News


Some of you have sent notes wondering why there have not been any postings to this site in recent months. The pause has been temporary, and for a good reason. All available time has gone into undertaking a major expansion of Andrews Consulting Group – one that will allow us to provide the Oracle applications community with even more useful advice, information, and observations.

The details of what is happening at our company will be posted soon on our own web site. The bottom line is that we are investing to meet rapidly growing demand for all the services and products we offer. Interest remains especially high in BI solutions for JD Edwards and PeopleSoft.

Expansion plans include hiring a person that will follow the markets for Oracle applications and BI solutions and make regular postings to this site. In the meantime I will continue to read the tea leaves as best I can and will cajole my associates to weigh in when they have something to offer.

Postings that get the most positive feedback are the ones that attempt to interpret what Oracle is doing. This appears to be a result of the extreme secrecy that is so much a part of the Oracle culture. Our goal will be to keep sharing anything useful that we uncover and try our best to makes sense out of the limited amount of information that seeps out.

 Realistically, there is not going to be a great deal of news to report in 2011 that is specifically about the JD Edwards and PeopleSoft product lines. As very mature products there is not a lot left for Oracle to do to enhance them. Users of these applications still have lots of open questions about the technologies that surround them and the company behind it all which we will attempt to help answer.

 Following OpenWorld, I have completely updated the presentation made on “Understanding Oracle” at the Northeast Quest conference in July. It has not been presented yet in a public forum but a number of our customers have now seen it. Based on their favorable reactions I will be continuing to refine our views about Oracle itself and will work those ideas into future postings.

During 2011 our postings will also focus on Business Intelligence, Data Warehousing, and anything else that helps facilitate decision-making. Every indication is that this is where many of you will be investing in improvement next.

 Let us know what topics interest you or where your biggest concerns lie. If we have something useful to offer we will weigh in.

For those of you looking for a way to get news and information about JD Edwards one sentence at a time, your dream has come true.  Lyle Ekdahl and others from the JDE management team have set up a Twitter account @OracleJDEdwards.  I have to give them credit for trying something new and trendy.  At the same time, I will freely admit to being too old and cranky to fully appreciate this new communication medium. 

Being a writer from the old school, I do not know how to convey much of value in 140 characters.  In his early posts Ekdahl also seems to be struggling to find his voice.  A recent post informed us “Paris day one. 3 customer, 3 internal sales meetings. Tout est bon!”  The jet lag he alluded to in another tweet may be the reason why posts like this seem to lack what the French would call panache. 

If someone forced me to tweet on a business trip, I might have experimented with a more poetic style such as “Eating, walking, glancing out a window … Ah, Paris! You make the ordinary sparkle with joy… even explaining tools release 8.98” 

Lyle Ekdahl is the most likeable and entertaining member of Oracle’s senior management team.  It is always fun to hear him speak and to wonder what innovative sight gags he might choose work into a presentation.  I hope to be proven wrong, but Twitter may turn out to be too limited a medium for him to use to convey anything other than mundane details about his day. 

Try it out for a while and let me know what the rest of you think.

All JDE World customers and over half of those with EnterpriseOne still make some use of IBM Power servers with the i operating system (once know as OS/400).  Introduction of the IBM i Solution Edition for JD Edwards is therefore very big news for nearly all of you – including many that have switched from IBM Power servers to commodity Intel servers over the years.  IBM has finally decided to get serious about using price to gain market share. 

For more than a decade price has been the main reason why so many of you either abandoned i or limited the workload put on it.  Power servers running i are reliable, easy to operate, perform well, and use very little electricity and AC.  For the longest time IBM managed to negate these huge competitive advantages by putting too high a price premium on them.  IBM charged this premium because most customers would tolerate it in the short term.  The result of this strategy was high margins but a steady loss of market share.

