Posts Tagged ‘ellison’


I honestly thought I was going to have to wait longer to hear anyone from Oracle talk about seriously focusing the company’s hardware and software lines on the Cloud.  True, they’ve been saying cloud-like things for a couple of years but the pronouncements were features and functions that added something to the cloud discussion without going “all in” as some others in the industry have said.  But last night CEO Larry Ellison did what I’d forecasted last week in a way that is uniquely Oracle but nevertheless a good, defensible (and somewhat debatable) position.

Here’s what I said last week in my forecast,

It seems this family of hardware (Exa-hardware) is built and optimized for very big jobs involving terabytes of data and gazillions of users.  That’s exactly the kind of stuff the growing cloud computing movement might gobble up.  Currently data centers are masses of commodity servers in racks running feverishly but without a layer of sophisticated management that would optimize their utilization and reduce costs…

And,

The next logical step would be to endorse the Exa-hardware as a sustainability tool for a power hungry planet.  I’m looking for some sustainability messaging from Oracle and it could even happen…

And,

Sustainability is not alien to ideas like mobility, cloud, social and analytics, you can’t separate them.  I think if Oracle wants to maintain its leadership position with many of the largest companies in the world, it needs to put a stake in the ground and become a thought leader here…

So last night, Ellison took aim at the cloud and announced Oracle 12c a database for the cloud that supports multitenancy, if you want it, and he announced the Oracle Private Cloud running on Exa-hardware and delivered as a tight bundle to customers who want to get to the cloud, simplify their lives, and not fret about managing all that stuff.  He also announced Exadata 3, which can hold up to 26 TB of data – “All your databases.” The cool thing about Exadata 3 is that the 26 TB is all silicone based memory, it doesn’t count the spindles that are rapidly becoming secondary in a high performance enterprise environment.

He made some traditional arguments about the cloud being more efficient and economic and at some points came close to claiming credit for inventing it.  Truth is he did have a hand in inventing modern cloud computing as a very early investor in Salesforce and NetSuite and as the Zen master for Benioff and Nelson.  But his skin in the game had been relatively minimal.

Now, while there is plenty to like from a sustainability perspective, it should be acknowledged that what got announced is a bunch of half steps designed to get enterprise data centers into the cloud without much disruption.  I think this means that Oracle, for the moment (which will be about a decade) will not be aggressively selling the virtualization that comes with multitenancy and as a result there will still be a great deal of wasted power and underutilization in some cloud data centers.

But in a decade we could see a switch flip and everyone will get religion about power consumption and pollution and the switch to virtualization will happen very quickly because some very large companies will have been prepositioned for the change.

Actually a decade might be a long time and 6 or 7 years might be more like it simply because Oracle has many competitors going to the cloud, most notably Salesforce, and that will accelerate the timetable.

The next step, which has to come this week, will be for the company to shift gears to software – cloud based software – that makes the cloud even more attractive.  Look for this to happen especially in the CX Summit or whatever they are calling it, on Wednesday.  That will be the day that Anthony Lye talks a lot about how the companies he bought last year – like RightNow and ATG and others – are making the Oracle cloud a serious competitor.

Achilles’ heel is still Fusion.  What’s up with Fusion?

Finally, many, if not most of the big cloud computing companies are running fault tolerant data centers using conventional racks of blade servers and disks.  That’s giving us 3 to 4 9’s of reliability but I think before we can hope to get to the 7 to 9 9’s that will make cloud truly ubiquitous and universal utility grade computing we’re going to need some re-architecting.  Regardless of what you might think of Oracle’s approach to the cloud, the hardware is an appealing approach for that alone.

Oracle likes to message that 20 out of 20 of the top banks/pharmaceutical companies/whatever, use Oracle and it wouldn’t surprise me if they’re going for 10 of the 10 biggest cloud companies.  That will take some work and given the multiple levels of competitiveness and lack of love between the players, that might take even more than a decade to happen.


Larry Ellison recently bought 98% of Lanai, a small Hawaiian island off Maui.

