Oracle badly needs to articulate a customer-centric vision. The cloud seems like a great place to start--and here's what Larry Ellison should say.
Everything you need to know about Oracle CEO Larry Ellison sprang out like a predator's claw during an on-stage interview last week with AllThingsD editor Kara Swisher at D10, the business news site's annual insider gathering. Swisher hardly needed to put the "H" and "P" together to get Ellison cranked up about that company's former blink-of-an-eye CEO, Leo Apotheker, who had also been at the helm of SAP when the German-based software giant misappropriated Oracle software.
Ellison called Apotheker a thief, reminding the audience that SAP later on had admitted guilt as part of a three-week trial. Then Ellison relived fond memories of Apotheker avoiding Oracle's subpeona by visiting HP customers in Bolivia and Mongolia: "They should have left him in Mongolia, because when he got to California, it got bad," Ellison said.
Upon hearing Ellison call Apotheker "Lee-o," Swisher corrected his pronunciation: "It's Lay-o," she said.
"I'm not going to call him Lay-o," Ellison responded with a smirk.
It reminds me of a classic scene from the Academy Award winning movie "Unforgiven." Fancy boy gunman English Bob, a.k.a. "The Duke of Death" (played by Richard Harris), rides into town with his fawning biographer, W. W. Beauchamp (played by Saul Rubinek). The Duke's nemesis, ruthless sheriff Little Bill (played by Gene Hackman), disparagingly refers to him as "The Duck of Death." Beauchamp corrects Little Bill: "It's Duke." To which Little Bill responds with a glare: "Duck, I says."
Something else interesting happened on that D10 stage. Ellison, whose company is gearing up for some big announcements this week, said he might tweet the announcement ahead of the formal event (never mind that he essentially revealed a good portion of the game plan during the interview). What’s next, a tongue piercing?
Maybe for an encore Oracle will embrace the cloud.
Well, yes, actually, it seems Oracle will.
Oracle Cloud Speculation
Ellison's claim is that he's never had a problem with the concept of the cloud, just the hype behind it. In his estimation, "cloud" is just another embodiment of what the Internet has been delivering for years. Thus, Oracle will announce Oracle Cloud, including a platform-as-a-service (PaaS), database service, Java service, and other services "all on top of other acquisitions, like Taleo for talent management."
Ellison noted that complex ERP capabilities will exist in this cloud, that it will all run on Oracle hardware (surprise, surprise), and that all applications will run in their own virtual machine--decidedly single tenant under the Oracle landlord.
There's plenty to unpack within that brief sound bite; a 140-character tweet is unlikely to clear things up. So let's take a few stabs at what all of this means.
--Are PaaS and Java service the same thing? Even Microsoft learned quickly that its Azure PaaS offering had better extend beyond just .Net applications. Offering a Java environment in the cloud seems a bit too rudimentary for Oracle. It may offer something extremely attractive, pricewise, or the so-called platform will really just be about crafting cloud-based applications that reach into various layers of the Oracle stack.
--Taleo seems hardly the place where you'd just start running instances of Oracle Financials. At the same time, Oracle has stated already that its Fusion apps will run in the cloud, and Oracle has partners hosting existing on-premises applications (as do SAP and Infor). So what is this new strategy, especially if it's not a unified code base for all cloud customers, served in a multitenant environment? And what role will recently-acquired RightNow play?
--A database service is a no-brainer for Oracle, and naturally it will want to evolve its Exadata and Exalytics appliances to cloud-based models.
--Do customers that choose a subscription model escape the maintenance fees Oracle charges customers of its on-premises applications? If multitenancy brings scale for the cloud provider, are Oracle's costs lower and will it pass on those savings to customers?
A Customer Strategy
Beyond this set of new products, Ellison appears to be putting forth a strategic vision. Consider that he was speaking at a press-heavy event, which he rarely ever does; that he announced his intention to be more vocal publicly, via Twitter; and that he revealed an array of cloud products, marking a shift for Oracle (though how much of a shift remains to be seen).
If there is a shift, Oracle's mission becomes more discernible than its catalog of price-gouging Exa-adnauseams. Oracle has always made (or acquired) top-notch technology, or at least it's difficult to argue with its track record. It has also been the master at locking in customers. That's a tough formula to beat, and until now Oracle has hardly had to depend on having passionate customers, the kind who wear the t-shirts and sport the bumper stickers. Sure, they come in droves to Oracle OpenWorld, but that's their job.
Oracle needs to cease being the company whose products customers are forced to pay for and start becoming a company those customers relish doing business with. The old way may have worked for years, but when there are new markets to conquer, each with more nimble and amicable players, the rules change. Oracle's competitors have long included the likes of SAP, Teradata, and Microsoft, but now they also include HP, EMC, and IBM, as well as Salesforce.com, Workday, and Infor.
Ellison doesn't need much help finding targets. After Oracle practically gave birth to Salesforce.com, Ellison and protege Mark Benioff moved from back-handed compliments to backhanded swipes to, ultimately, a few public schoolyard thwaps, the latest coming by way of a last-minute revocation of Benioff's talk at Oracle OpenWorld, following some stinging critiques from Benioff. Early on, Ellison backed and helped launch fast-growing SaaS ERP provider NetSuite, once called Oracle Small Business Suite. Will Oracle now compete with that offering, too?
Last week, Ellison also took a swipe at Workday, the fast-growing SaaS ERP company founded by former PeopleSoft principals Dave Duffield and Aneel Bhusri (among other alumni of Oracle-acquired companies). Workday, Ellison said, doesn't use a database, and because of its Flash user interface, it doesn't run on iPhones or iPads--ignoring the fact that Workday software runs on its own database and on iOS devices.
As Unforgiven's Little Bill says to English Bob as he's being dragged out of town: "I suppose you know, Bob, if I ever see you again I'm just going to start shooting and figure it was self-defense."
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