The turnaround for IBM is now complete.  The cost is now less than commodity Intel servers for hardware.  Savings grow when software is added in mainly because iOS has a built in DBMS and it is not necessary to pay extra for one.  The biggest savings for many will come in maintenance, operation, support and utilities. 

A white paper that IBM commissioned from ITG makes a clear and compelling case for at least considering Power servers the next time you need more JDE server capacity.  IBM’s own white paper  describing the IBM i Solution for JD Edwards is also a worthwhile read.

In times like these when every penny counts, it feels good to have vendors fighting with each other to save us money.  The complete turnaround by IBM in its pricing strategy is thus a very welcome development.  Every one of you involved in making JDE hardware buying decisions needs to at least kick the tires on this intriguing offering.

Just when it looked like the feud between Oracle and HP was over Oracle CEO Larry Ellison decided to go on the offensive again by attacking HP’s newly appointed CEO Leo Apotheker.  In an email to the Wall Street Journal Ellison said “HP had several good internal candidates…but instead they pick a guy who was recently fired because he did such a bad job of running SAP.” 

My own initial reaction to HP’s CEO choice was also to wonder whether Apotheker was the best available option given the way his long career at SAP ended.  The question in my mind is thus not whether Ellison’s opinion is right – he probably is.  What I don’t get is why Ellison chose to pick at the scab of this freshly healed wound.  Why not let others raise this point? 

Ellison’s propensity to lash out in public at real and imagined enemies seems to have increased recently.  Has this been the result of not having the calming influence of Charles Phillips around?  If so, how long will it be before new co-President Mark Hurd can convince Ellison to let him be the full-time public voice of Oracle? 

Oracle’s revenues, profits, stock price and image in the market are all on the rise this year making it an odd time for Ellison to be attacking anyone.  If there ever was a time when Oracle could afford to be composed and gracious this is it. 

The legendary late Senator Sam Erwin once said (in his wonderful southern drawl) “When you lose weep softly, and when you win brag gently” – great advice that Ellison should consider taking. 

Those looking for more details can check out CRN’s coverage of this story.

OpenWorld 2010 was supposed to be a place to go to get answers.  I came back mostly with more questions.  A number of them are listed below along with a few side comments.  In the coming months I will attempt to bring more clarity to the issues each raises: 

  • Were Fusion Applications actually announced?  If so, it was the strangest major product introduction ever.  Too little information was provided to make sense out of it.  I plan to try hard to assemble the limited amount of information available into a coherent story over time.  In the meantime, I believe that there will be little if any near term impact on the JD Edwards community.
  • Has Oracle lost interest in the applications market?  It sure seemed like it based on Ellison’s single-minded focus on hardware and the cloud.  I suspect, however, that the impression conveyed was just due to Ellison being his usual eccentric self.  As Hurd takes greater control I expect the mixed and confusing signals to diminish.
  • What is Oracle trying to do with cloud computing?  Ellison twice attacked Salesforce.com, the most successful cloud computing software provider.  Picking on it seemed petty and unnecessary.  He then bragged about hiring IBM’s top cloud computing expert and having her report directly to him.  What she will be doing was completely unclear given his dislike of the concept. Ellison also made fun of the idea of cloud computing then included the word cloud in the strange name of his favorite new product the Exalogic Elastic Cloud.  Is anyone out there less confused than I am about what Oracle is trying to tell us?
  • Did Oracle just reinvent the mainframe?  Ellison used the term “big iron” to proudly describe his new invention – an expensive but exceedingly powerful, physically large computer offered with a free operating system capable of consolidating the workload of many smaller computers. The only mainframe-ish thing it doesn’t yet do is run IBM S/370 compatible applications.  Any bets that it won’t do so some day?  If it is not a new age mainframe I don’t know what it is.
  • How long before Mark Hurd makes a noticeable impact on Oracle?  All we could tell from his brief appearance is that he looks good in a suit and has great stage presence.
  • Did Ellison promise Hurd the CEO job to entice him to join up?  On paper, the co-President job that Charles Phillips left was a huge demotion for Hurd.  There has to be a promise in place to let him do much more over time.
  • What role will Ellison play as Hurd gains power?  Will Hurd leave if Ellison’s fingers cannot be pried off the wheel?  How effectively can the two of them work together in the meantime?
  • What happens next to Tom Kurian?  A month ago I felt that Tom Kurian, the executive in charge of all software development, was the strongest internal candidate to one day take Ellison’s place.  Hurd’s arrival killed any chance of that happening.  In addition, Kurian’s former boss Chuck Rozwat returned from a sabbatical presumably to take over development again.  It is hard for me to see Kurian quietly stepping back into a lesser role.  At the same time, I can picture other major IT vendors making a run at him.  For example, Kurian has to be on any short list if Microsoft decides to replace Steve Ballmer.
  • Is Solaris strategic?  Ellison waxed poetic at great length about his new “Unbreakable” version of Linux – a strange choice for a vendor trying to convince new customers to convert to the Sun Solaris operating system.  Was this just another unintentional message or is Oracle trying to tell us something?
  • Has the rift with HP been resolved?  The lawsuit was settled minutes before the conference started, but will the alliance ever be strong again?
  • Will OpenWorld 2011 be worth attending?  Oracle has a great deal of work to do to convince customers to come back.  I am optimistic that Hurd will make sure that OpenWorld 2011 is much better than this year was.  Without concrete assurances that it will be better, I will not recommend it to customers. 