No, I am not making this up.  If I could write fiction like that I wouldn’t be in this business.  Or maybe I would but I’d be better paid.

At any rate, the article in the New York Times says Lanai has one gas station, no stop lights and two Four Seasons resorts with serious golf courses.  It is formerly the largest pineapple plantation in the world (88,000 acres) and home to 3,125 people.

The previous owner had proposed building a 45-acre field of wind turbines to generate electricity that could then be sold to Maui.  No word yet on whether Ellison plans to continue with the windmill plan.  As in other parts of the world, the population of the island is divided into two camps — those who detest windmills and those who crave electricity.

Actually the two groups overlap quite a bit and this is where things get confusing for me.  If you own 98% of the island, doesn’t that make you the feudal lord?  And can’t you do pretty much what you want with the land short of opening a hazmat dump? Also, what’s the difference between a user group meeting and just living on the island?  I’m not sure how this plays out so it will be interesting to watch.

There’s been no public announcement in the six weeks since Ellison bought the island so no one, even the islanders has an idea of what the future holds.  With two Four Seasons resorts there is some speculation that the island could become some kind of hub for sailing.  Perhaps a training center for America’s Cup competitors?  I am sure all the confusion will be cleared up at OpenWorld.


“Almost seven years of relentless engineering and innovation plus key strategic acquisitions. An investment of billions. We are now announcing the most comprehensive Cloud on the planet Earth,” said Oracle CEO, Larry Ellison. “Most cloud vendors only have niche assets. They don’t have platforms to extend. Oracle is the only vendor that offers a complete suite of modern, socially-enabled applications, all based on a standards-based platform.”                           Larry Ellison, CEO, Oracle

Mixing metaphors and technology yesterday Oracle chief, Larry Ellison further defined Oracle’s vision for cloud computing.  Years?  Billions?  Me thinks the man protests too much.

It’s a sure sign that a competitor is coming from behind when he tells you that everything the competition’s been working on and inventing for over a decade has now been eclipsed.  The billions and planets and years — not to mention the billions in acquisitions — might have been better spent in competition rather than mounting what amounts to, but no one said, a Manhattan Project to pull your bacon out of the fire because you left your business model to stagnate for too long.

I am a fan of some of the pieces of the Oracle cloud though I see yesterday’s announcement more as a set of checkboxes with “me too” written all over them than words like innovative, groundbreaking, out of the box and the like.  Let’s take things in order.

I am a big fan of any infrastructure that can raise everyone’s game from however many 9’s of reliability they have at present, to AT LEAST 7.  With seven 9’s you get something like a bit over 3 seconds of downtime per year and that, or better, is what it will take to get us all off the fairyland ideal of cloud to the more prosaic, pragmatic and utilitarian concept of utility computing.  The vision has always been computing delivered like telephone, electricity, natural gas or water and those utilities have much better than seven 9’s but seven is where it starts to get interesting.

So, Oracle’s use of all of its Exa-themed Sun devices for infrastructure makes a lot of sense.  There’s a good deal of reliability built into Exa but not necessarily enough to deliver the cloud vision unless you also talk about redundancy and failover.  They’re expensive too.

The alternative that even an Exa-box supported cloud will need to contend with is a well managed multiple site redundant hardware infrastructure with failover capabilities.  Other utility services have failover and IT should be no different.  So the hardware is nice but is it cost competitive with the alternatives?

The rest of Oracle’s announcements, which I thought were repeats of earlier announcements, spanned from database services to sites to various developer, analytics, social networking and document sharing services.  In short, all the stuff that Salesforce has been dripping into the market for many years.

But what’s missing is telling.  The Oracle announcement, while impressive, still lacks vision.  There’s no hint of a changing of the guard and no advice to customers that the world that will use these products is vastly different from the one where the previous generation of on-premise Oracle applications held sway for so many years.  Instead the message seems to be, here’s our erector set that you can use to approximate the Salesforce.com environment that your users are increasingly asking for.  This, plus a bolus of consulting dollars, will help you beat back the barbarians at the gate.

