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Deputy Mayor of London demands more competition for Oracle, to ‘crack the lock’ it has over the Government

kit Malthouse

Deputy Mayor of London demands more competition for Oracle, to ‘crack the lock’ it has over the Government

Kit Malthouse, the deputy mayor for London, gave a startling speech about Oracle on Wednesday and has called for companies to help release the hold Oracle has on Government organisations, especially with the on-going issues surrounding its inflexibility over license renewal.

He blasted the company and appealed to the crowd to help him “take Oracle down," Talking at the Big Data Breakfast in London, Malthouse claimed to have been “screwed” by Oracle during his time as chairman of the Metropolitan Police Authority (MPA). This received rousing laughter from the hundred or so people in the room. Most of whom appeared to agree with the sentiment.


London Deputy Mayor for Business and Enterprise, Kit Malthouse

When the MPA’s license came up for renewal he found that there was no room for negotiation and was politely told to ‘get stuffed’, an attitude that he puts down to Oracle feeling safe in the supposed knowledge that there was no viable alternative. Malthouse is now calling for a company to “crack the lock” Oracle has over organisations and dismiss the perception that Oracle is the only company able to handle data on the vast volume needed by organisations such as the MPA.

Last year European Reseller reported how BARCLAYS will slash billions of pounds from its annual bill for IT spending a computer systems in a move that could upset technology giants such as Microsoft, Google, Oracle and SAP. 

Another supplier of  specialist middleware and enterprise IT infrastructure, agreed with Malthouse. Joe Kim, UK managing director at TmaxSoft, agreed, however, he contended that this issue extended further than just the public sector. “Almost every conversation we have with existing or potential customers in both the public and private sector reveal a real frustration with Oracle and its lack of flexibility. The market seems to have had enough of the perceived arrogance of such a huge company, in a seemingly untouchable position.

“In other markets we have seen Oracle’s dominance begin to be cut. In South Korea for example it is no longer the number one player in certain areas such as middleware, with more flexible, innovative companies taking market share. Malthouse’s comments are really just the tip of the iceberg when it comes to the amount of concern out there and should act as a wake up call to end users that might at present, be sitting on costly and inflexible licensing agreements.

“There are certainly realistic alternatives out there that can more than match Oracle’s capabilities but with more flexible and realistic pricing and licensing agreements. It seems that Oracle might have rested on its laurels for too long now, organisations are now entering the market that can have a real impact on it’s market share.

“Coming from a South Korean market which has a very different structure to Europe (one in which Oracle no longer dominates in certain areas), we believe that there is real potential for companies to make a big impact in markets supposedly dominated by traditional players. If companies can offer real market changing technology as well as a refreshing and honest approach to working successfully with partners and customers, companies can break up the traditional oligopoly that dominates today.”

Kit Malthouse, formed the idea in 2010 when London was under pressure to save money and implement "austerity measures" and wanted Oracle to lower its prices.

Oracle, knowing the city wouldn't (and probably couldn't) yank out its Oracle database and use a competitor, didn't budge much. 

Malthouse continued “We found ourselves in a situation where there wasn’t really anywhere else to go.”

And that's the love-hate world of enterprise software.

There is only a handful of other databases that could perform on par with Oracle, such as IBM's DB2, and Microsoft's SQL Server. These companies and their ilk know that a database is the heart of an IT system. Oracle has a 48% market share of the most-used kind of relational database. Whilst Oracle's database works well under the most demanding of circumstances, this has given them and the other Tech Titans a position where Government's and  other enterprise won't make a decision to replace such a system with out a lot of planning and finance, they are locked in.

Such a project would be costly, difficult, and full of risk. Enterprise software license contracts with IBM and Microsoft are also very complicated and can grow more expensive over time.