Saturday, June 20, 2009

The future of IT according to Oracle

On June, 17th I participated in an interesting oracle event: Oracle Day. The event took place near Tel-Aviv airport and its theme was: Building the Future.

Oracle's president Mrs. Safra Catz presented the company's vision. .

Two other senior Oracle managers presented Oracle G11 database and the company's CRM Software Strategy, (presented by a Senior Vice President who was a Siebel employee prior to its acquisition by Oracle). Afterwards concurrent tracks on various technological and applicative topics took place. I participated in the Fusion Middleware track.

Oracle's Vision

Mrs. Safra Catz used an analogy of buying a car vs. buying car parts and building it. As most of car consumers will not be able to build the cars the roads will be almost empty.

Oracle's view is that building and integrating IT systems is similar to building a car by a consumer. It takes a lot of time and resources. The weakest link is integration.

The Oracle alternative is a full solution including applications, infrastructure, build in integration and hardware (after completion Sun's acquisition).

The customers have the choice to use other infrastructure and application solutions (e.g. DB2, SQL Server databases).

The following highlights summarize her presentation:

  • IT solutions should be business driven and not Technology driven.

  • Oracle target market is large and medium Enterprises. The company's goal is to be a leader in three markets: Databases, Middleware and Applications.

  • Acquisitions are part of Oracle's strategy. It acquired successfully 57 companies. Sun acquisition is a natural acquisition. Solaris is the most frequently used Operating System for Oracle products.

  • Oracle launched together with HP Exadata Database machine. It is its first hardware and software combined product in the road towards a complete solution (as depicted in the car analogy).
  • Oracle moved from a collection of local branches to a global company i.e. unified products and unified service across the world. There is single global queue for service requests. The result is better and more efficient service which also reduce maintenance fees from 24% not including weekend (or 28% including weekends) to 22%.
  • The distinction between Oracle and its competitors:

No toys and Mice i.e. no solutions for home and SOHO users – Unlike Microsoft Oracle is focused on Large and medium enterprises.

No services of perpetual integration projects – Oracle does not have costly services such as IBM's IGS services its focus is on products which does not require much work to integrate

SAP market share of new licenses is decreasing significantly due to frequent strategy changes it changed it acquired Business Objects after announcing that it will not acquire companies, it stopped from focusing on small businesses – Unlike SAP, Oracle strategy and focus are steady i.e. Oracle choose the right strategy in contradiction to SAP.

Fusion Middleware Track

Fusion Middleware track includes presentations on BPM (previously BEA product), ESB (BEA product), BPEL (Oracle's product), new development environment (based on Oracle JDeveloper) and Content Management (previously Stellent product).

My Take on Oracle's vision presentation

  • The analogy of car manufacturing is not new to me. However, in the previous time it was used by one of the SOA vendors for a different purpose. The vendor described car parts as parts which were manufactured by niche companies. A company sells a part to all or most car manufacturers, so actually different car manufacturer share the same parts. Only some basic parts are manufactured by the car manufacturer itself. The analogy was used for demonstrating how assembly of services enables creation of an application and Reuse of service across enterprises. The difference between the SOA vendor's analogy and Mrs. Safra Catz's analogy is that in the latter one of the car manufacturers is buying the parts manufacturer.

Is it necessary that the single point of integration should own all the parts manufacturers? I am not sure that this is the optimal model.

I am not the only one. For example storage vendor like EMC buys disks from Quantum (more than 20% of the disks produced by Quantum), but does not acquire it.

The car manufacturing model, in which different manufacturers buy the same Best of Breed parts, looks like a better model for IT consumers in comparison to a one vendor lock in.

  • Are IT systems in a stage in which there is a limited need for non standard or proprietary systems and services? My opinion is different from Oracle's view: There is a long way to go until our IT systems reach that desirable state.

IT systems are in evolutionary process towards more standard systems or Services (SOA, SaaS etc.). The trend is for more Buy vs. less Build but usually IT systems are still a mix (including build of non-standard systems) and we also should not forget maintenance of existing systems. Due to the standardization process enterprises are gradually focused in building systems or processes which differentiate them from competitors, while gradually standardizing what is common.

  • Is the car analogy applicable to Software and Hardware combined or Software and Hardware separately? My opinion is that usually Hardware and Software are separated and will be for the future. There are dependencies but not synergy. A combined Hardware and Software is valuable for Appliance and for special purpose dedicated systems (e.g. Chess playing computers), but is not the best fit for agile and flexible complex systems.

  • Mrs. Katz presented Oracle advantages over Microsoft, IBM and SAP. My opinion about these vendors could be different, but discussing my opinion is beyond the scope of this post. As I already mentioned in a previous post titled: Will Microsoft survive until 2018? These vendors and Oracle are the four SOA Eco Systems that the probability that they will survive is very high. It looks like Oracle agrees with this opinion. As a result it defines them as its competition and therefore Mrs. Katz presented Oracle's advantages in comparison to Microsoft, IBM and SAP.

  • It is true that smoother Integration is a challenge. Expect for additional challenges in integration of Data Centers and External Clouds.

  • Oracle was and is a leader in the databases market. As far as market share in 2008 is concerned it is in second place in the Middleware market with about 15% (including Oracle and BEA). IBM share is more than 30% according to Gartner Group. SAP is still the market share leader in the Applications market followed by Oracle.

  • No more focus on Open Source. Linux was mentioned in a sentence about Solaris and Linux, MySQL was also mentioned. Eclipse was also mentioned in a presentation of the new development environment.
  • Acquisitions are necessary but challenging. I will discuss Acquisition in a future post.

MyTake on Oracle's SOA (mostly related to the Fusion Middleware track)

Oracle's BEA acquisition: SOA perspective – revisited again.

  • A ceremony of signing a distribution of SOA products and education contract between Oracle and Liam One1 (BEA's distributor in Israel) was celebrated during the conference.

It is additional evidence showing the dominance of BEA's products in Oracle's SOA solutions.

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