Again, there’s a lot of good stuff in Oracle’s announcement, Ellison’s hyperbole aside.  But there’s a widening gap in the market that has nothing to do with technology per se.  It’s between vendors that get it and those who are still just pushing product out the door in the hope that customers will figure it out.  Real cloud, social and mobile companies are not pushing product.


At his second and final keynote address to the 2011 Oracle OpenWorld user meeting, Larry Ellison finally gave the rabid software oriented audience something to savor.

Throughout the week the Oracle CEO and his minions had spent large amounts of time telling us about hardware or some other aspect of the business leaving me and my software analyst and blogger friends champing at the bit.  That changed in Ellison’s second keynote when he announced the Oracle Cloud, the Oracle Social Network for business and the arrival of Fusion applications.  There may have been other introductions but honestly I was scheduled to be on a panel at 5 PM and for all I know Larry is still talking.

Ellison’s keynote did not come without drama.  A long-running argument between Ellison and former Oracle vice president Marc Benioff, CEO of Salesforce.com, nearly blew a fuse when Oracle cancelled Benioff’s keynote forcing him to scramble to find other accommodations to address Oracle Nation.  It was great political theater when Salesforce hired the St. Regis hotel and set up campaign style picketers with signs and slogans — “The cloud must go on” — out on the street.

Much of the drama could have been avoided if only Oracle had introduced its software trove earlier in the week.  The idea of both Benioff and Ellison speaking about opposing views of cloud computing at the same conference and on the same day proved too much even for San Francisco.  Instead, earlier in the week, Ellison laboriously discussed his company’s line of high performance computer gear aimed at the high end of the market, which many of us in the analyst community greeted with a so-what attitude.

The question of why Oracle held its fire for so long is curious and will be the subject of many post mortems.  When I try to puzzle through this turn of events I have to conclude that if they had announced the cloud and social network earlier in the week, they would have been forced to answer questions and provide demonstrations.  As it is, we all go home armed with knowledge of these products only through a demo that Larry did on stage but none of the reassurance that they are real.  It would not be the first time that Oracle announced something early.

I am therefore forced to conclude that at least the cloud and social network that were announced are not really ready for prime time.  I am sure the products exist in some form but I am not sure what state they are in.  I will believe it all when I can play with it and report to you.

With the assumption that the software products are real we need to ask what impact they will have on the industry.  The short answer is that these products will be enough to freeze many decision processes until Oracle can get around to delivering a true 1.0 version for general availability.

In conception, the Oracle Cloud and Social Network sound good and they will appeal to a big audience of Oracle customers.  But they are not fundamentally different — and one needs to question if they are better — than what’s already on the market.

For example, nearly every vendor except Salesforce, offers customers the choice of where to operate its software — in the data center, in a third party hosting environment or in an Oracle sponsored facility.  Also, these customers have the choice of running in a single tenant or multi-tenant configuration.  So all the bases are in theory covered.

But this only adds fuel to an already smoldering argument of whether it is better to simply move applications from an old paradigm to a new hosting environment or if it might be necessary to take a fresh look at these applications in the context of mobile and social demands and changing business requirements.  Failing to do all that might result in well functioning applications that have diminishing relation to reality.

As Benioff has made clear for the last decade and did again at his press conference, most of those choices fit an old paradigm at a time when the paradigm is changing and the multi-tenant solution is the way of the future.  Interestingly, Ellison derided multi-tenancy as something that is 13 or so years old but ignored the idea that the conventional IT that his solutions provide for are much older still.  Moving your data center off site, which is a function of the Oracle Cloud, is not exactly state of the art.

Ellison was careful to point out the places where his cloud, for instance, was superior to Salesforce.  Oracle Cloud offers users the ability to use applications on premise or on-demand and to move applications from one to another without losses.  Oracle also works hard to assure the market that its solutions are standards based using standard middleware and programming languages.  In fact Ellison was happy to discuss the whole application stack in that context.

Big IT shops will be comforted by this knowledge but increasingly, they are seeking ways to streamline their operations and reduce the amount of labor they invest in their applications.  A discussion of how to avoid middleware all together might have been more welcome.