Others that attended this year, especially those that have a different perspective than mine are encouraged to provide input.

Oracle provides outsiders with so little information beyond the name, rank and serial numbers of its offerings that those of us trying to figure out what it is up to need to resort to psychic or occult techniques.  Having too little hard information to go on, I will offer my read of what I heard and saw this week at OpenWorld safe in the knowledge that the best I can hope to be is within one standard deviation of the truth. 

CEO Larry Ellison told us on Sunday that his speech scheduled to run one hour would focus on Fusion Applications.  It started fifteen minutes late because Infosys, the warm up act, didn’t know when to get off the stage and needed a non-subtle hook.  The late start did not stop Ellison from spending over 45 minutes recapping what he told us on Sunday. 

Mixed in with a re-announcement of Exalogic Elastic Cloud was a classic Ellison attack on a competitor.  This time it was Salesforce.com, a business he went after with great vigor Sunday.  Ellison seemed surprised that its CEO had the nerve to respond by pointing out that a “private cloud” wasn’t really a cloud.  Those keeping score at home can add one more vendor to enemies of Oracle list. 

I watched Ellison’s keynote along with a room full of press and bloggers.  The frustration with his decision to use precious time to repeat his Sunday hardware speech was tangible.  Mercifully, the subject finally turned to Fusion Applications at 4:15 – the time the session was due to end.  For the next 20 minutes Ellison gave an interesting and articulate summary of what Fusions Applications were and why he decided over five years ago to develop them.  I will offer a series of postings on them later after taking more time to try to make sense out of all that I heard about them this week. 

Ellison then handed over the stage to the Fusion Applications team to do a demo.  It is just me, or does everyone else find software demos done to a large audience from a stage impossible to follow and understand?  I am not too proud to admit that I could not follow what was being presented so I will not venture an opinion.  I will observe that the screens that flashed by sure contained lots of cool graphics.  The iPhone apps that appear to be part of the product looked interesting but they went by too fast for my aging brain to absorb. 

What did this all mean?  Should anything profound be read into the late and rushed presentation of Fusion Applications?  Was this just Ellison being eccentric (and in love with his new hardware appliance) or was it an indication that Fusion Applications are not really ready to be given featured billing?  My guess is some of both. 

Was the Fusion Applications story poorly told at OpenWorld because it remains an incomplete work in progress and an enigma to top management, or is this just a case of Oracle not being very good at explaining itself?  I have to vote for the former at this point. 

