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Java No Cash Cow for Oracle

05.01.2009
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In a recent Forbes.com article, Oracle's Java Problems, Lee Gomes questions whether Oracle can make money off of the Java platform it inherits from the Sun acquisition. At best, Java was really just a PR and marketing vehicle designed to "cause investors to perceive Sun much more as a software company than it really was," according to Gomez.   He continues to add that:

 ...Despite being at the very center of the Java Web bubble, Sun was never able to make money with the software. Nor could it continue to use Java to disguise the fact that it hadn't been able to successfully shift from one hardware business model to another. What reason is there to think Oracle could possibly fare any better?

 

Java's ubiquity no doubt stems from its openness and the community innovation that has propelled it forward. Sure, Sun could've made Java proprietary for the sake of profit, but this would surely come at the cost of the pervasiveness that the language enjoys today. Moreover, would Oracle really care to acquire a new hardware business and some nondescript language named after a coffee bean?

 A multitude of business models have emerged around Java in the last decade and the marketplace of tools, servers and services it has spawned would certainly indicate that Java is profitable.  Oracle will surely figure out a way to financially capitalize on its new Java investment; hopefully, without too much collateral damage to the evolution of the platform.

What do you think? Is Java doomed for an Oracle retrofitting that renders it irrelevant?  Will JavaLobby need to be renamed to LarryLobby?

Published at DZone with permission of its author, Nitin Bharti.

(Note: Opinions expressed in this article and its replies are the opinions of their respective authors and not those of DZone, Inc.)

Comments

Otengi Miloskov replied on Fri, 2009/05/01 - 12:15pm

Calm down people!, Oracle == Java; If Java == fucked up then Oracle == fucked up.

Bob Smith replied on Fri, 2009/05/01 - 12:24pm

Sun *does* make money off Java.  Java billings for Sun were something along the lines of $80 million in the last year.

More proof that the genuises on Wall Street who got us into the current financial mess don't know what they're talking about much of the time.

Anonymous Coward replied on Fri, 2009/05/01 - 12:59pm

 

Sun *does* make money off Java. Java billings for Sun were something along the lines of $80 million in the last year."

 

 

It amazes me how widly held this myth myth is considering they've broken the amount out in the earnings reports for almost a year. Your figure is actually a typical quarter btw - Sun booked around $220 million of revenue from Java for fiscal year 2008 and that's just the licesning recenue. Service revenues for the year were $5.2bn which is nice.

 

 

Mike P(Okidoky) replied on Fri, 2009/05/01 - 2:17pm

Oracle can provide complete enterprise solutions, which now includes them providing the actual JVM too now. A one stop shop. Java is *hugely* important for Oracle.

I think what we all really need is for Oracle to approach us, and make some commitments, and provide some reassurances. Oracle needs to know if they can rely on all of us to keep Java reaching out in places, and we need to know if we can rely on Oracle providing the foundation that we ride on.

Bad would be utter silence. So far, I'm seeing utter silence. I'm nervous. Perhaps JavaOne will make me feel better. All I can do I guess, is twiddle my thumbs.

Ray Walker replied on Fri, 2009/05/01 - 4:39pm in response to: Anonymous Coward

Thanks for pointing this out.  I had fell to the myth, as well.

Dmitri Trembovetski replied on Fri, 2009/05/01 - 8:05pm

Java on desktop alone is supposed to bring close to 250m this year (this is _excluding_ licenising).

 

Joshua Marinacci replied on Sat, 2009/05/02 - 12:34am

Keep in mind that both Sun and Oracle are *legally required* to keep silent and continue competing with each other until the deal is finalized and passes regulatory approval. In the mean time, JavaOne is going to be great this year. We are going to have some really good stuff to show you.

Robin Bygrave replied on Sat, 2009/05/02 - 6:33am

Purely my opinion of course but... to put another spin on it... Larry loves to compete against Microsoft. Said another way - I would suggest that for some time Oracle has seen Microsoft as their strongest long term competitor.

