Where technology value lies for those who sometimes can't see the wood for the trees

Some people don't understand that the promise of technology is about helping organizations innovate. That's a sad fact.

larry ellison
Doris Benavides

At a recent industry show, I passed comment about the fact that a good half of the first keynote was taken up by a manufacturer of silicon chips going into extensive detail about what their chips can do. To clarify, the show was Oracle's OpenWorld extravaganza, and the company in question was Intel, whose CEO spent the better part of an hour talking about just how much technology Intel can cram onto its silicon. Oracle is a company offering IT value to the biggest organizations in the world, while Intel makes a good proportion of the silicon on which IT runs. Despite the common factors, there is a disconnect there. (Disclosure: Oracle covered my travel and expenses to attend the event.)

After half an hour or so, I wrote a Twitter missive questioning the value of the talk and positing that companies should be worrying about the high-level value that IT can deliver, rather than spending time thinking about the IT upon which their infrastructure runs. Another commentator, perhaps bored himself or simply wishing to gain some page views, decided to take me to task, calling me a muppet and an idiot for suggesting that. Without wanting to engage with someone who clearly has an issue in terms of how they themselves engage with others, the person took the perspective that:

"When you triangulate what Intel is saying about performance improvements coming out of joint engineering against the large enterprise need to both process and compute vast amounts of data, it is hard to think of a better combination than Oracle and Intel for bringing that to market."

Let's dive into Oracle's position for a minute, and look at some of the bigger macro trends going on. Increasingly, organizations are being told that they have to innovate at an increasing rate and that technology, generally, and software in particular, is a primary source of that innovation. I often go into organizations and hear them talk about "their industry's own version of Uber," a reference to a potentially disruptive player coming into their space. In this increasingly dynamic environment, organizations want to disrupt, before someone else disrupts them.

If you take this fact as being prevalent across industries, then it raises some issues. Increasingly, IT needs to move on from being the "keep the lights running" cost-center that it is, and become a truly valuable partner for the business, enabling individual business units to innovate quickly and easily. It is from this trend towards distributed and democratized innovation that comes the suggestion that "developers are the new king makers," as respected analyst firm RedMonk often says. What they mean by this statement is that increasingly developers are the ones creating the opportunities and solutions that help the broader organization remain competitive.

Indeed, in discussions with Oracle executives at OpenWorld, there was much discussion about how the various Oracle solutions enable developer productivity. In a one on one discussion with Tim Ebbeck, the managing director of Oracle's Australian and New Zealand operations, I heard about Oracle's various Platform-as-a-Service (PaaS) offerings that are seeing great traction within large organizations. The very notion of PaaS is all about giving developers the ability to create prototype (and for that matter production) software without having to worry about setting up servers and other infrastructure.

The very rise of Amazon Web Services (AWS) has, at least in part, been fueled by the desire to obtain core infrastructure -- servers, storage, and networking -- quickly and easily and without heavy involvement from IT. Ebbeck told me about one large Australian public sector customer that has just signed a huge contract with Oracle for PaaS services. The agency had some new government regulations come down the line to it and, as a direct result, had a huge number of individual applications to create. Building those applications within the context of having to stand up individual servers was simply untenable and would have ground progress to a halt -- PaaS allows them to innovate faster than ever before.

It is for these reasons that an extended discussion about the beauty of silicon chips is an inappropriate message for an OpenWorld keynote. Oracle is clearly facing some threats to its incumbent revenue stream as large IT purchasing contracts are increasingly being replaced by "as you go" approaches and utility consumption. In the face of that, Oracle needs to show how it can add increasing value to its customer base to replace any revenue lost. While eking out greater performance, and reducing the IT cost to operate is certainly valuable, it is far less valuable than adding speed to an organization's innovation projects.

Clearly the keynote was simply the first of many talks at OpenWorld, and Oracle dived into its higher level, and higher value, products and services later on in the show. But to dedicate half of what should be the scene-setting presentation of the event to a down-in-the-weeds discussion about silicon was a missed opportunity. It strikes me that, given the meteoric revenue growth we see from AWS and the gigantic opportunity that exists in equipping developers with the tools to add value to their companies, Oracle missed a chance to attain a far bigger prize.

Copyright © 2015 IDG Communications, Inc.

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