Last week I attend Oracle OpenWorld and broadcasted LIVE for three days with my team. Here is our trip report that summarizes the impact to Oracle's customers and investors.
Big walkaway theme: Do you want more Oracle?
This is the fundamental questions that executives at most of the Global 2000 should ask themselves as they make cloud decisions over the next few years. Here’s the trade-off:
On the one hand, Oracle OpenWorld this week in San Francisco dramatically pushed the cloud state-of-the-art forward. New technology? Check. Oracle has added a “Cloud at Customer” option for enterprises that want private cloud implementation and a public cloud subscription model. It’s the lowest-risk path to the cloud for existing Oracle application customers.
New performance? Check. Oracle’s silicon-to-software integration reaps big performance returns, which — according to its benchmarks — will pay back in the form of less capacity purchased relative to other options. Faster and cheaper almost always is better.
New classes of application services? Check. The cloud has emerged more than been designed, but Oracle is taking a metal-to-app engineering approach. Let’s call Oracle’s cloud the “engineered cloud.” The central design point? Oracle’s applications, which are now easier to run, integrate, and adapt than ever before. For the first time, Oracle users actually can run your business in the cloud.
That’s all good. But do Oracle customers want even more Oracle?
It’s the central question they need to ask. Oracle has set the standard for aggressive enterprise software sales tactics, especially for database software. Now, when you were deploying internally facing applications that don’t directly connect to business volume, Oracle’s sales tactics were an annoyance. But if you’re going to move your business operations to the cloud — well, who wants to explain to their board that prices have to rise or shareholder returns have to fall because Oracle decided to jack up their costs?
We’ve been hearing that Oracle is evolving its business practices to be more cloud-friendly, and that is a very good thing. But we need more details, more evidence, more certainty that “Oracle in the cloud” truly will be a different animal than “Oracle in your wallet.”
Oracle OpenWorld promised an important way forward for Oracle’s most devoted customers, and that’s important. No one who is an Oracle customer wants Oracle to fail. But over the next year, the decision to embed Oracle further into your business will be one part technology and three parts partnership.
What we heard
We hosted over 35 LIVE interviews at Oracle OpenWorld. Here’s what we heard:
- The “Engineered Cloud.” These are our words, not Oracle’s, but here’s the gist: Oracle is making an aggressive play to redirect the evolution of cloud computing, from emergent to engineered, centered on Oracle’s suites of software. It’s a bold move that will require enormous effort to succeed.
- Apps are a new cloud infrastructure. Oracle wants to alter the cloud buying target from virtual machines to applications. Companies based on Oracle applications now have a pretty clear path to the cloud. Equally important, Oracle’s implementation appears to simplify connecting apps in new and easy ways within Oracle’s cloud.
- Cloud options for sale. Public cloud is both a new technology stack and procurement model. Private cloud allows customers to replicate the technology stack on-premise, but using a traditional procurement model. Oracle is adding a new option: Cloud at Customer, which brings both the cloud tech stack and the procurement model on premise. For many customers, this will provide a controlled, lowest-risk path to the cloud.
- We’re keeping our partners, too. Oracle is migrating itself to the cloud, hopes to migrate its customers to the cloud, but also is looking to hold on to its enormous partner ecosystem, arguably the broadest and most valuable in the enterprise domain.
- Rerun the Oracle playbook. Oracle won the database wars of 20 years ago with a simple playbook: performance, partners, and promises. They essentially are rerunning the playbook, this time on the cloud.
What we didn’t hear
Here’s what we didn’t hear but thought we’d hear more of:
- Ease of use. Amazon’s entire business is built on simplicity, including AWS. The services are easy to learn, buy, and use. Oracle? Let’s just say there’s room for improvement.
- Plans to transition developers. Here and there we heard that “developers are important,” that Oracle is going to “give developers more options,” and “other shoes will drop soon.” All good, but the next battle in the cloud industry will be for the hearts and minds of professional developers who, today, don’t favor Oracle. When those other shoes drop, they better leave a big footprint.
- “Plastic” infrastructure. We heard a lot about how Oracle provides elastic infrastructure — options that scale up or down known workloads. We also heard a lot about “intelligent applications” that utilize machine learning and other technologies to improve function. But we didn’t hear much about how the two will come together. Oracle should be a leader in plastic infrastructure: Infrastructure that both scales up and down and reconfigures into new “shapes” based on business requirements.
- Coexistence with other clouds. The cloud will not be a “winner take all” proposition. Today, enterprises typically have at least two formal cloud partnerships. As more businesses deploy branded clouds as a way to engage their customers, those numbers are going to rise. How will Oracle play with other cloud providers?
- The future of database. What role will Oracle’s crown jewel play in the evolving definition of cloud? Will it be just a “source” in big data applications, shipping transactional data somewhere else? Or will it evolve to be a sink, as well? Will the next generation of intelligent applications be built on top of Oracle’s data management technologies? And what about the database revenue stream? Can Oracle attract customers to the cloud faster than presumed new business practices take a bite out of database revenues?
Overall, Oracle OpenWorld marked a tipping point in Redwood Shores. It was an impressive marketing event, but there’s a lot of work to do. Larry’s Army is all in on the Oracle cloud. The question now for customers is: Are you all in on Oracle?
My analysis with Peter Burris LIVE onsite last week.
