Oracle Buries the Lead
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.
Larry and Marc Round 2 or Is It Round 3? #OOW11
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.
Dreamforce as a Developers’ Paradise
Ok, so maybe it wasn’t paradise but then again with all the new tools Salesforce is rolling out for multiple kinds of computing whose primary overlap is the significance of the Internet is their use, this was kind of a Bonanza — Little Joe! Get my compiler! (Sometimes I crack myself up.) At any rate, my thoughts on what Dreamforce meant to developers in the form of a post can be found at SearchCRM here.
Carbon Survey Calls Salesforce Leader in Carbon Abatement
Marc Benioff’s Facebook page says that Salesforce.com is a rising leader in the effort to get carbon out of business. I didn’t know there was such a survey or report but I am glad there is.
Getting carbon out of your business processes is hugely important. While most people will view this as an anti-pollution idea and good corporate citizenship — and it is — it has an even more serious driver and consequence. As important as carbon abatement and climate change limitation is, it is secondary to the idea that the planet is running out of fossil fuels like petroleum and coal. Why secondary? Because without the affordable fuel to grow food and bring it to market (just to name one idea) you’ll die in a food riot long before the planet heats up enough to threaten your grandkids existence.
You might like to think that the earth has a limitless supply of fossil fuels but for that to be true the earth itself would need to be limitless. Of course nothing is limitless though some things are so big that they appear to be. In fact, the earth was endowed by about 2.5 trillion barrels of crude oil which we began tapping in earnest in the 1850’s at Titusvill, PA to be precise. Since then we’ve discovered all kinds of uses for petroleum as fuel and as raw material for numerous materials from rubber and plastic to paint and pharmaceuticals.
But we’re running out of the stuff. Estimates from petroleum geologists and others in the industry are that the planet now contains about 910 billion barrels of crude and it’s in harder to reach places of extreme weather or ocean depths. Oil and therefor transportation will never be as cheap again as they are today. Check that, transportation that is not tied to fossil fuel has a chance of being this cheap again but that will require a massive investment in infrastructure and I doubt anyone has the stomach for that — yet.
So that leaves it to the business community to fend for itself. Taking carbon out of your business processes is not simply good environmentalism but smart business. If you can find ways to visit customers over an IP connection or replace the visit with a video you are taking carbon out of that process. That’s where this report fits in and why it’s so important. The tech sector is about to be called on to pull our collective chestnuts out of a big fire and those who lead this process stand to make a lot of money. Google, Cisco and Salesforce are all at the top of this stack and your company ought to be trying too.
Is Collaboration Worth It? Yup!
Someone recently asked me why collaboration is important in the enterprise. To be specific, they were asking about the kind of collaboration that products like Yammer and Chatter enable. This collaboration consists of enabling people to share thoughts, ideas and micro news bits in a social context without the usual institutional overhead of email or a meeting. Collaboration more resembles Twitter than email and I suspect, but have not collected the data to prove it, that a typical collaboration emission is shorter than a tweet.
But the question got me thinking about other times and situations when the same kinds of questions were asked about the latest technology. No matter how the question is posed, the heart of it is frequently something like this: Are we wasting time and money doing this or is it the real deal?
It’s a fair question. We all live with limitations — so much time in a day, so much money in the budget and so many more demands on both that we can fulfill so what does a sane person do? Well, history might be a guide though it is not infallible.
Throughout my career the big theme has been converting the economy from one that manages and produces things to one that manages and produces ideas and information. We all know this and if we take a moment to consider it, this means our recent history is also about finding better, faster and less costly ways to share information.
I compiled the attached table from data served up by the World Bank.
| Year | US GDP (Trillions) |
| 1975 | $1.623 |
| 1985 | $4.185 |
| 1995 | $7.359 |
| 2005 | $12.58 |
| 2009 | $14.119 |
It shows the U.S. Gross Domestic Product by selected years, which I picked for specific reasons. In 1975, we were in the early days of the mini-computer revolution and GDP was a healthy $1.623 trillion, a lot of money to be sure but puny in comparison to things to come. Ten years later GDP had jumped about two and a half times to $4.185.
That’s because by 1985 we were enjoying the benefits of not only minis but desktops. During those days I can distinctly recall people asking if it was really necessary to have a computer or terminal on every desk top. That was about the era when company phone systems became popular and just about every company had bought a fax machine. The phone system replaced those awful black receivers with multiple lines and made it possible to forward calls, have three way calling and whoa! voice mail. No more coming back from lunch to pick up those cute little pink messages. Phone, fax and computer formed a powerful trio for information sharing.
By 1995 GDP had grown again nearly doubling to $7.359 trillion. I remember economists like Alan Greenspan trying to explain what was going on in the economy. Testifying before congress they looked like C students who were trying to explain why they were suddenly getting A’s in Physics. That’s because by 1995 the economy was growing like a proverbial weed but in a different way than anyone had witnessed before. The economy was growing with little inflation, the amount of work produced by the average worker was climbing without any noticeable additional input of capital. That’s called productivity and we were better at it than anyone else who had ever lived on the planet. The productivity was driven by our new technologies.
The bigger the economic number the harder it is to double but by 2005 with the evolution of the Internet well under way the U.S. still managed a very healthy $12.58 trillion GDP. And even with a recession and an unnecessary financial economy meltdown driven by stupidity, by 2009 U.S. GDP was a lofty $14.119 trillion.
So when people ask me about the goals and measures they should apply to tools that get information to employees so that they can work better and smarter I am tempted to say something flip. The truth is that the improvements we all crave in business are accretive — they build up over time. You might not even notice an improvement in the first year but you will.
A better question might be, is social media within the enterprise the real deal? And I think that answer is yes. It’s yes because it follows in a long line of tools that have enabled us to work with information in surprising and creative ways and those ways have spurred significant economic growth over more than thirty years.
There are names for this like paradigm shift and names for the people and companies that make the change. Some are called early adopters others are laggards and where you come down in all of this determines how much benefit you receive from the transition. Be early to the party and you reap rewards that are disproportionate your meager investment. Arrive late and you are at best playing catch-up.
