Oracle President Charles Phillips opening keynote at Collaborate failed miserably to connect with the audience. Having him appear via video to make a presentation that did not seem well rehearsed turned off most of the attendees that I spoke to. Style aside, the message he tried to communicate was profoundly important to all of us. This post will analyze the content of the Collaborate speech as well as reports from presentations Phillips made the following week in New York.
Oracle will begin its fiscal year 2011 next month with a very different view of itself than it had this time last year. At that time, the dramatic success of the joint venture with H-P to create the Exadata database appliance had weakened CEO Larry Ellison’s aversion to involvement in the hardware market. Supposedly, a desperate call came from his friend Scott McNealy who did not want to see Sun Microsystems become part of IBM. The resulting acquisition triggered a complete rethinking of Ellison’s vision for Oracle.
Phillips traditionally has the role of articulating the current Oracle strategy. His keynote-via-video began a process of explaining the new Oracle vision to outsiders that has since continued. He reminded us that the old Oracle marketing mantra was “Complete – Open – Integrated”. It now has morphed into: “Hardware – Software – Complete”. Tom Kurian’s in-person speech that followed Phillips made it clear that Oracle still intends to major in openness and integration in spite of the demotion of those terms out of the slogan.
Phillips presentation style may have been low key, but the scope of the vision that he outlined was historic. The new Oracle definition of “complete” is broader than any other IT vendor has ever successfully attempted. Oracle had already scored an IT industry hat trick by becoming the leading DBMS vendor in the market, challenging IBM for leadership in Middleware, and pulling together a portfolio of Applications second only to SAP. Keeping these three plates spinning was clearly not an impressive enough trick so three more were added by acquiring Sun: Storage, Servers and an Operating System.
IBM is the only vendor to successfully attempt anything nearly this grand. The S/360 family of mainframes did it first in the late 1960’s offering storage, processors, operating systems and later middleware. Twenty years later IBM’s AS/400 used a similar formula to conquer the midrange commercial market. Now that another twenty years has passed Oracle seems to believe that the market is once again ready for a top-to-bottom family of integrated hardware and software products. A big difference for Oracle is that this time applications are included, something IBM was never able to pull off.
This attempt also comes after a broad range of open standards has evolved and matured. These standards made it possible for best-of-breed products to be developed by a highly diverse group of vendors that could then be mixed and matched by buyers.
The irony could not be more profound. Oracle only exists because thirty years ago IBM tried to protect one of the integrated components in its mainframe product stack from early obsolescence. IBM held back on exploiting the relational DBMS concepts it invented opening the door for Ellison to do so.
As fun as all of this is to watch (and write about), the implications for customers and Oracle partners are profound. Oracle believes it can achieve dramatic synergies by offering elegantly integrated products across six categories. Phillips mentioned both AS/400 and Apple’s product family as proof points for this thesis. This grand vision has JDE applications as gears within a giant information processing machine that works best and most effectively when bought as a whole.
Phillips awkward first attempt to make sense of all this at Collaborate is no indication of how the story will sound when it is polished and well rehearsed. At OpenWorld next September I expect to hear a compelling, polished rationale presented with great energy and conviction.
The past successes of IBM and Apple each involved suites of products designed within one company with tight integration in mind from the start. This time Oracle is trying to retrofit tight integration to an eclectic collection of best-of-breed products acquired from many different vendors. The opportunity for success appears to be great but so does the risk of failure.
Future postings will examine all the long list of things Oracle has to do right to pull this off. Conversely, as long as sales of the individual component parts that Oracle has acquired remain strong the worst that will happen is that the tremendous growth the grand strategy envisions will not materialize. I remain skeptical about how well the hardware part of this strategy is going to work out, but otherwise think that Oracle’s downside risk is fairly limited.
If nothing else, it is going to be immensely entertaining watching Oracle try to elegantly integrate everything. If they do, it will indeed transform the IT industry while elevating the value of our investment in JDE applications at the same time.
Those interested in additional Phillips quotes about the grand plan can follow this link to InformationWeek’s GlobalCIO site: