Last week’s Oracle OpenWorld show was quite an event with many different story lines including the tie-in to the Iron Man 2 movie. In fact, in the main area outside the keynote hall there were three Iron Man suites along side their Exadata and Exalogic cousins. So here is what we learned:
Cloud in a Box according to Marc Benioff and Larry Ellison. There was quite a number of heated, yet humorous references to Marc Benioff’s (CEO at Salesforce) comments related to Oracle’s view of Cloud Computing that it has to reside in an Exadata box. In fact in one session I attended, he even said that the Internet was not made of Cloud boxes that were even taller than Marc, and he is tall. In the Sunday afternoon session, Larry was very dismissive of both Marc’s vision of the Internet and his book Behind the Cloud. If you have some time check out Marc Benioff’s OpenWorld keynote, very funny.
| Different Viewpoints about Cloud Computing | |||
| Larry Ellison – Oracle | Marc Benioff – Salesforce.com | ||
| Big Picture View | Cloud in a Box | Cloud on a Box | |
| Centralization | Centralized Computing | De-Centralized Computing | |
| Scaleability | Scale up | Scale out | |
| Target Buyer | CIO | Business executive | |
| Pricing | Mostly license | Subscription | |
| Control | Compliance | Experimentation | |
| Cost | $$$ | $ | |
| Big Trend | Vertical Integration | Consumerization of Software | |
What is really interesting is that in many ways they are both right. Larry is very famous about a his rant on Cloud Computing and that it is nothing more than a network, servers and software. This is true, even the most Cloudy providers in the market like Amazon and Salesforce.com are dependent on a real infrastructure that can scale and is reliable and many of these firms are Oracle customers.
On the other hand, Marc is right that the Cloud is less about buying, building and maintaining this scalable architecture and more about leveraging a firm that provides their Infrastructure-as-a-Service. This has been one of the main catalysts for the software industry’s move to a subscription business model or SaaS, just like Salesforce.com.
In some ways both companies are right, it just depends on your viewpoint. I think that Oracle is thinking more like IBM and HP and Salesforce is more aligned to Facebook and Zynga. Even though Larry and Marc were both exchanging jabs last week, they are both customers of each other, and in the end that is good for all of their customers.
Mark Hurd looks like he fits in well with Oracle. The keynote sessions where Mark presented, he was relaxed and really knew the material. Given Oracle’s absorption of Sun, it is really helpful to have someone with Mark Hurd’s background helping Larry run the company. The hardware business is quite different than running a software firm and Oracle was able to secure one of the best hardware executives in the industry from HP.
Oracle is really embracing the hardware world. It was interesting to see the focus on the new Exadata and Exalogic products. The company’s messaging revolved around performance, availability, security and management and not very much around applications or Cloud Computing. A lot of discussion around hardware and software being engineered together to create these incredibly powerful database and middleware server platforms. But does this approach raise concerns around ‘vendor lock-in‘? This hardware-centric strategy makes sense because Oracle really views IBM as their biggest competitor and they need to monetize the Sun acquisition as well.
Fusion applications are coming at the end of the year, but not sure if anyone at Oracle cares. Larry told the crowd that the writing of the new Oracle Fusion applications for Financial Management, Procurement and Sourcing, Project and Portfolio Management, Human Capital Management, Customer Relationship Management, Supply Chain Management, and Governance Risk and Compliance. These are the products that were promised last year at OpenWorld but they appear to be real at this point. Although I didn’t attend the deep dive sessions for Fusion, others who did told me that they have done a good job. At the Wednesday afternoon keynote, the demos of the products looked good and the user interface looks quite modern.
According to Larry the writing of the new Fusion applications was the biggest development project in Oracle’s history, it was interesting to see that there was little for no fanfare surrounding this major milestone. As long as the Fusion applications sell more database and infrastructure software and more Exadata servers, I guess that’s what is important. The successful roll out of the Fusion applications later in the year is going to be important for the overall software market but I doubt it will really impact the leading SaaS providers like Salesforce.com, Taleo, SuccessFactors or Workday. It will be interesting to see how Oracle evolves its thinking about the applications market and it’s approach to the Cloud, because that is where all the growth will come over the next 5 years.
