Anti-Oracle

I’m starting an Internet wide office pool — pick the date and place a dollar ante on when antitrust will be filed against Oracle.

Seriously, Larry is all but begging for it.

With the integration of Sun into Oracle, many executives — including Ellison — said that Oracle was the IBM of the new millennia.  They waxed techno-poetically about how Oracle, and only Oracle, could provide complete iron-to-apps IT, that they owned the middle of the datacenter.  They claimed their ability to cross-integrate every element of the stack provided Oracle power that no other vendor could offer.

Those statements were followed by amused FTC lawyers grunting.

IBM was the original and last computing monolith.  As Ellison’s Archangels echoed, the IBM of the 1960’s provided everything a customer could want and that IBM’s floor-to-ceiling solution sets created impenetrable barriers to competition.  That is precisely why the federal government sued IBM, and for thirteen bone-grinding years prosecuted Big Blue for allegedly violating the Sherman Act by attempting to monopolize the general purpose business computer system market.  Indeed, the only reason litigation was abandoned was that the market, IBM and computing technology all changed over thirteen years, and IBM was no longer in monopoly mode (though some people slightly less cynical than me believe Ronald Reagan simply ordered a halt to the Federal Lawyer Full Employment Act).

Would we believe today’s FTC and Justice Department would not view Oracle with the same suspicions?   Even under more business-friendly administrations, Oracle faced government intervention when they swallowed PeopleSoft and JD Edwards in a single gulp.  Back then rather feeble justifications, citing SAP as a major competitor, were offered.  With stagnant net profits and leadership changes at SAP, this argument rapidly vanishes.  Toss in Oracle aiding and abetting NetApps (which is positioned to handle the SMB market while Oracle dominates the high-end) and the temptation for the government to intervene will simply grow too great.

It is not a matter of if but when the government decides that Oracle is indeed the IBM of the new millennia.  They will pick a fight, though it is unclear if Larry would lose.  If nothing else, the PeopleSoft acquisition shows Ellison knows how to stand-up to government regulators and win.  The question for the rest of us is when to buy and when to bail out of Oracle stock.  Left alone, Oracle stands to make major money given their dominance.  But like IBM, a decade of litigation will weaken them and their share price.

Me?  I’m going to get rich on my Internet office pool.


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