NEW YORK -- The HealthCare.gov debacle poses an existential threat, but it's not to whom you think.
Forget the political or historical future of President Obama or the legislator who voted for it — it's the survival of Larry Ellison's Oracle that's on the line. Because of all the parties involved in building the health exchanges, none has a greater financial stake than Oracle in getting the repair right.
Let's start with one of the biggest problems reported so far in the rollout of the health exchange website — bottlenecks that reportedly occurred in the registration process because of communication breakdowns with the Oracle Identity Manager being used to create accounts.
Identity management software, put simply, is the tool IT folks use to figure out that you are who you say you are when you connect to a computer or network, and embraces everything from passwords to access cards to fingerprint readers to those dopey questions about your favorite childhood pet.
Oracle released a statement that said its product works fine, and that the issue was with the other systems collecting data fed into it. From a marketing perspective, however, that doesn't really matter. Fairly or not, "HealthCare.gov debacle" and "Oracle" have now been linked in the minds of potential customers.
Worse, this is happening at a time when Oracle wants to convince those customers that its tools will work just as well in the cloud as they do in the more traditional, and more closely-controlled, corporate market most of them were originally designed for. And there's no cloud service with a higher profile right now than healthcare.gov.
That matters when the market for identity-management software is projected to grow to more than double to $10 billion by 2018, according to Research and Markets.
Claiming its fair share of a $10 billion market five years from now against competitors like IBM, CA Technologies, Microsoft and Amazon Web Services is one thing for Oracle, which generated more than $37 billion in revenue in its fiscal 2013. Beyond that, there's an even bigger market where it can't afford to have its brand tarnished -- healthcare IT, which will mushroom into a $31 billion business in North America by 2017, according to another research firm, Markets and Markets.
Insurance companies, and private medical research labs, and hospital networks all need databases and the software and service tools surrounding them -- all of which Oracle tries to provide. As trade journalist Lorraine Lawson wrote in 2010, when Oracle beefed up its Oracle Healthcare division by buying the health and life sciences software maker Phase Forward for $685 million, healthcare is "the vertical to watch, an area where spending has stayed strong despite economic turmoil in other sectors."
Beyond that, cloud computing. Oracle still dominates in the overall relational database business, pulling nearly 49% of the revenue made in the category.
That's all good, and Oracle's stock is still rated a "buy" by most analysts on Wall Street, even while there's been a minor shareholder revolt over its executive pay packages. But there are warning signs, particularly in a key sector where it suffers with the image of being yesterday's software in the Internet community. Its core database product, for example, long ago lost credibility with Web companies, supplanted by open source alternatives like MySQL or its successor MariaDB.
(In an odd twist of corporate history, Oracle now owns the MySQL brand via its acquisition of Sun Microsystems in 2009. It was originally developed and released by a Swedish company that was subsequently purchased by Sun.)
Facebook and Google are two of MySQL's biggest licensees. As one longtime Web entrepreneur recently told me, when asked about the industry's database preferences, "Everyone I know uses MySQL and wouldn't even think about Oracle. I have no idea who still uses it."
Far more than any one-time problem with a web site -- even a high-profile one like healthcare.gov -- the long-term challenge for Oracle is to re-invent itself as a brand identified with the future, and not the past. Fixing the site isn't going to make that reputation go away.
But it would be a start.