In a very recent post from two analysts, Peter Goldmacher and Joe del Callar, from Cowen and Co who attended Hadoop World, Cloudera's annual conference, argue that data management is at a discontinuity, where a new set of open source, big data technologies are set to replace legacy proprietary RDBMS-based technologies.
Recent and repeated top line shortfalls from ORCL and TDC have been blamed on the macro. While we believe this to be the case, we also believe these macro issues are accelerating a technology transition from legacy products to alternative data management systems as users are increasingly evaluating products like Hadoop that offer compelling functionality at materially lower price points. While a user's motivation for an initial Hadoop deployment may be cost, end users we talked to spoke of incremental outcomes around better flexibility and functionality that enabled broader value-added use cases to support the business.
The legacy providers of data management systems have all fallen on hard times over the last year or two, and while many are quick to dismiss legacy vendor revenue shortfalls to macro economic issues, we argue that these macroeconomic issues are actually accelerating a technology transition from legacy products to alternative data management systems like Hadoop and NoSQL that typically sell for dimes on the dollar.
We believe these macro issues are real, and rather than just causing delays in big deals for the legacy vendors, enterprises are struggling to control costs and are increasingly looking at lower cost solutions as alternatives to traditional products. What we are gleaning from multiple conversations with users of these new technologies is that regardless of the initial reason they experiment with these new technologies, the outcome is 1) The realization that not only are these products cheaper, but they are more flexible and better suited to many legacy workloads and 2) They offer end users the optionality to expand project scope beyond the constraints associated with legacy product, whether those constraints are cost or capabilities.
Matt Asay quotes Larry Ellison
What we think the data center of the future looks like is really a core of these commodity machines [i.e., commodity LInux servers not powered by Oracle] and a collection of these purpose-built machines [like Oracle's Exadata that serve higher-end requirements].
and concludes that it does suggest, like Ellison himself argues, that we're likely to see the legacy vendors take an increasingly peripheral role in an age of Twitter.