Price increases: because they can

June 23, 2008 --

Following suit to SAP, Oracle has just increased their prices 15 to 20%. Why? Because... they can!

SAP, Oracle, IBM have spent billions of dollars over the past 3 years to build the most comprehensive software stack they could. Along the way, they have also acquired hundreds of thousands of customers, along with their contracts. And they promised nothing would change, except for the best. What they forgot to add was "the best... for themselves!"

Typical giant company arrogance? Maybe... but remember what MicroStrategy did 3 years ago when they doubled maintenance prices for all their customers? Now, that's certainly a reasonable size company, but not a software giant.

They are doing it because they can. I bet they have performed statistical analysis of how many customers they would lose, and decided the 20% extra money they would get from the others would outweigh the lost customers.

Why can they do it? Because their customers are locked in by the proprietary model. When you have invested millions of dollars or euros in Oracle or SAP software, you can't just walk away from it. And since you don't have access to the source code, or to an alternative network of service providers who can take over support and maintenance, you are stuck with them, for best or worst. And this year, worst seems to be taking over.

But there are alternatives! In the data integration field, many companies are switching over to open source. For example we related recently how Eurofins gave up Oracle's data integration stack and picked Talend's. Among heavyweight companies selecting open source data integration, we can list Fidelity Investments, Virgin Mobile, US Cellular,, and many others.

What are you waiting for? The next price increase?