Oracles (ORCL -0.10%) has been in the database business for more than 40 years. Its database software, running on customers’ hardware and increasingly in the cloud, is mission-critical for a wide array of businesses. Moreover, switching away from it to a rival’s offering would be a monumental task that few companies are even capable of completing. Case in point: It took Amazons years of migration work before it successfully shut off its final Oracle database.
While Oracle’s existing customer base, for the most part, isn’t going anywhere, cloud computing has greatly disrupted the database market. The number of database software options has exploded, and it’s never been easier or cheaper to spin up a database instance.
All the major cloud platforms offer a variety of database options. MongoDB‘s document-based database is gaining ground, and a slew of companies are building subscription businesses around managing popular open-source database software like PostgreSQL and MySQL for their customers.
Oracle’s market share has been eroding in recent years as the database market has undergone this transformation. According to market researchers at GartnerOracle’s share declined from 36.1% in 2017 to just 20.6% in 2021.
The company has brought its database software to the cloud, but that’s not enough on its own. Oracle’s core database software can be deployed on third-party clouds, and it offers a variety of database products on its own cloud platform. The problem for Oracle is that as things have stood thus far, it has not often been in the running when developers or start-ups were choosing their database software. It’s just too easy to get started with something else.
Going after developers
Oracle is aiming to remedy this situation by offering a free developer version of Oracle Database 23c. This version of Oracle’s software, which can be deployed anywhere, includes all the features of the commercial release. It has limits — 2 CPUs, 2 gigabytes of RAM, and 12 gigabytes of data are the most developers can throw at the database. But that will be enough for those developers to get a good sense of whether Oracle’s database is the right solution for their needs.
By making it simple and cheap for developers to test-drive its database software, Oracle is likely hoping to grow its developer community and convince developers that its database software has some real benefits. This type of strategy can work wonders. MongoDB, for example, has built its business by offering its database software for free, then making money through its managed Atlas product and enterprise plans.
While Oracle has continually iterated and improved its database software, the company’s database business has been running on inertia for a long time. If the tech giant wants its database software to thrive for the next 40 years, it absolutely needs to get developers on board. By offering a few-strings-attached free version of its powerful database software, Oracle is looking to do just that.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com and MongoDB. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.