Oracle's earnings in the previous quarter were much lower than analysts ' forecasts

Oracle's earnings in the previous quarter were well below analysts ' forecasts, raising questions about the future viability of licensed software business models. Although Oracle has released its cloud technology offerings, it is still a company focused on selling software licenses.

For me, the Oracle phenomenon is interesting because I believe it sends a signal that it is not a single quarterly result, but rather the periodicity of licensed software patterns, which I call the "peak" year.

Of course, we're not going back to the era before the tech revolution, but the growth of the software industry may have peaked. The reason is simple, it has grown for more than 10 years. The cost of licensing, running, and maintaining software is becoming increasingly intolerable. The licensing software industry will not disappear overnight, but it has reached its peak. From now on, although the security issue is still grim, I think we will see that cloud computing will gradually accelerate.

Oracle's performance in the last quarter was related to the economic downturn, and of course one thing that cannot be overlooked is energy prices. As energy prices rise, they have a negative effect on cooling the economy. A weak economy lowers demand for software, especially enterprise-class software, which is one of the things companies can choose to do in times of economic recession. The longer the downturn lasts, the more companies will be looking for higher-cost software alternatives.

Cloud computing offers this substitution, and companies like Oracle are catching up, and salesforce.com companies continue to product strategies to increase products and customers at an alarming rate. Salesforce, NetSuite and thousands of startups like Marketo, Loud9, jobscience, get satisfaction, Zuora have a very compelling need for software, but not high price software.

So what happened? You will hear two things from me this year: substitution and adaptability. It is a trend and a constant acceleration for purchasing staff to replace expensive in-house software with cheap cloud software. This substitution needs to reduce the cost of business, so that the business more flexible to adapt to the changes in the crisis world.

Substitution and resilience come together to create a new technology: Video chat, the application of VoIP protocol to make chatting on the internet is almost free. The recent New York Times has begun to discuss how video chats are becoming part of a personal lifestyle and can also be linked to corporate users.

Five years ago, video chats were social media. People have started to use it, but need more technology, such as microphones and cameras to implement it. But like social media, they use video chat to shorten the geographical gap, which was not supported in the past. Social media may expand your circle of friends, including loose relationships within your time span. There is only so much time and networking in your life that limits the scope of your circle of friends. Social media can make the circle bigger.

In a similar way, video chats help to keep a closer relationship with people who are geographically limited. As we all know: no eyes, no heart. The two technologies began at the grassroots level, but the tightness quickly became clear, but it was not expected that the business would be fully integrated into a "relationship". Video chats constantly change the minds of the grassroots.

All of this is important in an expensive energy world. Video chats and other forms of derivatives are key alternatives to attracting customer attention, which provides a richer experience than simple calls. The use of these technologies is conducive to the company in the face of energy-driven high cost environment of resilience.

To sum up, it is no surprise that Oracle's earnings are below expectations. Its traditional in-house software peers have not fully awakened. The further question is, how long will it last?

Customers vote for lower-cost solutions in lieu of higher-cost solutions, in which they create new business processes and leverage technology. All this reflects the proximity of the licensing software market to saturation.

TechTarget Chinese original content, original link: http://www.searchdatabase.com.cn/showcontent_58800.htm

(Responsible editor: Lu Guang)