Speculation turned into reality yesterday when Oracle confirmed its plans to acquire Micros. Though this is great news for Micros’ CEO and its shareholders, it’s a big problem for smaller companies looking to take back Main Street.
Every single time cloud computing has been introduced into an industry, it has decimated the established leaders. Neither Oracle nor Micros do cloud computing, and if this deal goes through, the combined company will continue to not do cloud computing. I said it last week when this deal was an unconfirmed rumor, and I’ll say it again: This merger will do nothing to help the vast majority of the country’s businesses.
I’m talking about the small business sector, which has accounted for 65 percent of net job growth since 1995. I’m talking about the local merchants, independent restaurants, and brick-and-mortar retailers that, though their needs are consistently ignored by policymakers and their sales routinely scoffed at by national chains, create the character of neighborhoods.
I’m talking about the many businesses that don’t see customers as delivery devices for cash they can redistribute to shareholders. Those that are hungry to compete on a technologically even playing field, because they know they can win.
With its acquisition of Micros, Oracle is affirming its commitment to making, selling, and continually repairing outdated technology that has far outlived its usefulness. This approach, while wasteful, works for big companies with million-dollar IT budgets — but small businesses neither want nor need technology that sits in a room and takes up space. The entire reason I founded ShopKeep was so that small businesses wouldn’t have to go through what I went through when I owned a wine shop and my server crashed while I was on vacation. The store had to close while a vendor physically came to the store to fix the problem.
That’s the risk small businesses run when they don’t embrace the cloud, and they pay an arm and a leg for the liability.
The deal is about securing revenue growth from systems maintenance, not from proactively providing better service. During their last fiscal year, software-as-a-service accounted for just 7 percent of Micros’s revenue and 4 percent of Oracle’s revenue. Revenue from cloud computing was just a portion of that sliver. Contrast that with the big-name clients — chain restaurants, hotel chains, and retailers — Oracle books with the acquisition and it makes sense from the perspective of executives and shareholders. But not from the vantage point of small businesses.
The giants have historically enjoyed success not because they are better or faster, but simply because they are bigger. The cloud is changing all of that, and fast.
Jason Richelson is co-CEO and founder of ShopKeep POS, a provider of cloud‐based point of sale software for managing retail shops and restaurants.