Saturday, July 25, 2009

Oracle and Sun

Sun recently agreed to sell itself to Oracle. There has been much speculation about how Oracle can make money from Sun. My guess is that Oracle will start charging for Java. Java has become entrenched in enterprise software development, so there are no worries that cost will slow down the adoption of Java. Additionally, the enterprise market is used to paying for software and services, so Oracle would not have to break new ground to get that market to pay for Java.

Oracle has managed to extract money for database products even though there are several free (and open source) databases that are popular. It uses the feature richness and performance of its database product to compete against the free offerings. It also takes advantage of its incumbency to charge for a product because free competitors are not free due to switching costs.
It could use the same model for Java and probably with the same customers too.