"Next is our commitment to protecting customer's investment in their existing Oracle technology, whether it's PeopleSoft, Siebel, JD Edwards, or E-Business Suite, and then make this huge investment. I think coming down the runway very quickly next calendar year we're going to be talking a lot about Fusion. We've got this new generation of applications by the way that runs on-premise and in the cloud, in the public cloud—as well as private clouds on-premise—or public clouds. Nobody has this.
"SAP Business ByDesign runs just in the cloud. SAP's traditional applications run just on premise." [SAP contends that Ellison's statement is false; SAP claims that "For customers who want to take advantage of the cloud, SAP is working with partners such as Fujitsu, IBM and HP to provide a hosted version of Business Suite, which includes ERP applications for financials, operations and corporate services."
Back to Ellison: "Fusion runs both places. You decide where you want to put this. You can't do that with Salesforce.com. You can't do that, you know, with Workday, a lot of these guys. So we've got this brand new, extremely modern, Java-based suite of applications called Fusion that runs in the cloud, runs on-premise, and is going to dramatically strengthen our position against our cloud-based competitors like Salesforce and Workday, and our traditional competitor SAP. So we think you're just seeing the beginning of us gaining share in applications. That's gonna really take off next year."
9) Competing Against IBM And HP: Ellison says only one can keep up. Echoing a tack he began to take late last year, Ellison heaped considerable praise on IBM as a formidable competitor, while scorning HP as simply not a viable long-term player in the high-end systems business. Whether or not Ellison's comments reflect reality, they surely underscore a huge shift in top-level partnerships that are a vital part of the enterprise IT business.
"Right now our Sun servers—our numbers are behind IBM and HP in the high-end server business," Ellison said. "We think IBM's hardware and software technology is quite competitive, while HP's big servers are slow, expensive and have little or no software value-add. That makes HP extremely vulnerable to market share losses in the coming year. . . .
"We expect overall that our new generation of Sun machines—Exadata, Exalogic, and Sparc Superclusters—will enable us to win significant share in the high-end server market and put us into the #2 position behind IBM very, very soon. Then we'll fight it out with IBM for the #1 spot."
In the Q&A session, Ellison offered this assessment of the software capabilities of his primary competitors: "Now, IBM does have a lot of software, HP does not—which is why I emphasize that that makes them particularly vulnerable.
"But the notion of engineered systems, hardware and software that works together, I believe is going to dominate the high end of the business. By the way, it's already dominating the low end of the business, because I suspect you use either an Apple iPhone or an iPad, or an Android, where specifically in the case of iPad and iPhone, they were engineered to work together; the Android, not so."
10) Sailing And Software: All that success encourages a bit of humor. While earnings calls with analysts don't have to be as dull as reading the phone book, they're also generally fairly straightforward discussions of results, strategy, execution, and future prospects.
So I found it interesting—not important but at least interesting—that after Safra Catz made her prepared remarks and then handed the floor over to Ellison, she included a light-hearted comments that Ellison not only enjoyed but expanded upon. The brief exchange shows how good things are going right now at Oracle: the numbers are so strong that Catz—not exactly given to public displays of humor—engaged in some yuks with her boss in front of the very people who exert massive influence in Oracle's stock price.
I'd say it also reflects a collective sense of enormous confidence and momentum at Oracle. And while not exactly a knee-slapper, the exchange is worth noting if only for its uniqueness. Here's how it happened:
As Catz was concluding her numbers-oriented remarks, she began the hand-off to Ellison, which is almost always the pattern on Oracle earnings calls. But this time she added a little something else about Oracle's broad success:
Said Catz, "Now before I turn the call over to Larry, I want to congratulate him for driving his sail boat to a first-place ranking overall for the year. And with that—it's your turn, Larry."
Ellison replied, "Thank you, Safra. Well, of course the important thing around here is sailing, but right behind that is software and hardware. And I'm gonna talk about our strategy and our server business specifically."
And off Larry Ellison went, charting as he always does his own course in his own way, and ensuring that the sectors of the IT business in which Oracle competes will be anything but dull in 2011.
Bob Evans is senior VP and director of
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