I don’t think they can weather delays like this. I have family in Port Washington and visit there often. From what I’ve seen public opposition to this project is intense and growing. Every day this project is delayed is another day for local officials to find new ways to hinder it.
It must be disconcerting to be an Oracle customer right now - knowing your license fees are not going to lead to improved products or better support. Instead they’re financing some rickety datacenter building scheme.
Feels like Oracle outsourced all their datacenter construction to organizations that were not nimble enough to line up contingency plans for alternative power sources and expected grid connections to happen "like normal".
Meta, OpenAI, Anthropic, SpaceX even Google have been more hands-on and haven't seen these power issues plaguing Oracle, probably because they have an actual internal A-teams on it, not lethargic contractors.
My guess is that not meeting these commitments will actually help Oracle.
Oracle has been sitting on their heap of cash for a while now. They've had a lot of locked-in customers for a while. But as they started to bleed customers they looked for new revenue streams. I think the lawsuits filled that niche for a while
Eventually transforming themselves into an AWS clone became the plan, and last year there were all sorts of deals announced. But a lot of those deals were basically expectations, and Oracle didn't have a lot of guarantees that they were going to get the spend. They probably figured they had the OpenAI business and if that didn't pan out then they could offer database services to their existing customers. But to get any hope of any of that they need to lay out the cash upfront, to build the data centers and fill them.
But their existing customers hate them. Nobody will switch to Oracle willingly, certainly not for any kind of hosting. And Oracle bonds are Rated at BBB-, one step above junk status, so nobody wants to lend them money. They're shedding employees as fast as they can because they can't raise cash.
Ultimately, I expect them to renege on their datacenter contracts. But I think that'll probably be fine, because nobody was really going to use them anyway. The penalties are probably minor and Oracle will walk away from this whole thing without any of the obligations, and with a much smaller workforce that costs far less to maintain.
And then they'll go back to their rent-seeking. My guess is that in 2 or 3 years you'll see Oracle try to do a bunch of acquisitions of the modern tech stack to try to regain relevance and re-capture some of their lost market, and then go back to their old rent-seeking behavior.
I hear MongoDB recently lost their CEO; bet that makes them a good chunk cheaper......
Meta, OpenAI, Anthropic, SpaceX even Google have been more hands-on and haven't seen these power issues plaguing Oracle, probably because they have an actual internal A-teams on it, not lethargic contractors.
Oracle has been sitting on their heap of cash for a while now. They've had a lot of locked-in customers for a while. But as they started to bleed customers they looked for new revenue streams. I think the lawsuits filled that niche for a while
Eventually transforming themselves into an AWS clone became the plan, and last year there were all sorts of deals announced. But a lot of those deals were basically expectations, and Oracle didn't have a lot of guarantees that they were going to get the spend. They probably figured they had the OpenAI business and if that didn't pan out then they could offer database services to their existing customers. But to get any hope of any of that they need to lay out the cash upfront, to build the data centers and fill them.
But their existing customers hate them. Nobody will switch to Oracle willingly, certainly not for any kind of hosting. And Oracle bonds are Rated at BBB-, one step above junk status, so nobody wants to lend them money. They're shedding employees as fast as they can because they can't raise cash.
Ultimately, I expect them to renege on their datacenter contracts. But I think that'll probably be fine, because nobody was really going to use them anyway. The penalties are probably minor and Oracle will walk away from this whole thing without any of the obligations, and with a much smaller workforce that costs far less to maintain.
And then they'll go back to their rent-seeking. My guess is that in 2 or 3 years you'll see Oracle try to do a bunch of acquisitions of the modern tech stack to try to regain relevance and re-capture some of their lost market, and then go back to their old rent-seeking behavior.
I hear MongoDB recently lost their CEO; bet that makes them a good chunk cheaper......