The new IT paradigm promoted by Salesforce and a growing army of followers is social, mobile, cloud and multi-tenant.  The new Oracle products embrace all of this but still leave it to the customer to determine when to adopt these ideas.  That is a good approach for a company like Oracle.  Ellison has a huge installed base of some 380,000 customers and they will not be converted in a short time.  So hybrids and halfway measures are the strategy and in this Oracle has played its hand well.  But it is not alone — Microsoft, SAP and many other software houses that were the leaders in the last decade have the same tricky path to traverse and the same basic approach.

What happens next will be interesting.  With these announcements Oracle has come close to parity with its competition but it is last in the race and its solutions mimic the competition without breaking much new ground, if any.  What the company does next will be vital.  Will it continue to follow the pack as a not to fast follower or will it innovate around all of the ideas bubbling up today including mobile, social and, of course, cloud?

There is enough in the announced products to enable customers to get going with cloud computing and in applying social concepts to business and there is plenty to support those who break out in a rash whenever they hear words like Salesforce.com, cloud or social.  That is right where Oracle needs to be at the moment assuming the products they announced, but curiously did not let us see or try out, really exist.

Benioff Speaks

Posted: October 5, 2011 in CRM
Tags: , , , ,

When his part was over Marc Benioff could look back on a keynote that was fresh and interesting for OpenWorld but without a great deal of the controversy that had been expected.  There are definite differences between Benioff and Larry Ellison and their respective companies. Benioff preaches openness, cloud, social, mobile and other modern technologies that will constitute the infrastructure of the future.  “We’re not here to sell another mainframe,” he said at his impromptu keynote.

Ellison on the other hand, has a huge legacy installed base to convert and his options may be more limited than Benioff. IT doesn’t help that Salesforce has been executing on its vision for several years while Oracle is in some ways just getting out of the starting gate.  Ellison will speak today at 2:45 PM PDT and will no doubt have some answers to Benioff’s speech.  Stay tuned.


WTF!  I’ve been writing, talking and meeting all day.  I thought I had the night off when this bombshell went off (it comes directly form Twitter):

“RT @Benioff: Larry just cancelled my keynote tomorrow! Sorry #oow11! Join me @ St. Regis AME Restaurant at 10:30AM! The show must go on! Sorry Larry!”

There are so many things to say on so many levels, this could take all night.

Of all the bush league things that could be done, this is a topper.  If you thought the days of animosity and dirty tricks was over in Silicon Valley because we had somehow grown up — or at least aged out of it — tonight is a sobering reminder that they play by bare knuckles rules out here.  Let’s try to pull this apart and analyze some of the levels of meaning.  ALL OF WHAT FOLLOWS IS AT BEST A HYPOTHESIS, MY HYPOTHESIS.

First off, you don’t cancel a keynote on the speaker less than 24 hours in advance regardless of the reasons short of moral turpitude or an ax murder.  We don’t have motives as I write this so it is my assumption that the Benioff keynote scheduled for tomorrow morning had no justifiable reason for termination.

Even if you are Larry and it’s your show, if you made the agreement, most likely a year ago, you keep your word.  If you don’t like the idea, you cancel next year’s keynote a year in advance, not the night before.  One immediately has to wonder why this ever got started in the first place.

So, what’s going on here?

Marc Benioff knows how to get under your skin if he wants to and that should be no surprise to anyone.  For all we know, Cole Porter was imagining Benioff when he wrote the lyrics to “I’ve got you under my skin”.  Tom Siebel got a big dose of Benioff when they were competing.  I remember one of Benioff’s first attacks on Siebel featured a third grade kid named Dave who had to write one hundred times on the blackboard, “I will not let Siebel take my lunch money.”  Ouch!  That was effective.

People loved the Dr. Dave campaign in part because it pitted a real David against a goliath and it worked brilliantly.  Benioff hounded Siebel relentlessly until time and circumstance made Siebel decide to throw in the towel and allow itself to be bought by Oracle where it remains today.

