The Oracle Business Model

For those not in the know, "Oracle" here refers not to a divine intermediary but a company that has traditionally focused on providing database products and services for the computer industry. Most people have heard of Sun Microsystems because of Java but comparatively few people know what Oracle is. Recently Oracle acquired Sun Microsystems.

Sun wasn't very profitable for its stockholders, but they were named one of the top places to work in IT by Computerworld. They were also a very open company in comparison to many in the IT industry.

In a recent CNN interview with Scott McNealy, co-founder and chairman of the board of Sun until it was acquired, Scott had this to say about Larry Ellison, Oracle's CEO:

He’s a great capitalist, but not all into that sharing thing and all the rest of it. You have to give the guy credit; he has found a way to extract every dollar he can from customers from every product he offers. He is very impressive, and there are very few who have lasted as long as he has.

OpenOffice, the free productivity suite that competes with Microsoft Office was formerly sponsored by Sun. As a result, it is now also in the hands of Oracle. Naturally, OpenOffice prefers ODF (Open Document Format) for saving files over Microsoft's office formats. In order to allow Microsoft Office users to use ODF files, Sun developed a free plugin that could be easily installed. Although Microsoft Office 2007 has begun to add native support for ODF, it only supports up to ODF 1.0 so far, while the plugin enables up to ODF 1.2. In addition, there are still a significant number of Office 2003 deployments that only have the option of the ODF plugin.

Oracle now charges $90 for this plugin. While the current newest version of the plugin is 3.2, 3.1 is still available for free from Softpedia. I would highly recommend downloading the installer and keeping a copy because it may not be available online forever.

While Computerworld speculates that this may drive some companies that want to use ODF with Microsoft Office to purchase the plugin, I think it is more likely they will just be pushed to switch to the Office native formats as there is no additional cost to open those documents in either Microsoft Office or OpenOffice.