Whatever they turn out to be in the long-run, Fusion Applications do not appear to have a great deal of relevance to our community for quite some time.  Instinct tells me that they will end up being profoundly important to all of us, but not for a minimum of two years.  Three to five years is more likely.  This will give us the breathing room we need to make sense of them.

My grandson’s first grade class often starts the day with show and tell time.  The same is true for the keynote sessions at OpenWorld.  As I write this Michael Dell is up at the front of the class telling an embarrassingly small percentage of the 40,000+ people here about Dell’s product line.  Right now he is droning on about the C4-10X a server featuring 7,000 microprocessor cores with 16 teraflops of power.  Does he really think that very many of us traveled to San Francisco to hear vendors other than Oracle talk about the esoteric features of their product lines? 

Every single keynote at OpenWorld has started with a vendor presentation.  HP, Fujitsu, and Intel have already taken turns.  Infosys gets the stage before Ellison returns later.  Among them Intel came the closest to making an interesting presentation that conveyed information that might actually be useful to some of the attendees.  The rest were painfully poor and completely out of tune with the needs of the audience.  Sadly, I am sure that each of these vendors paid Oracle a great deal for these slots. 

Oddly, Oracle has made no coherent attempt to explain itself to a huge captive audience of its customers and vendor ecosystem.  Plenty of sessions deal with the esoteric details of specific products but nothing has been presented to tie it all together.  I came here hoping to learn what has changed at Oracle now that it is a full-fledged hardware vendor and how it intends to play that role.  Understanding what Fusion Applications are and how they will impact existing customers was my second priority.  Learning what Oracle thinks about the big issues of the day in IT was also a goal. 

So far, Oracle is 0 for 3 with Ellison due up to bat this afternoon.  The vendors who paid so much for my attention are also 0 for 3 with a last one due up as a warm up act for Ellison.  The customers I have talked to here share my disappointment. 

The one theme of consequence that has come out of the conference so far from Oracle can be stated over-simplistically as: Public cloud computing – bad, Oracle based private cloud computing – good.  A good article reinforcing this view can be found on the CRN web site ( http://www.crn.com/news/cloud/227500391/oracle-exec-details-potential-pitfalls-of-cloud-computing.htm?cid=nl_vi&itc=refresh ). 

Oracle is not making it easy to figure out what it is up to here, but I am not one to give up easily.  I intent to plug away until some semblance of clarity emerges.  Please be patient until then.

Anticipation was high for OpenWorld 2010 because it seemed like there was so much to hear about including the emergence of Fusion Applications, the integration of Sun, and a new generation of BI products.   After almost two days a picture is starting to emerge but it not because anyone from Oracle has concisely told us what it is trying to communicate.

It was no surprise that Oracle led with new hardware appliances – the ability to create new combinations of hardware and software were the stated reason for buying Sun.  Ellison’s decision to dive in and announce one of them before offering any context for how it fit into the big picture was a little disorienting, especially to the majority of attendees that care far more about software than IT infrastructure.

Ellison hinted at a new marketing theme with the chain of logic he used to explain what the Exalogic Elastic Cloud computer was all about.  The odd name (almost certainly concocted by Ellison himself) seems to signal an attempt by Oracle to reshape the way the industry uses the term “cloud computing”.  It will almost certainly help hasten the demise of this particularly odd bit of jargon.  I cannot see Oracle succeed in making the idea of buying and paying for software over the Internet as it is used (aka Software as a Service or SaaS) go away.

Oracle’s resident product genius Tom Kurian shed a little more light on the Oracle strategy in his keynote.  It expanded on the themes Ellison had hinted at during his opening.  As best as I can tell, Oracle has its own vision of how the IT infrastructure of the future ought to work.  Not surprisingly, it starts with a new generation of appliances that elegantly integrate hardware with lots of middleware to provide a great place to run applications.  Oracle, of course, can now supply everything needed and bundle it together.