Today’s dust up can be seen as a reaction by Oracle to several years of Benioff sniping about cloud computing and Oracle’s lack thereof.  Let’s review.  Benioff started giving a keynote during OpenWorld a few years ago.  As one of Oracle’s biggest customers it was a privilege but also something that the vendor — Oracle — could not easily refuse given the circumstances.  At that point, Oracle had CRM OnDemand but Benioff had the momentum in cloud computing, CRM and social media.

Things only got better or worse depending on which horse you rode.  Salesforce continued to grow and gain market share by offering more products like Chatter and socialized CRM.  Oracle made incremental improvements to its core systems and continued to offer several flavors of CRM including CRM On-Demand and Siebel.  Oracle is a tough competitor in CRM, not doubt about it.

When Oracle bought Sun and began bringing to market its Exa- series of hardware including storage (Exadata) and compute servers (Exalogic), Marc ridiculed them as cloud in a box and not real cloud computing.  This year in the wake of a very successful Dreamforce, Benioff was ready to come out talking about collaboration, the social enterprise and the social customer.  I think the dominant concern might have been letting this cannon loose in the OOW chicken coop.

Perhaps Oracle had justifiable concerns.  If you went through the OpenWorld show floor today and visited the Salesforce booth (Yes, they have a booth!) you would have seen something very strange for a trade show.  People from the Salesforce Foundation staffed the Salesforce booth and they were in the middle of preparing aid packages for charity work.  There was nothing in the booth relevant to selling Salesforce’s SaaS service.

The foundation was simply recruiting people from the show to do the packing labor as they walked by.  It was as if Benioff was saying to Ellison, “See, we don’t need your X-boxes you can do all this to make money and we have a higher calling.

Maybe that was the last straw, I don’t know.  Earlier in the day, I had heard that there was a chance the keynote would be moved to the following day but not much later it all came to an abrupt end.  Benioff has found alternate space for the speech and it will be held as planned.  But meanwhile, Ellison and company look either like a bunch of fools who got played or the school yard bullies.  Either way they’ve been pushed into an action they will regret.  If this was football, I’d have to say that Salesforce caused its opponents to fumble or to throw an interception.

What precipitated the action is unclear and likely to remain a personal issue between two people who were once mentor and protégée.  Why it happened says much about Oracle.  They should have been able to behave better or at least in a more mature way but I guess that isn’t the way things always work out here.

 


Musings on Oracle OpenWorld October 2 to 6

Oracle OpenWorld won’t start until a reception on Sunday night but that won’t stop many of us from writing something about Oracle or the event before a word is spoken.  And there are so many things to say.

There will be the usual product centric talks and breakouts plus a lot of education, but that’s to be expected.  There will also be the usual distractions such as Marc Benioff’s now annual address (which I find illuminating) on the, what? , state of the cloud? That’s Wednesday.

Speaking of Marc, it’s inevitable that there will be the now usual comparisons between the protégé and the master; of how one invented the database industry and the other invented cloud computing.  But where Marc shows ambitions to change the world through philanthropy, Larry likes to win.  So look for more America’s Cup coverage.

Larry and winning go together and that forms the basis of this short piece of analysis.  Ellison made Oracle the winner in a very crowded field during the database wars and today Oracle is one of the biggest technology companies because of his leadership.

How important is that leadership to Oracle’s success?  Well, at this level you don’t get to perform a double blind longitudinal study of the market.  This isn’t fantasy business so you can only ask what the result might have been if Ellison, say, ran Microsoft.  Nonetheless, asking is fun so let’s.

Figure 1 is a stock chart of the last five years (it didn’t all come out but there’s five years of data behind my hypothesis) showing the progress (or lack thereof) of some major indices and some large technology companies including Oracle, SAP and Microsoft.  Now, it’s tempting to look at the pretty colors and conclude that Oracle wipes the floor with the other guys but you need to refine your analysis some.

Oracle: rewarded for prudent risk taking?

