Posts Tagged ‘Oracle openworld’


I’ve been at OpenWorld for two days as I file this but so far, I have little CRM oriented material.  CRM really kicks in on Wednesday when the company focuses on CX or customer experience the moniker that Oracle has given to much of its CRM focus.

CX is good for what Oracle is about and some of the announcements about private cloud and high capacity storage fit well with the message.  For the record, CX was a RightNow term that Oracle adopted when it bought the company last year for a cool 1.5 giga-bucks.  Add to this about five other acquisitions including ATG, the ecommerce company, and some web analytics and all of a sudden Oracle became a potential Cloud and social powerhouse.

I say potential because it all needs to be hooked up into a coherent and consistent whole.  That will happen, but it is a rather large undertaking.  At any rate, Wednesday – the day you will read this – is when all will be revealed and I am very interested.

That’s not to say that there isn’t any news to discuss that’s relevant to our corner of the world.  Front office has been in upheaval lately with the social and mobile revolution and it’s all driven by the cloud and here Oracle has stepped up smartly.

In the Sunday keynote, CEO Larry Ellison introduced the Oracle Private Cloud and some very interesting hardware to run it.  I had previously said that I expected the company to turn its technology bonanza to the cloud and much of what I expected did happen though in ways that were slightly different from my original take.  Nonetheless, the announced private cloud is a good idea and will sell well, I think.

Private cloud (PC) is built on Exadata X3 a new storage machine from Sun that sports 26 TB, yup, that’s terabytes, and it’s all silicon memory and very fast.  There are spindles in the box but we aren’t counting them.  That’s 26 TB of amazingly fast data, which is also compressed so the 26 TB is more like 100 TB.  It definitely tips the huge-o-meter and the fast-o-meter into the red zone.

PC is also based on Oracle 12c a new version of the Oracle database built expressly for the cloud (that’s the c).  The new DB has some nifty capabilities which enable it to nest databases within databases – can’t find my notes but it has a name.  This nesting looks suspiciously like multitenancy to me but one big difference is that if you run only your own data in it, your data is not co-mingling with anyone else’s data.  That will appeal to certain industries that are prohibited from co-mingling data – like banks – by regulators.  I’ve never figured out why banks can co-mingle money but not data.  Both are overlaid with a layer of metadata to keep them separate, but I digress.

So, it seems like Oracle wants to be in the infrastructure business providing computing power for a price.  The company offers traditional on-premise, cloud and hybrid (the rose wine of computing?).

In truth, there will be a great deal of hybridizing over the next few years as some enterprises finally take their first tentative steps to the heavens (I mean cloud) and I think this is very good.

The Oracle private cloud and 12c finally provide a solution to the problems that have bedeviled some IT executives.  They offer an elegant solution for moving to the cloud even if they are in some ways compromises.  More importantly there is no going back to the data center once you are in the cloud and over time enterprises will be able to take greater advantage of what the cloud offers.

Most significant to me is the sustainability angle that all this provides and which everyone is avoiding discussing.  It’s like everyone is whistling past the energy graveyard.  Truth be told, data centers in the sky suck up giga-watts for running things and cooling them. 

They cause big pollution as I referenced in a previous post.  Much of the problem comes from under utilizing gear that has to run to keep the peas from touching the mashers on the plate – keep everyone’s data from mingling.  Translation, there are many separate databases on separate and under utilized blades and spindles.  Oracle PC and 12c start to eliminate the problem by providing ways to increase utilization, reduce the number of devices running and thus cut the energy bill.  Not bad.

We’ve reached a tipping point where IT services are becoming more important to our lives for social and mobile computing needs but we’re also approaching limits imposed by power consumption and pollution and that’s where the private cloud can begin showing savings.

All this technology will, I think, help us raise our sights from 3 or 4 9’s of availability to something more like the 7 to 9 9’s we need for IT services to become a true utility.  I’ll have more to post about when I get more information from the CX Summit.  For now, it seems to me that after a slow start in cloud computing Oracle is trying to gain prominence and some of the company’s ideas will help get it there. 

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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.


All right!  Recess is over!  If you went to Dreamforce last week you can be forgiven for taking a kind of victory lap in your head today because it was a truly great experience, besides if you are like me you are still tired.  One reason I think so many people like Dreamforce is its relentless focus on the future and on what will likely become standard practice in the not too distant future.  But also, if you went to the keynotes from M.C. Hammer to Colin Powel to Richard Branson to Tony Robbins, you left San Francisco with a certain “lightness of being.”

However, if you are an analyst you need to put all of that behind you and get ready for Oracle OpenWorld (OOW), which promises to be a barn burner for its own reasons.  Same city, same Moscone Center, same closed Howard Street, similar large crowd — where Dreamforce was all about the social enterprise, OpenWorld is about a lot that might not be so clearly connected.  There’s hardware and operating systems and then software for the back office, front office, databases, middleware, and development tools.  There are things I’m leaving out too like the America’s Cup.  At OOW Oracle will provide a glimpse of its own into what the future looks like for the enterprise and in some ways it’s very different from what Salesforce is talking about and in some ways they are similar.

This is not to say that one vision is less good than the other, far from it.  The competing visions reflect different world views and different realities.  For instance, while Salesforce approaches things from a clean slate perspective, Oracle takes the view that what it introduces has to work with what delivered before.  You can see this in its disciplined approach to supporting customers of the companies it bought way back in 2005.

