Monday, February 11, 2013

Salesforce.com vs. Oracle: When a Supplier is a Rival

How crappy would it be, if your biggest supplier was also your biggest rival?  It turns out, the backbone of Salesforce runs on Oracle databases.


Salesforce.com is understandably pretty secretive when it comes to the extent of their dependence on Oracle, but in October of 2012, Wired ran a story about how Salesforce posted several job listings for engineers with experience in PostgresSQL, an open source database platform.  Obviously, Salesforce is feeling the pressure to ween itself from relying upon Oracle as a supplier and is now looking for ways to become more self-sufficient.  

What sets the tech industry apart from most other industries, is its ability to tap open source technology. Because there is so much open source technology available for just about any developer to use, it removes a lot of entry barriers that would otherwise exist. New entrants no longer have to purchase existing technology or engineer their own from scratch. They can simply take open source technology and adapt it to fit their needs.

The rise of the tech industry has no historical precedent, in that the industry is so protective of its democratic roots.  As soon a first-mover emerges and plants its flag firmly in the ground to stake its claim as the leader in a certain area (e.g. Microsoft, IBM, etc.), someone is close behind, ready to push them off the mountain (e.g. Google, Apple, etc.).  In the tech industry, underdog is king, and you have an entire community of hackers and open-source developers supporting his efforts.

Right now, Salesforce is the underdog - the Apple to Oracle's Microsoft (or possibly even Microsoft's Microsoft).  Developers are rallying around Salesforce, and it will be interesting to see if they can neutralize the threat of its biggest supplier/rival and kock him off the mountain.

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