For example Oracle’s relative size as measured by market capitalization (market cap) is between SAP and Microsoft.  Roughly that means number of shares outstanding times the price per share, which gives you an idea of the value the marketplace, puts on each company.

It’s probably good here to duck into the SAFE HARBOR for a moment.  That is to say that I am not giving financial advice or in anyway behaving like someone who works on Wall Street.  No, sir, I have ethics.  Let us be clear, I am simply explaining a hypothesis.

Ok.  Here are the market caps (in billions of dollars): SAP $62.72, Oracle $152.72, Microsoft $213.90.  So, Larry has not built the biggest software company in captivity; by virtue of the fact that Microsoft has software running on just about every computing device on the planet, they take that honor.

Nevertheless when you look at the stock charts you see a very interesting story.  Both SAP, which is smaller than Oracle, and Microsoft which is significantly larger, are treated by the market as companies that are part of the broad middle of a bell curve.  I say this because their performances are nothing special over the time frame, they mirror the averages to a great extent.

Now a lot of a stock’s price movement has to do with the market and not individual performance.  As you can see if you look at the chart, every stock and index listed suffered from the market implosion of the late summer this year.  Notwithstanding all that, Oracle is doing quite well over the five years covered here.  After more than three decades Oracle still behaves like a growth company and the other guys?  Not so much.

What drives this?

To a great extent I suggest it is Larry Ellison.  He hasn’t always been right but he’s also never been afraid to take a chance on an idea and often that has meant buying other companies.  We can’t list them all but even just the more recent acquisitions and inventions are interesting.  He bought Sun Microsystems in a move some questioned but he apparently believes that cloud computing eventually comes down to a processor somewhere going something that gets reflected back into space, or at least the cloud.  Hence the importance of good, fast, cheap processing and the stack that goes with it.

Then there’s the database machine that Oracle more or less invented first with HP and then redeveloped with Sun.  It’s called Exadata and it consists of many disks and a great deal of memory to reduce latency in very huge databases.  Again this looks to be rather important as we move all computing to the cloud and utility computing providers become the new IT.

We can go on to consider the acquisitions of many of the front office software companies in the middle of the last decade.  Many of us, myself included, said that would be the end of something (I forget if it was the world or just civilization) but that hasn’t happened.  Oracle is a bit tardy with Fusion, the technology that was promised to glue it all together but I expect we’ll hear a lot about it next week.

So what to expect next week.  Here are a couple ideas.

Oracle platform in the cloud?

All the pieces are apparently available including, most formidably, the hardware in Exadata and Exalogic.  With the gear and Fusion in place there is a reasonable expectation that Oracle could announce it will annex the Internet (remember Larry likes to win and there’s no reason to buy something you can just take).

Two years ago Ellison was the guy to made fun of clouds and cloud computing but he’s one of the better strategists in Silicon Valley so watch this space.  Oracle is in competition with many different companies but the tools and database spaces are some of the biggest ones around.  It might be interesting to spar with Salesforce over CRM but an Oracle platform could really take it to Microsoft, a company with a lot more marketshare.

A social announcement?

I have no idea what might be announced by Oracle on the social side but it won’t be ignored — it’s too big and too ripe with potential.  Oracle is not a leader in social by most measures — they aren’t Facebook or Twitter or Salesforce (Chatter) or Yammer or anyone else.  Nonetheless, the company has been making excellent progress off the radar in business social solutions.  There is a raft of social and analytics focused on the front end of the B2B funnel and some cool things aimed at social, mobile and retail.  Oracle will have something to say.

Mobile

On the Mobile CRM side of the equation look for announcements supporting more platforms.  And while we’re at it to maintain a lead in B2B enterprise selling they need to ensure their customers have great analytics support on the mobile platform so there’s that too.  Finally, the power of mobile is about how many applications and processes you can mash up on the hand-held device and I think video is the most important so I would look for something with video in it.

That’s it.  I don’t know exactly what Oracle is going to do, I haven’t been briefed as I write this.  But it’s my job to speculate and I love my job.  The company has a history of coming up big when it needs to and today is no exception.  That’s what makes Oracle a growth company still after all this time.