Oracle proposes to call new age data centers filled with these appliances “private clouds” thus making it appear to be in favor of a style of computing I believe it fears and loathes.  If IT buyers can be convinced to implement Oracle private clouds then all will be well in the universe – and software will continue to be bought the way it always was.

A great irony to me is that Oracle seems to be attempting to re-invent a combination of both the mainframe and the original IBM AS/400.  The Oracle private cloud appears to be a combination of hardware and software that does everything in one elegantly and integrated bundle – the original AS/400 value proposition.  Like mainframes the hardware supporting this is (to quote Ellison) very, very, very powerful.

I plan to expand on this theme of Oracle trying to reconstruct the business model IBM used so successfully decades ago in future postings.  For now I need to dive back in and try to absorb enough information to attempt to make sense out of it all.

San Francisco’s famous fog lifted just enough Sunday night to reveal a change in the landscape – a new computer appliance from Oracle called the Exalogic Elastic Cloud.  Oracle CEO Larry Ellison took the opening keynote slot that Charles Philips was scheduled to fill before his rapid exit less than two weeks ago.  Instead of giving us a CEO level overview of the transforming changes that Oracle has gone through since the last OpenWorld, Ellison did what he feels most comfortable doing – talking about the technical details of a cool new product.

Exalogic Elastic Cloud certainly sounded exciting when Ellison used his story telling style to explain how it came about.  Basically it is an appliance that combines servers, storage, a new version of Linux (or a new release of Solaris) and lots of middleware.  Ellison claimed that it offers more than 10 times the throughput of IBM’s top end 795 servers at less than a quarter of the price – certainly cool if true.  He gave the impression that it works alongside the Exadata database appliance introduced a few years ago.  Exactly how the two work together was not clear.

It was not obvious when he started what Ellison was leading up to.  He started with a tutorial about his view of cloud computing comparing the way Salesforce.com offers its applications through the network with an approach pioneered by Amazon called Elastic Compute Cloud or EC2.  The bottom line was that the Amazon model was more flexible and capable.  Ellison then claimed that Oracle had built something similar into a hardware/software appliance.  By comparing it to the Amazon offering Oracle feels justified in including the trendy but ill-defined term “cloud” in the name.

I have always thought of “cloud” as referring to computing done largely on a network of computers that others own and control.  The new Oracle appliances don’t really follow that model.  Presumably, Oracle would claim that the new machine brings the advantages of the external cloud to the data center.  I take the more cynical view that Oracle is trying to associate a new product with a trendy concept by hijacking an ill defined term and reshaping its to its own agenda.  Oracle is hardly the only vendor that uses the oxymoron “private cloud”.  HP, IBM and its other competitors do the same thing so why not.

All-in-all the opening keynote seemed a little surreal to me.  Over 40,000 people had gathered to learn more about Oracle.  After a boring introduction and some partner awards the stage was given to HP (Oracle’s new enemy).  Obviously HP had paid a great deal back when the partnership was strong to get this slot.  HP made no mention of the behind the scenes soap opera and instead gave a dull summary of its product line.  I am sure a few people in attendance thought it was mildly interesting but the people I spoke to were bored to tears.

When Ellison mercifully took over the stage, he was energetic and articulate as usual.  Sadly, he said essentially nothing about the company in general or major trends in the market.  He jumped right into the lead up to his hardware announcement.  Fifty seven minutes into his scheduled hour Ellison remembered that he had some slides on something else and made brief mention of Fusion Applications.  We were told that the big news on Fusion would come in his next keynote near the end of the conference.

The only explanation I can offer for why Oracle is doing so poorly this year in communicating what it is up to is the departure of Charles Phillips who traditionally did more than anyone else to tie things together.  In his absence OpenWorld is drifting around without a rudder so far.

