Oracle Unveils New Products, Then Drifts Into The Cloud

Deal with Amazon means customers can subscribe to Oracle databases as a service.
Oracle last week unveiled software for workplace collaboration and applications to help insurance and pharmaceutical companies and others that depend on clinical trials. But more important, the company made its first move into cloud computing. In collaboration with, Oracle will let customers run Oracle 10g and 11g databases and its Fusion middleware in virtual machines within Amazon's Elastic Compute Cloud service. Since Oracle offers its own version of Linux, the database or middleware can be sent as a complete package to EC2.

It's too early to know how many IT departments will shift toward Oracle in the cloud, but they now have an alternative to Oracle's do-it-yourself grid computing. "Cloud computing is just another word for grid," says Andy Mendelsohn, Oracle's senior VP of database server technologies.

The move into cloud computing is a significant strategy shift for Oracle, which until last week had downplayed the trend. Customers can apply existing Oracle software licenses to the new cloud services, a sign the company's trying to make it easy for businesses to test the cloud. Oracle knows where to look for growth; its just-reported fiscal first-quarter net income jumped 28% to $1.1 billion, with a 29% operating margin.

In the past nearly four years, Oracle has acquired 50 companies, doubled in size to 85,000 employees, and increased its portfolio to 3,000 products. Its focus now is on achieving a level of product integration that eases customers' infrastructure headaches while binding those customers closer to Oracle. "The way to get control of this complexity problem is to integrate right out of the box," Oracle president Charles Phillips said in an keynote speech at last week's Oracle OpenWorld conference in San Francisco.

Does integration sell? Pacific Gas & Electric, an SAP customer, opted for Oracle's portal products and Fusion middleware over other options. Billy Glenn, principal architect of PG&E's Internet strategy, expects business process creation and portal operations to be simpler by taking advantage of the integration between Oracle Portal and Fusion.

A remaining hurdle is getting Oracle's merged Fusion applications out the door in 2009. Oracle must complete that work before its acquired JD Edwards, PeopleSoft, and Siebel Systems customers grow restive.


Oracle President Charles Phillips

Complexity buster

Photo by Javier Pedreira/Flickr
Oracle is showing it will partner as well as acquire to cover the huge breadth of its ambition.

It introduced an appliance it's building with Hewlett-Packard to compete with the likes of Teradata and Netezza in the fast-growing data warehouse market. Oracle says it will take advantage of parallelized queries and execute them directly on an HP storage server, where the data's located, saving moving blocks of data to the database server and thus speeding response.

Products gained through Oracle's $8.5 billion acquisition of BEA Systems earlier this year resurfaced last week with an Oracle brand on them. BEA's Web service-enabling Beehive software has become Oracle's enterprise collaboration platform. With Beehive sitting on an Oracle database, everything from e-mail to instant messaging to user identity and privilege level can be managed for collaborative teams.

And BEA's business process management product set has morphed into the Oracle Business Process Management Suite and part of Fusion Middleware. Oracle will make available the modeling tools that came with the BEA set to allow its customers to design processes that are automated or partially automated, allowing for human intervention or manager sign-offs in the process. The suite includes a business rules engine, which guides processes with the rules of a company, and monitoring of business activities embedded in the process.

Oracle also will introduce complex event processing, or CES, as part of its middleware suite, said senior VP Thomas Kurian. CES identifies and monitors software events as if they were discrete transactions, so it can can be programmed to watch for sets of software events or query an event stream for exceptions or irregularities that might trigger compliance or security alarms.

We look at the cloud computing plans of eight major vendors, from Amazon and Google to EMC and IBM.
Oracle's interest in cloud computing extends beyond databases and middleware on Amazon's EC2. It also enabled use of its database backup product, Secure Backup, to send encrypted data to Amazon's S3 storage service. One large customer has asked Oracle to customize the service so that it can send backups to a non-Amazon cloud, Mendelsohn said.

Oracle also is collaborating with Intel to keep its OracleVM virtual machine hypervisor closely synchronized with the latest virtualization hooks in Intel chips. Intel is building features into its chipsets to bolster VM security, and Intel and Oracle will work together to ensure OracleVM, based on the Xen open source hypervisor, takes advantage of them. That's another spur to cloud computing, given concerns companies have about security at an off-premises computing center.

Oracle is making it easy to give cloud computing a test by making a copy of OracleVM available free and letting its on-premises database and middleware licensing cover initial uses in the cloud. If there's a wave of enterprise cloud computing coming, Oracle doesn't want to miss it, and getting customers accustomed to cloud services might lead to more Oracle product use.