Is Oracle Starting To Look Like Blockbuster?

I know I'm going to get a lot of flack for what I'm about to say, but when Oracle announced earlier this week that it would acquire Sun Microsystems, I immediately thought of Blockbuster Video.There are any number of smart, revenue and profit-generating reasons why the purchase makes absolute sense. Oracle has been buying up large hunks of the IT universe, from biggies like PeopleSoft and BEA Systems, to little niche software players, in order to patch together the end-to-end, soup-to-nuts solution of which technologist dreams are made. Many of these companies are distressed, and/or seeing the threat of outsourced services, cloud computing, or whatever open sourced, distributed, not-run-here solutions might be hovering along the horizon.

Oracle CEO Larry Ellison summed up his "side" of this looming confrontation: "Oracle will be the only company that can engineer an integrated system -- applications to disk -- where all the pieces fit and work together so customers do not have to do it themselves."

This is when I starting thinking about Blockbuster.

Conventional wisdom in the 1990s was that the video cassette rental business was heading for oblivion, as something called digital distribution was, like cloud computing, a somewhat vague but terribly exciting likelihood. Nobody had the details, but everybody simply knew it was coming down the road, sooner versus later.

So Blockbuster's strategy was to roll-up all the independent video stores, improve the selections and store experiences, and wring massive profits out of doing so. It effectively branded the status quo, so its efforts weren't as much visionary strategy as they were exploitation of a market inefficiency (namely, people thought tapes were going away, even as millions of folks rented them every night, and thereby the bits and pieces of assets were undervalued and inefficient).

It took almost two decades for Blockbuster to finally peter out. Not bad, all things considered. I should be so shortsighted in my moneymaking efforts.

So is Oracle exploiting a market distracted by the distant promise of cloud computing, or is it setting itself up to do battle with a real, closer threat?

Jonathan Salem Baskin writes the Dim Bulb blog and is the author of Branding Only Works On Cattle.