,许多人都选择了一种循序渐进的方法:保持旧的Oracle系统运行,但使用另一个供应商新项目。
“有人不会有一天醒来,说他们需要replatform Oracle数据库,”首席执行官MongoDB Dev Ittycheria在接受采访时表示。“这不是我们的业务,因为我们看到的大部分爆炸的新应用程序。但我们看到一个非常健康的接受率的客户像Oracle这样的关系数据库迁移的遗产。”
这就是为什么,至少在可预见的未来,Oracle将继续是一个力。公司的数据库业务将在2020年估计为156亿美元,据研究公司Gartner。甲骨文公司没有披露财务结果专门为其数据库业务。大部分的收入来自提供支持和维护现有客户和新的销售。
但是甲骨文的影响正逐渐消退。虽然拥有估计数据库市场的27%,2019年降至2020年的24%,每Gartner。在同一时间内,亚马逊从17%的市场份额近21%。
甲骨文拒绝对此置评。
竞争对手也在迅速增长。在MongoDB,例如,销售在最近一个季度增长57%至2.85亿美元。分析师和公司高管表示,这些结果表明企业使用MongoDB越来越大的项目。
的一部分,推动这种改变是云的出现,这是给企业一个选择离开遗留供应商和使用更专业的系统,可以根据支持特定的应用程序或工作负载。
“每次有一个过渡的基础设施,有一个重铸的核心市场,”戴夫McJannet说HashiCorp Inc .的首席执行长,该公司在不同的云环境,帮助用户管理应用程序。“人们不净新增部署甲骨文。”
例如,数据库等供应商的时间表excel在指定时间内获取信息,比如有多少会话一个用户登录游戏平台在前面的五天。内存数据库的复述,以毫秒为单位的实验室inc .)可以运行查询扫描数据而不需要将其保存在一个单独的存储中心,让客户端,例如,从互联网分析提要传感器来确定机器需要维护。
移动到云计算和更改数据库的工作方式已经升级为开发人员的需求,组织内的作用得到更大的影响。过去,构建应用程序所需的一组管理员提供高薪谁能使用标准的数据库,使其符合公司的需求。这是许多企业并不可行。
例如,安德森Horowitz-backed游戏创造者神话游戏坐在12亿美元的估值,但首席执行官约翰•林登承认他们是不可能雇佣员工需要支持Oracle。
“甲骨文每周打我们,”他说。但“我们必须有一个庞大的团队来适当地运行它。”
蟑螂,神秘的游戏开发人员能够立即构建应用程序和运行它们。对于初创企业和大型企业,这可能是一个主要的成本节约。
“我甚至不能雇佣人如果我告诉他们,我们主要使用Oracle,”姚莫兰说,首席数据官仲量联行技术。“人们渴望更好的工具。”
尽管一些企业从Oracle迁移,原因有大客户。
甲骨文已经非常强大的和可靠的技术。现代化公司运行时Covid-19疫苗临床试验,合作伙伴Medidata解决方案使用Oracle数据库管理和分析数以十亿美元计的记录,一位发言人证实。甲骨文也有很深厚的历史与世界上最大的企业工作。规定是明确的投资技术,许多公司规避风险和甲骨文很好坚持,而不是进行大规模、复杂的改革。
有一个良好的商业原因公司强调其数据库:甲骨文使现有客户收入的很大一部分。每隔几年,当公司需要续签合同,甲骨文可以提高价格维护和支持,业务利润率徘徊在95%,根据加伦特克雷格,16年的老兵甲骨文公司现任首席执行官兼联合创始人咨询公司栅栏合规。
“整个公司的利润来自Oracle数据库维护,”他说。每个合同谈判,“你从每年支付2000万美元,到3000万美元一年,每年支付5000万美元。”
甲骨文的主导地位使得分析师提问在多大的规模较小的竞争对手将会成功说服企业离开该公司,特别是最关键的操作。
不过,竞争是获得。当美国轮胎经销商inc .)正寻求其本地数据库升级到云,它选择了MongoDB。虽然拒绝透露该公司供应商过去以前,信息和数字总监Murali Bandaru关系数据库表示,主导景观不再具备处理数字领先大多数企业的性质。
“我们有系统,建立在过去十年的增长,“Bandaru说。“我们必须解放数据到更现代的系统。”
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