August 31, 2004
Cheapware
An article published in the Forbes magazine talks about Cheapware. There are many open source and other alternatives for proprietary software available at a very cheap price. These range from operating systems (Linux competing with Microsoft, Sun Microsystems) to webservers (Apache competing with Microsoft and Sun) to databases (MySQL competing with Oracle and IBM) to user apps such as word processors (Staroffice competing with Microsoft). People in the software industry scoffed at them till recently as 'toys of hobbyists'. But, more and more corporations are slowly moving to the cheaper software alternatives.
The article highlights Sabre's move from Oracle to MySQL databases. Sabre is not a small company, they manage a big chunk of airline reservation system. They are slowly moving their whole operation to MySQL at a saving of more than 80% in software costs. CEO of MySQL tries to explain this switch to cheaper software.
"There's just no reason for customers to be paying so much for software," says Marten Mickos, chief executive of MySQL AB, in Uppsala, Sweden. "Software is not rocket science. It's a commodity. The business has been overglorified for 20 years."
...
Executives at Microsoft and Oracle dismiss MySQL as too puny to handle serious corporate projects. The Swedish company will likely gross $20 million in 2004; Oracle generates that much every 17 hours. "You don't want to use products from companies that perceive themselves as commodity suppliers to handle your data," says Robert Shimp, vice president of technology marketing at Oracle in Redwood Shores, Calif.Mickos says he's glad bigger rivals dismiss his company. While they're not looking he has been winning business in the data centers of FedEx, Ingram Entertainment, Lufthansa, NASA, Omaha Steaks, Sony, Suzuki and UPS.
If this trend continues (I think it will), there are difficult days ahead for software companies unless they slash prices drastically and get competitive with the cheapies. Companies like IBM and Microsoft have diversified their business in other areas as well and they'll do OK. But, this could spell doom for software-only businesses like Oracle, Adobe etc.
Posted by Parag at August 31, 2004 03:10 PM
oh brother where art thou!!
Linux was going to replace e'thing.. but when IBM and DELL got the rights for the thing they jacked up the prices.. I mean big companies would want big prodction support which they cant provide and blah blah.. i would think if this company becomes a threat oracle or microsoft would eat it so quickely that you will not even hear a burp.. I mean the whole open source and cheap code is a fine and dandy concept but its intellectual property.. i guess its like saying pharma companies should do all the research and then release all the secrets so everybody else can use it to suite there needs.. i mean no matter what industry it is all they want to do is maximize profits they are not out there to do social service.. i guess its kinda like drug industry, people tend to go for a product by a big company even if its generic.. mysql can be a niche market player but i believe its not going to be a trend setter in the software industry.. data is everything for companies they wouldnot want to mess around with it..
Most cheapware are only cheap in their price and not in their quality and they're giving corporations sleepless nights. OpenOffice, MySQL, PHP, Apache, WordPress, Drupal, TUGZip, GMail, Gnome, Evolution, Linux and so many more. Each of these take on the commercial giants in the industry and match shoulders if not excel.
Posted by: Chetan at September 3, 2004 02:08 AM