HP has just jumped to the head of the line of major IT vendors that do not like Oracle leaving IBM, SAP, Microsoft and many others to fight over second place.  The unraveling of Oracle’s strongest partnership has come very fast.  It started when Oracle bought Sun and backed out of its joint agreement with HP to develop Exadata – a sin that was forgivable as long as the two CEOs involved played tennis regularly. 

A few weeks ago the HP board sentenced Hurd to the death penalty for a crime Ellison thought deserved a speeding ticket. He leapt publically to Hurd’s defense in a strongly worded letter.  The crafty side of Ellison’s huge brain then kicked in and saw this as a wonderful opportunity.  Hurd could replace the once effective but now wounded co-President Charles Phillips who wanted out. 

The HP board wanted Hurd to suffer, not to instantly rise from the dead to haunt them.  It weakly counter punched by launching a lawsuit aimed at preventing Hurd from taking the job.  The suit claims that working for Oracle violates Hurd’s employment contract.  I am no lawyer but it is my understanding that employment contracts are very hard to enforce in California.  If that is the case, the best HP can hope for is that Hurd will be discrete in using information brought over in his head.  That appears to be all that IBM got after suing to prevent one of its On Demand experts from going to work for Ellison a few months ago. 

Rather than quietly waiting for the issue to work itself out in court, Ellison has gone on the offensive by threatening to let the whole alliance between the two companies come apart if the lawsuit is not dropped.   That may already have happened in practice since it is hard to picture HP’s board caving in to a very public threat.  If all that was not bad enough for HP, a number of its hardware resellers are reportedly ready to jump over to Oracle / Sun following the Hurd hiring. 

Who knows at what point the downward cycle will hit bottom or which side will throw the next rock.   HP EVP Ann Livermore is scheduled to speak right after Ellison gives the opening keynote at Oracle OpenWorld on Sunday.  I can’t wait to hear how she is introduced or what she says.  If someone from another company ends up filling that speaking slot it will be a clear indication that full-scale war is being waged. 

Any of you that follow HP more closely than I have are welcome to weigh in.  I can’t claim any special knowledge of HP but have always had the impression it was one of the classier vendors in the IT market.  This whole sad soap opera is hardly enhancing that reputation.

Oracle CEO Larry Ellison likes to surround himself with very smart people that he knows, likes and trusts.  When a long time tennis partner, personal friend and proven top executive suddenly became available it was like Christmas in August.  Mark Hurd’s untimely exit from HP represented great timing for Oracle.  Apparently Oracle co-President Charles Phillips was on his way out anyway so there was a hole to fill at the top. 

Phillips got caught up in his own public scandal last year (http://www.huffingtonpost.com/2010/01/23/yavaughnie-wilkins-billbo_n_434106.html).  While enormously embarrassing personally, it did not seem to shake Ellison’s faith in him.  In my opinion it eliminated whatever chance Phillips had of eventually taking over for Ellison.  Phillips apparently expressed a desire to be phased out last year after reassessing his career prospects. 

The announcement that Mark Hurd will take Phillips place raises a big question.  Phillips had the mildly inflated title of President at Oracle.  His role was to oversee the sales and marketing function and to act as the public face of Oracle.  His replacement Hurd had total control at HP, a company he had put on a trajectory pointed toward making it the most powerful force in the IT industry.  For Hurd to just assume the limited role that Phillips played at Oracle appears to represent a huge step down. 

The critical functions that Phillips did not control are now being managed by co-president Safra Catz and by development executive Tom Kurian.  Catz runs the operation day to day and has lots of influence over strategy and acquisitions.  Kurian collaborates directly with Ellison to formulate Oracle’s sophisticated product strategy.  The big question is thus how Ellison gets all of these intelligent, ambitious and talented people to work effectively together without bruising egos. 

I have to believe that Hurd has been promised the CEO job at some point in the not distant future. It is just too hard to picture Hurd patiently waiting to get his hands back on the wheel for more than a few years.  A reasonable assumption is that something was worked out over the tennis court last month that both can live with.  Having Hurd take over in stages over 1-3 years seems like a reasonable guess. 

