Co CEO Hurd aims for half or Corporate web apps market. Can he get there?

“Nice to want,” they told me when I was a kid, usually when asking for the impossible.

Recently, Seeking Alpha reported that Oracle co-CEO Mark Hurd wants, and thinks his company can get, half of the web based corporate apps market. To which I say it’s important to have goals and nice to want. But is it even possible to satisfy Hurd’s ambition?

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The web-based apps market continues to grow and more than 400,000 Oracle customers are just entering it now. So there’s plenty of opportunity though I don’t know what that base means in market percentage terms. Consider the database market. Despite having percentages associated with them, the reports I’ve seen nicely hide concrete facts. For instance, according to a Gartner report, “State of the Operational DBMS Market, 2018”

“Gartner estimates that the DBMS market grew by 12.68% year over year (YoY) from 2016 through 2017 to $38.8 billion. Over 73% of this YoY growth is attributable to two vendors: Amazon Web Services (43.89%) and Microsoft (29.54%).”

with

“Oracle, Microsoft, IBM, Amazon Web Services [AWS], and SAP) holding the majority of the revenue at 87.7%.”

Got that? Looks like Oracle leads but doesn’t have half of the market in databases so could it ever get half of the cloud apps market?

Maybe.

Let’s say it’s possible that Oracle or some other vendor could reach the 50 percent mark. But it’s tough, harder than coming up with rent and alimony as novelist Dan Jenkins once had a character observe.

The other option is to gain a growing share of a market with numerous competitors, some of whom are also customers. I think of SAP as both customer and competitor of Oracle as is Salesforce and you could spend time right now listing many similar companies. This is why AWS is such a nuisance to Oracle. It can easily host a variety of apps from other vendors. But Oracle is increasingly becoming a vertically integrated package of apps and DB thanks to its superior automated database. While the DB is better than anything else on the market, customers can run the risk of getting locked in with Oracle.

At least that’s the conventional wisdom from on-premise days. In reality if you go to the cloud, there’s less worry about vendor lock-in because cloud customers are less sensitive to issues of hardware, operating system, database and middleware than on-premise types.

So the answer, I’d say, is that it is possible to garner half of the corporate cloud apps market but…

My instinct is that Hurd’s dream will not materialize for a different reason, one that will let a thousand flowers bloom. The key difference today is that the entire cloud is moving toward utility status meaning that every application and system will in the not-too-distant future be able to network with every other. The network will share data and processes through clever API networking. The result will be lots of smaller successful vendors. This takes nothing away from Oracle or Microsoft, SAP, Salesforce and some others: They’ll still be big.

The model I see coming is much like electric utilities. Power has long been one of those things that modern life can’t happen without, think refrigeration or light and heat. Your electricity provider is probably dominant in your area and maybe it is a monopoly. But your electricity provider probably doesn’t ruffle any feathers on the opposite side of the country though it’s big at home where it counts. In reality we don’t have a national grid, we have a confederation of providers and this group is resilient to major disruption. Information is becoming that way too.

The core question for Oracle or any tech outfit is how it will continue to grow the corporate bottom line. Today’s market is well defined and further growth requires upselling and cross selling, things that Oracle is demonstrably good at. There’s no doubt the company will successfully introduce newer products for its customer base but 50 percent of the market? Count me skeptical.

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