You may have read about the massive, $1.3 billion copyright-infringement judgment against SAP in a lawsuit by Oracle. The lawsuit revealed details that weren't kind to either party, with SAP emails showing that senior officials at that firm aided and abetted the illegal actions of their newly acquired service subsidiary TomorrowNow, while Oracle's own emails revealed a cavalier, even contemptuous attitude toward its own customers. But there is a larger point to be made from this suit. It may be signaling to us that the enterprise software industry itself is not much longer for this world. Here's why:
This suit is one part of Oracle's ongoing effort to punish the small, independent companies that charge lower service fees for servicing Oracle's own enterprise software applications. Enterprise software customers are often charged enormous professional services fees - in addition to the licensing fees - just to get the complex software to work as advertised, and this happens whether they buy their software from Oracle, SAP, HP, or any other provider. Oracle itself has confirmed that its margin on "maintenance" is 90%. That is a very hard cash cow to give up, just because some smaller, independent firms (like TomorrowNow) come in and try to do the maintenance less expensively. It's also highly abusive of enterprise software customers themselves.
Imagine that you were to buy and install a new central air conditioning unit for your home, and after all the ducts are put in, thermostats connected, and cooling units installed, the system still doesn't work. And now, in order to make sure the system operates adequately, the contractor who sold you the system charges you extremely high service fees, and makes you wait in the queue until their service reps are available. This is the business model for enterprise software today. It is almost the antithesis of trustability.
Contrast this with the open-source enterprise software business. The software is free, developed and coded by volunteers, while the installations themselves are serviced by a variety of maintenance firms. Red Hat, for instance, now owned by IBM, generates more revenue from servicing the open-source Linux operating system than IBM does from its own software patents. Large companies prefer Apache, Linux, and other open-source applications for their mission-critical functions not because open-source software is free, but because it is immediately accessible, and it is serviced by a robust, competitive ecosystem of smaller firms (like Red Hat). If you're a telecom company, for instance, and your system goes down, then you don't want to have to wait until Oracle or SAP or some other giant firm can deploy their own technicians to work on the code at monopoly rates. You want to be able to do it yourself, at competitive rates.
Someday we'll likely look back at Oracle's enormous "win" in this suit as a pyrrhic victory. Their customers are facing ever higher service charges as a result, and the day when open-source solutions will push aside Oracle (and other enterprise software behemoths) is therefore approaching even faster.