The way I see it, Java has been so succesful in the enterprise area (and with linux and apple getting stronger) people may have forgotton how strong Microsoft was 10 yrs ago.  Microsoft have been lifting their game and I'd say they are still at the fore front of Oracle's long term plans. Ensuring Java's success continues is a mechanism to keep Microsoft out of the enterprise and that has a lot of long term value to Oracle that can't be counted in dollars.

So I see investing in ... JVM, Java, JavaFX/Swing/Nimbus, OpenSolaris etc ... as a long term strategic move against Microsoft. In that sense it even makes sense to get as much involvement from the likes of IBM and the Java community as possible. Keeping *nix / jvm dominant in server land... and attacking the UI/Desktop/Mobile/RIA world with JavaFX/Swing/Nimbus etc.

I think its Larry's best move yet.

Raw ThinkTank replied on Sat, 2009/05/02 - 7:08am

Since there are no Java Processors by Sun, there is no cash from Java. And since world is not mad about Java due to those missing Java processor. They cannot charge license on mobile for running those programs on mobiles java chips.

 

 

So Oracle must make Java processors and kill intel M$ both at the same time and win mobile too.

Martin Wildam replied on Sat, 2009/05/02 - 4:50pm

Thanks to the article and all those very good comments!

I think that now Java will get even more important with the rising amount of users switching from their Windows desktop to something else like Mac or Linux.

And since I started with Java, I also feel very comfortable with the large community of smart people. Thanks to you all!

JeffS replied on Sun, 2009/05/03 - 10:36pm in response to: Bob Smith

Forbes writers know nothing about technology.  So why should we take what they say about Sun's Java business seriously?

Sun did make money on Java - to the tune of $250 Million + a year (according to the financials posted by Schwartz in his blog).  Thing is, compared to the multi-billion dollar hardware, this isn't all that much.  Also, compared to the JEE App server business that IBM and Oracle/BEA (and to a lesser extend JBoss), which is a market in the billions, Sun's Java revenue looks puny.

And the ROI probably was never that great, considering how much R&D money Sun poured into Java.

Jeroen Wenting replied on Mon, 2009/05/04 - 1:07am

ROI on Java itself was probably not that great indeed, but consider that Sun probably sold quite a bit more hardware and services around that hardware (and the associated Solaris licenses) than they would have sold without Java, and the picture starts to change.
Of course such effects are extremely hard (if not impossible) to put into numbers, which is why they don't appear on earnings sheets as such.
And because they don't appear on earnings sheets, many in the corporate analysis sector (which is where Forbes move) don't take them into consideration. I've myself seen departments closed down, projects cancelled, because they didn't themselves turn a profit. That the existence of that product helped sell other products (or in the case I was most involved in helped draw business to offices that otherwise would have ended up with competitors, which was the core purpose of the project) is often completely overlooked by those making the decisions about whether a department or project is to be scrapped.
In part that's because they have tunnelvision and don't look beyond the immediate quarterly earnings which dictate payouts to shareholders, in part it's because the people making those decisions often don't know what a project is all about. All they see is that department X deploys Y people and has a profit of Z. That's below the corporate standard so it gets axed.

Jose Maria Arranz replied on Tue, 2009/05/05 - 2:41am

I agree with Jeroen, without Java (and web), IBM, Oracle and Sun would be very small companies trying to survive in small niches in a world dominated by Microsoft and Intel, we have forgotten the pre-Java time, when Windows and SQLServer, alongside Intel processors, were aggresively eating market to IBM-Oracle-Sun with no hope for them. Then came out Java and web to save the non-Microsoft/Intel industry.

In summary Java is a "industry saver" and has made tons of money indirectly to many including Sun.

In essence this has not changed, furthermore, Java and web are today the dominant platforms and you can pick your preferred database engine no longer attached to a specific processor and operating system.

 

john green green replied on Mon, 2009/10/26 - 3:27am

More proof that the genuises on Wall Street who got us into the nike shoes russiacurrent financial mess don't know what they're talking about much of the time.

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