Dear Larry:
We read your WSJ interview today in which you say "Microsoft is clearly a survivor (in the software industry), Oracle is clearly a survivor, as is IBM, as is SAP. I think I'm finished."
If you had not included SAP in that statement we would have thought you were just talking about the database software market, but you are broadly talking about software and we, the "non-survivors", are puzzled:
a) The 4 vendors you mention TOGETHER do not provide even 10% of software for insurance claims processing, bank trading systems, mortgage processing, telecommunication billing, utility billing, patient and health care accounting and several other enterprise applications. Lifeblood systems for our economy.
b) The 4 vendors you mention TOGETHER do not provide more than 25% of all testing, security, storage, systems management and a whole variety of other infrastructure software
c) Service Providers like Accenture, Infosys and others write way more code each year than the 4 of you do. They build custom apps, extensions to your functionality, clean up your buggy code. That is software too. You may not agree but over 70% of Oracle's own revenue comes from such support and services.
d) FEW of the major software innovations in the last few years - planning and optimization, eProcurement, CRM, web services, several other areas has come from these 4 vendors. You have always been "fast followers". If only the 4 of you survive, it is a scary proposition for all our customers.
e) Adjusting out IBM's hardware business and Microsoft's games, MSN and other personal software business, the market cap for the 4 vendors makes up about 35% of the various Yahoo Finance categories for business software and services. That does not even account for the many private companies in the categories.
Larry, we love you. You have been good for our industry. But, a few years ago you dismissed some of our companies as "features". We are still around.
Our investors would like to see it, but not sure how with 35% of the market cap, the 4 of you will consolidate the rest of us in the 65% category.
We would rather see the four of you become well behaved Tier 1 suppliers and work better with us Tier 2 and 3 suppliers - and even compete with some of us for Tier 1 business.
Respectfully,
"The Living Dead"
Accenture, Adobe, Ariba, Apache, BEA, BMC, CA, Cerner, Cognizant, Cognos, Compuware, Epicor, FiServ, Infosys, Intuit, Lawson, Mercury, Novell, Parametric Technology, Progress, RedHat, salesforce.com, SAS, Siebel, SSA, SunGard, Symantec, Tibco, TCS, Wipro and hundreds of other business software and services companies
Author's Note: I put a revised, expanded version of this blog on July 18, 2005 on Sandhill.com - Larry Ellison's version of "Survivor"
