What Microsoft can learn from Oracle: greed and market share

Microsoft is, for once, trying to play nicely. This is why it's failing.

In the consolidating world of enterprise software, Microsoft has much to learn. Oracle's Larry Ellison understands that proprietary software is a slow-growth business going forward, and positions his buying spree accordingly:

Mr. Ellison has explained his deals in language a third-grader could understand. At an investors' conference in 2006, he declared: "We want to be No. 1 in all the segments. This isn't vanity. The No. 1 software company in every segment makes all the money....We never buy anything where it doesn't put us in the No. 1 position or get us in such a strong No. 2 position that we think we can get to No. 1 very quickly....It's No. 1 or it's over."

Microsoft's Steve Ballmer? Perhaps embarrassed to have ambition anymore after too many bouts with the antitrust authorities, Ballmer explains Yahoo! and other acquisitions in terms of cost-cutting synergies and what-not. Namby pamby "we love customers" stuff. Since he announced his not-so-hostile takeover of Yahoo!, Microsoft's stock has been hit 11 percent.

For the biggest vendors, it's just a market share question, and Oracle has been rewarded for aggressively seeking market share for market share's sake. Its stock is up 67 percent in the last five years, while Microsoft's is up 24 percent.

So while Microsoft attempts to persuade the world that it just wants to befriend everyone, Oracle buys, fires thousands of people, and makes a lot of money in the process. Oracle's method isn't pretty and it's certainly not the only way (nor is it the way that I'd personally choose), but it has been effective.

For Microsoft to compete it may have to start owning up to its ambition. It wants market share. It wants dominance. It wants to remove customer choice. Just like Oracle.

It might as well tell it like it is.

Tech Culture
About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.


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