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Global CIO: Larry Ellison And The New Oracle Rock The Tech World

From optimized systems and new Fusion apps to slashing CIOs' integration burdens, Oracle promises to redefine not only product categories but also customer expectations.

World-renowned for a quarter century as a brilliant technological pioneer and innovator, Sun was better known for much of the past decade as a financial and operational problem child. Almost as an aside, it's interesting to consider that Ellison did both of those outlandish things simultaneously.

(For an extensive list of additional analysis and commentary on Oracle and its competitors, please check out our "Recommended Reading" list at the end of this column.)

Confident that he and his management team at Oracle could rapidly fix the financial flaws, Ellison snatched up Sun after IBM pulled out of the bidding, and he has never looked back. In a public interview last year at the Churchill Club, Ellison, with childlike enthusiasm, shared his geeky veneration for Sun's people and and technological assets:

"We're keeping everything: We're keeping tape, we're keeping storage, we're keeping the x86 technology and the Sparc technology, and we're gonna increase the investments in it," Ellison told the audience. "Sun has fantastic technology -- we think it's got great microprocessor technology, and Sparc needs a little more investment, but we think it can be extremely competitive."

Ellison continued: "Sun has been a national treasure for the last couple of decades, and we think with that combination of Sun technology and Oracle technology, we can succeed and compete and beat IBM. And that's our goal."

Disruption Is Here

In two recent days of meetings and interviews at Oracle headquarters, several top executives shared their perspectives for how they intend to turn that aggressive plan of Ellison's into reality. And what's impressed me about those plans is that barely six months after the formal close of the acquisition, Oracle and its new hardware compatriots have already begun disrupting the broad IT business and have shown they intend to live up to the promise expressed in this article's headline.

From those recent interviews with Oracle executives, plus an extensive analysis of public comments made by Ellison and other Oracle execs in the past 15 months, I've come up with what I think are the five main elements of Oracle's strategy for the next couple of years. This strategy animates not only Oracle's efforts to overtake both IBM (in high-end systems) and SAP (in enterprise applications), as Ellison has vowed to do, but also Ellison's desire to reshape (a) some of the fundamental ways in which the IT industry has operated for the last 20 years, and (b) the standards by which customers will judge IT vendors. I'll list those five and then go into more detail on each.

1. Expand and accelerate -- dramatically -- the potentially massive global market for highly optimized and integrated hardware-software systems, and then dominate that market. (Executive VP Fowler calls them "engineered systems.")

2. Convince CIOs that a complete IT stack purchased from Oracle will deliver not only sufficient openness to avoid the dreaded vendor lock-in, but also superior performance compared with heterogeneous combinations.

3. Convince CIOs that the combination of 1 and 2 above will lower the costs of assembling, setting up, testing, tuning, managing, integrating, trouble-shooting, fixing, upgrading, and running those systems.

4. Complete that infrastructure with ultra-modern Fusion applications that can run with existing enterpise apps, from Oracle or anyone else.

5. Win in vertical markets like retail, healthcare, and telecom by complementing the broad horizontal apps with deep industry knowledge and functionality.

The Five Pillars

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There are other elements, to be sure, and statements of intent are no substitute for future performance. But let's take a look at each of those five elements and assess what impact they have had or are likely to have on customers and competitors and their combined expectations of how IT products and services should be delivered in 2010 and well beyond.

1. Optimized Systems and the Exadata Phenomenon. I've put this at the top of the Oracle strategy stack because it's absolutely essential to bear in mind that while some IT vendors consider purpose-built machines or appliances as niche opportunities or product-line extensions, Ellison views them in the completely opposite fashion. He sees them as the new and overarching delivery model for the computer industry and as the new strategic architecture for Oracle's customers, and he doesn't mince words about it:

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