Oracle avoids SaaS to keep margins up, raise prices
Posted by: admin in Business and PoliticsOracle is a shrewd, shrewd company. As reported by Sarah Lacy in Businessweek, Oracle long ago recognized the potential for Software-as-a-Service, both to liberate customers and to decimate its profits. Noting that the two may very well go together, Oracle has demurred from jumping into SaaS:
On-demand software has turned out to be a brutal slog. Software sold “as a service” over the Web doesn’t sell itself, even when it’s cheaper and actually works. Each sale closed by these new Web-based software companies has a much smaller price tag. And vendors are continually tweaking their software, fixing bugs, and pushing out incremental improvements. Great news for the user, but the software makers miss out on the once-lucrative huge upgrade each few years and seemingly endless maintenance fees for supporting old versions of the software….
Why isn’t Oracle a bigger player in on-demand software? It doesn’t want to be, Ellison told the analysts and investors.
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