I have a frustrating history with Oracle. I've been trying for many years to engage with the company, after all it has been, for decades, one of the most important technology vendors on the planet. Any industry commentator worth his salt needs to be over what they're doing. But my attempts to engage have always been stymied. Partly that's because I don't fall into the traditional buckets of analyst relations or press relations. I fall somewhere in-between the two and for a rigid organization like Oracle, that makes things complex.
The other complicating factor is that, despite my focus and coverage being global with a U.S. bias, I love in the Asia Pacific region. Oracle, like other traditional legacy companies, has a regionalized approach to how it deals with press and analysts and that doesn't really work for someone with a focus outside of their home region.
Given this history, I was surprised and pleased when, out of the blue, I was invited to attend Oracle's annual shindig, OpenWorld. (Disclosure: Oracle covered my travel and expenses to attend the event.) I've long been interested in seeing OpenWorld first hand. I've attended Salesforce's DreamForce event for the past eight years or so and seen it grow from a "modest" event of some 20,000 or so people up to the extravaganza this year which saw well over 150,000 attendees and a cruise liner pressed into service to fill the void of available hotel rooms in the city. DreamForce has always been compared to OpenWorld, so I was interested to experience what life was like in the other camp.
Oracle has an interesting history when it comes to the cloud. Many will remember Oracle's founder, and then-CEO, Larry Ellison in an interview from a few years ago when he poured cold water on the very notion of the cloud. Oracle has been slow to really be competitive in the cloud. In this regard, I liken them to other traditional vendors such as SAP, Microsoft, HP and IBM.
Looking at these other vendors' reactions to the cloud is telling -- Microsoft is the standout performer, its new CEO, Satya Nadella has continued an amazing run of innovation that sees the company become a powerhouse both in cloud infrastructure, as well as cloud applications. IBM has shown promise; its SoftLayer acquisition, along with the Watson analytics products are all moving in the right direction.
HP and SAP, however, have been less successful. HP's on-again, off-again public cloud initiatives are a good example of just how confused this company is about the cloud. And as for SAP, it wants to be a cloud vendor -- the fact that it acquired SuccessFactors and installed the CEO, Lars Dalgaard, as head of all things cloud, shows that. But alas Dalgaard only lasted a few months before realizing that the chance of really pushing the needle within SAP was remote and all the promise he brought was lost upon his departure.
For its part, Oracle has arguably reacted even more poorly to the cloud. While Ellison has moved on from his rebuttal of the cloud from a few years ago, seeing him announce, on multiple occasions, Oracle's "cloud in a box" was jarring. Essentially Ellison took a big, powerful piece of hardware, and slapped a cloud sticker on it.
While no one can deny that Oracle solutions are powerful and performant, that misses the point about the cloud: The cloud is all about being agile and enabling innovation. Amazon Web Services (AWS) success was formed not because it offered the most powerful computing platform, but because it offered organizations immense flexibility, and the ability to experiment cheaply and easily -- that's where innovation comes from.
One theme that Ellison keeps coming back to is that of being the enabler of the cloud. Ellison rightly points out that a huge number of large SaaS vendors run their applications on Oracle technology. In this, Ellison is right -- companies like SalesForce and NetSuite are indeed built upon the Oracle database. But there are two issues with following this line: Firstly, core technology is becoming commoditized. The rise of open source solutions, and, in particular, open source databases, has meant that vendors have much more choice in what they use. Indeed Workday, one of the darlings of the enterprise SaaS space, is decidedly NOT built on the Oracle database.
The second issue is that while Oracle does indeed fuel the majority of first generation cloud vendors, it has very little exposure to more recent players. Take a look at the plethora of SaaS applications built in the past five years or so and very few of them have anything to do with oracle technologies.
And therein lies the problem for Oracle. They are unquestionably a massively important vendor that has huge footprint within organizations. But increasingly the technology that customers rely upon Oracle for, ERP systems, engineered hardware and databases, are simply an annoying fixed cost. The real value for an organization, when it comes to IT, are those solutions that allow them to react to market forces, to experiment with new solutions and to innovate business models and products. And Oracle is yet to show its hand in that space.
There is no doubt that Oracle has the technical ability to deliver what the changing world demands it to, as well-respected industry analyst, and noted moderate Vinnie Marchindani suggested in the run-up to OpenWorld:
Oracle, to me, is a very talented football team which just cannot seem to avoid stupid penalties and turnovers
So for all of these varied reasons, the next few days of OpenWorld are going to be fascinating. Recent rumors that Oracle is building a public cloud to compete with AWS, increasing innovation from some of the more traditional vendor competitors and, most importantly, massive pressure from its customer base for it to truly become an enabler of innovation rather than simply a cost center mean that Oracle has no choice but to move the needle. I'll wait with baited breath -- OpenWorld will be nothing if not fascinating.
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