Companies like Siebel and PeopleSoft whose products are getting long in the tooth and are prime targets for Oracle’s new offerings that are based on its platform called Fusion.  You may recall that Fusion went GA (that’s general availability, not the mid-night train), more or less, at last year’s OpenWorld but it hasn’t exactly set the world on fire and there are persistent rumors that the stuff doesn’t work very well or that it requires a phalanx of consultants to make it do its tricks.

The big hurdle for Oracle therefore will be to convince the assembled multitude that Fusion is real and that the path to the future goes through the intersection of Fusion and Big Iron.

Speaking of big iron, last year the company rolled out some additional gear to complement its Exalogic computing devices.  It seems this family of hardware is built and optimized for very big jobs involving terabytes of data 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.

There has been an interesting series of articles by James Glanz here and here in the New York Times over the last few days focusing on the power consumption and pollution caused by data centers.  The pollution comes from diesel generators periodically fired up to test the centers’ ability to withstand a power interruption.  The consumption is gargantuan.

But a bigger question, for which there are ready answers, asks why so much power demand?  Part of the answer lies in how many companies are avoiding the necessary virtualization that will make the cloud much more efficient and sustainable.  According to the Times and backed up by McKinsey & Company, which did the analysis, conventional data centers run many CPUs and disks at much less than capacity in part to cater to the urban myth of the need to keep one company’s data separate from another’s.

You’ve heard me on this before using the metaphor that we comingle our funds in banks and overlay the pool of deposits with metadata like account numbers and statements.  Why are we resisting do this with data?  Companies like Salesforce are already doing the same virtualization in the cloud and Oracle has an opportunity to strongly support virtualization and point to a more sustainable future.

Will it?

I’m going out on a limb to say yes.  Maybe it won’t happen right away but keep in mind that two or three years ago Larry Ellison ridiculed the cloud and now that he has modern hardware and software he’s a big proponent.  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.

This is not a digression.  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.  The next decade in IT won’t be like the one that preceded it and if Oracle simply comes out with a grocery list for replacing old hardware and applications with more modern stuff it will be missing a great opportunity.  At the end of the day people go to these conferences looking for new ideas and things they haven’t seen before.  That’s what I’ll be watching for.


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.


Ahh, what a difference a good night’s sleep makes.  The Greeks are still threatening default on their bonds, the economy is still in the loo, the major stock indices are teetering on a bear market precipice and Marc Benioff is still going to speak at Oracle OpenWorld or at least next door.  But there is some clarifying news.

First, the guys at Oracle can claim that they didn’t cancel Marc, they simply moved his talk to Thursday.  Unfortunately, Marc is getting on a plane this afternoon to go on sales calls back east (The man still visits customers and asks for the order.  Not making any comparisons, just sayn).

The trip was planned for weeks according to my sources at Salesforce so there was no way to reschedule.  I am sure that was communicated when Oracle offered the choice 8 am slot on Thursday morning instead.  It’s sort of like saying, no, your vacation was not really cancelled, it’s just been rerouted to Siberia.

There’s been some good analysis by Larry Dignon suggesting that the audience is being played and I think there might be some truth in it.

Last year, if you recall, there was a minor contretemps in the press between Ellison and Benioff over cloud computing.  Larry had introduced his compute server, Exalogic, and Marc was deriding it as a cloud in a box.  “Beware of the false cloud,” he said.  We all laughed and reported all of it.  Larry got coverage, Marc got coverage and it was all good for business.

I am sure this was not collusion, just two guys who know each other’s moves and how to play a certain game.  This resembles improvisational comedy quite a bit or maybe it is real life imitating improv.  Here’s how it works — two funny people can riff on an idea for a long time without ever having a script by knowing a simple rule or two.

The first is be funny and the second is always say yes.  In other words, regardless of what the other comedian says, accept it as valid and build on it, just never say no, I don’t think so, and the sketch can go on for a long time.

“Cloud!”

“False cloud!”

Resembles

“Tastes great!”

“Less filling!”

Don’t you think?

Like many human activities improv resembles an arms race with each iteration ratcheting up the stakes.  Start with an insult, end with a war.  Perhaps.  There are some grains of truth in all this but as with improv, it is hard to determine how much.

For certain, Larry’s talk on Sunday was a train wreck panned by even the mainstream press.  Was there concern that Marc would upstage Larry in his own venue?  I believe Larry speaks this morning also.  Marc will certainly talk about cloud computing and software and deride Oracle’s hardware despite the obvious fact that at the end of every cloud rainbow there is not a pot of gold but a server farm.

On the other hand, Oracle is late to the game with its Fusion products that would give them a whole cloud story.  I sat in a briefing yesterday with nine IT executives and CTOs of companies that were in the Fusion beta program.  We couldn’t report names of companies, but they exist and appear to be happy.  That’s the state of Oracle’s newest cloud software though certainly products like CRM On-Demand have been around almost as long as Salesforce.  Not to worry though, I think Oracle has made excellent progress, as I relate here, in the two years since Larry first derided cloud computing at the Churchill Club.

At any rate, the Larry and Marc show will go on today.  It will be great theater and, like great improv, there will be a grain of truth in everything said by the participants.


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.