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Archive for July 15th, 2008

Salesforces Switches to Dell/Linus. What’s Next, MySQL Over Oracle?

Posted by Bob Warfield on July 15, 2008

Salesforce will be unplugging the last of their Sun Solaris servers from their SaaS operations this week, according to TechCrunchIT.  That’s quite a big change for Salesforce, and a bit of a PR blow for Sun.  It reflects some important operational realities that the rest of the industry and corporate IT should be watching carefully.

First, vertical scaling is hard in the multicore crisis era.  When cpus no longer get twice as fast with every Moore Cycle, scaling is harder to come by and hardware gets commoditized.  Future scaling has to come from software architecture changes.  Horizontal Scaling, in other words, not Vertical Scaling.  The multicore crisis brings us to an era of many small computers rather than fewer more powerful computers, and its up to the software guys to figure that out.

Second, for a SaaS company, the cost of service delivery is an absolutely critical factor.  Once you have software that runs well and scales horizontally on cheap commodity hardware, you’ve created a huge cost advantage for yourself.  As we speak, the cost to deliver service for the various public SaaS companies is all over the map, but Salesforce has always had one of the lowest if not the lowest cost on the map.  This allows them to either show greater profitability or reinvest the savings in faster growth.

This brings me to my other point.  How long can it be before they investigate swapping out Oracle for MySQL?  As the TechCrunchIT article mentions, Salesforce started with Oracle but there’s been no mention recently about the current status.  It would be a logical further development in reducing costs if they had chosen to eliminate or were working on eliminating the cost of Oracle licenses.  For many SaaS vendors, this is a huge piece of their Cost of Services. 

Can you build industrial grade software without Oracle?  In a word, yes.  Many highly scalable web sites have done so and lived to tell the tale.  It’s more work, but once you’ve done the work the payoff can mean huge savings.  At a prior employer we were actually quite surprised to test several Open Source DB’s and learn their performance was actually not that far off of Oracle’s.  My current employer, Helpstream, has built everything on an Open Source stack and the benefits have been enormous.

How long will it be before we’re hearing that Salesforce has dropped Oracle too?  What’s your company doing to leverage commodity hardware and Open Source databases?

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Fellow Enterprise Irregulars Dennis Howlett, Vinnie Mirchandani, and Thomas Foydel (who first raised the point about brand comfort) make some excellent points on this subject, particularly the issue of switching off Oracle.

One key point that I have personally heard before is that SaaS vendors like to offer customers the comfort of knowing the solution runs on Oracle versus Open Source.  It’s a more conservative stance that plays well in the Enterprise.  Brand matters.  Sun is working hard on the MySQL brand, but they certainly haven’t caught Oracle yet.  As Vinnie puts it, the question is, “whether SaaS vendors benefit from at least the perception that Oracle is more “bullet proof” or do SaaS customers just want results (high uptime, performance etc) and don’t really care what the underlying  technology is – especially if the economics are more attractive?”

Dennis adds some other unique thinking.  If Salesforce wants to be acquired by Oracle then it should stick with the Oracle stack.  The only thing I’d add there is it’s pretty easy to switch from MySQL back to Oracle and much harder to do the reverse.  I think they’d be fine in an acquisition if they were simple careful not to emphasize a switch to MySQL.  They did work reasonably hard to keep the Dell switch quiet, so they may already be on that path.

The second thought Dennis has is that licensing is very complex on these things.  Here again I have to agree.  Just dealing with the legals and other aspect of a relationship with a large Enterprise vendor/technology partner is expensive for a startup.

In both cases, Vinnie’s post title fits:  Does SaaS need Oracle more than Oracle needs SaaS?

Good insights, guys!

Posted in multicore, platforms, saas | 8 Comments »

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