It was not a coincidence—nothing Larry Ellison does is by coincidence—that early in his rollout of his Oracle-Sun vision on Wednesday, Ellison brought up IBM and his intention to adopt the strategy that he said made IBM, 50 years ago, "the most important company in the history of the Earth."
A close analysis of that plus other key parts of Ellison's 12-minute unscripted remarks reveals a fundamental challenge that he and Oracle are issuing to every significant company in the IT business: you can bet that Larry Ellison's integrated systems strategy is way off base and thereby choose to stand pat; or, you believe that Ellison's sweeping plan will fundamentally reorder the IT landscape that has been shifting and changing in subtle and not-so-subtle ways for the past year.
Think about it: the new BFF relationship between Microsoft and Hewlett-Packard—is that a coincidence? How about the cozy partnership evolving between Dell and Salesforce.com? Or SAP and Microsoft? Or IBM and SAP? Or Intel and SAP?
And while the IBM of 1960 personifies the model of the company Ellison wants to emulate, he doesn't feel quite the admiration for the IBM of today and talked about how Oracle-Sun systems "crushed" IBM's in recent in-house tests. Ellison also singled out NetApp with a specific challenge, saying that Oracle-Sun has already created what should be the next-gen product for NetApp. (More on those a bit later.)
No, the game has shifted from checkers to 3D Risk, and whether you admire him or can't stand him, whether you want to do business with his newly constituted company or stay as far away from it as possible, you cannot dispute the fact that Larry Ellison has been the primary change agent behind much of this.
Can he deliver on all the big and sometimes-outlandish promises? That remains to be seen. But few executives have single-handedly wielded such staggering influence on the IT business as Ellison, and with Sun almost formally a part of Oracle, he seems intensely committed to making all his prior moves look like nothing more than head fakes.
"We're excited to be in all of these new businesses with this fantastic group of people from Sun combining with the people and technology from Oracle, and we think we will be very competitive in delivering complete business systems to our customers, starting with the chip, where we can do clever things like put encryption and compression and all sorts of interesting things right down in the silicon," Ellison said, fairly glowing about the prospects of deeply coordinated and optimized engineering efforts.
"A lot of stuff that used to be done in software is going to find its way into silicon, and some stuff that used to be done in the database will find its way into the operating system."
And then he turned his remarks away from that vaguely esoteric philosophy to the very tangible world of customer impact and customer value:
"By having all of the pieces in the stack—from the silicon all the way up to the application—we'll be able to deliver systems that run faster, are fault-tolerant, are highly secure—much more secure, much more performance, much more cost-effective, much easier to use than we ever could have delivered by simply delivering components."
But two SAP executives have countered with strongly expressed opinions that Ellison's packed-stack approach is out of date in the age of mobile devices and the cloud, and that it's a misguided attempt to hogtie customers.
SAP executive board member John Schwarz said this in a Barron's article yesterday:
"I have a hard time understanding why they did this," [Schwarz] said, "in a world where mobile devices are moving to the cloud, where mobile devices are more important, and where the infrastructure on which an application runs doesn't really matter. Why have a full stack in that world? We see having heterogeneous, multi-platform capacity as being a more flexible, powerful economically reasonable strategy than Oracle with Sun."
And as we wrote earlier this week, SAP CTO Vishal Sikka, without referring by name to Oracle, said this: