Is new competition shaking foundations between Oracle and its independent software vendors?
ISVs are enticed by larger profit margins thanks to new tech companies offering viable alternatives, says TmaxSoft
New enterprise software providers entering the UK market have created a number of opportunities for independent software vendors (ISVs) to significantly increase their profits. Partnering with these new tech players enables ISVs to move away from expensive and complicated licensing agreements that are traditionally associated with the Silicon giants, according to TmaxSoft.
Databases act as the backbone for ISV software applications that run on operating systems. Up until now, large software companies have been the bloodline for ISVs, which has been great for the big players but crippled ISV profits.
Joe Kim, TmaxSoft UK Managing Director, comments: “There is a general perception that only Oracle databases can cope with the amount of data ISVs need to build their applications. To put it into perspective, if we think about how many programs run on a Windows or Mac operating system, it gives us a good idea of the sheer number of applications that ISVs run. They depend on databases that are fast and reliable, as the more working applications they have, the more valuable they are to their end-user.
“However, there is a rather large fly in the ointment. In order to run applications that integrate with Oracle’s databases, ISVs need to buy licenses. As with some types of Oracle licenses, it is our belief these are arguably complicated and expensive and significantly reduce profit margins. While ISVs are increasing their number of applications to boost profits, the licensing cost that this requires is dragging the margins down.”
With advanced enterprise software providers entering the UK market from new technology hotspots such as Asia, they are able to offer viable alternatives to Oracle, but without the headache of complicated licensing structures. ISVs can significantly increase profit margins while still maintaining high technical standards for their applications.
Kim concludes: “This is the first time we’re seeing companies emerge from corners of the globe that are offering viable alternative (and cheaper) software to Oracle. ISVs can build with these databases, create as many fully functioning applications as they require, and can take home a greater percentage of their sales.”