Ellison just turned 66 and Hurd is 53 so the math works.  For this chain of logic to be true, Ellison has to be ready to think about backing away – something he has never before shown any inclination to do. 

I suspect that Ellison will want to wait until Oracle hits a high note before officially relinquishing control.  The transformation of Oracle into the IT industry’s leading one-stop-shopping vendor could provide that high point.  It is something that could happen in two years or less if the Sun acquisition works out as well as Ellison thinks it will. 

With Hurd in the mix Oracle is definitely going to be a different company than it would otherwise be.  Exactly how his influence will be felt in the near term seems uncertain.  It may not be apparent until some time next year. 

My last posting compared all this to a soap opera.  I had no idea at the time how true that would turn out to be.  Stay tuned, this story line is just beginning to play out and there will be many more plot twists to report on and analyze.

Last week Oracle CEO Larry Ellison sent an angry email  to the New York Times attacking HP’s board for its decision to fire CEO Mark Hurd.  You can catch up on all the salacious gossip and speculation about Hurd and what he did elsewhere.  I don’t have the time to develop an informed opinion as to whether the firing was justified. 

What interests me is what this episode shows us about Ellison.  First, it reinforces the notion that Ellison forms strong, passionate opinions that he is not afraid to express using strong, non-tactful language.  This propensity is one reason why we see so little of Ellison in public – his minders are terrified that he will say something politically incorrect. 

We also see that Ellison is intensely loyal to his friends and is willing to stand up publicly in their defense.  Even though he has a reputation for being hard to work for, I believe that this feeling of loyalty extends to his inner circle of executives and that they know that he would fiercely defend them if attacked. 

Most importantly, this episode sheds some light on the complex relationship between Oracle and HP – two companies that a few years ago were the closest of allies.  Now that we know that Ellison and Hurd are friends and tennis partners, it is easier to understand why the corporate relationship has remained intact in spite of increasing direct competition between the two. 

Just a few years ago when Oracle just sold software and HP was primarily a hardware vendor, a close alliance made a great deal of sense.  It was no surprise therefore that the first generation of Exadata came out as a joint product combining Oracle’s database with HP servers.  The great success of that offering made Ellison receptive to the idea of acquiring Sun Microsystems when it came into play last year. 

That acquisition was something of a stab in the back to HP.  It lined the two of them up alongside IBM as the major “one-stop shopping” IT vendors.  Vitriolic attacks by Oracle on IBM have become commonplace since the Sun acquisition, but HP has largely been ignored as a competitor.  Even though HP under Hurd appeared to be a greater threat to Ellison’s ambitions, it never saw the business end of the verbal club with which Ellison regularly beats IBM. 

I have to wonder if Hurd’s eventual successor can maintain the current cordial relationship.  A weak replacement will play into Ellison’s hand and make it easier for Oracle to become the industry’s most influential vendor.  On the other hand, a CEO strong enough to be highly successful might have too large an ego to defer to Ellison.  A future unraveling of the still cordial relationship thus seems more likely than not. 

Those of you that are customers of both Oracle and HP are the ones that need to follow this soap opera most closely.  The rest of us can grab a cold beverage, recline in our La -Z Boy chairs (a product made using JDE software), and enjoy the show.

Well thought out and researched opinions about Oracle Corporation are sadly hard to find.  Bob Evans of InformationWeek has written a very nice analysis of some the implications of the Sun acquisition that I highly recommend.   Those of you that shares my interest in trying to make sense out of Oracle and what it has in store for businesses that are dependent on its software should find it worth reading. 

You can find the article at: A Good Article

Oracle CEO Larry Ellison was one of forty billionaires that have promised to give at least half of their fortunes to charity over time.  These pledges were obtained through an effort started by Bill Gates and Warren Buffet who have each previously promised to give away nearly all of their fortunes during their lifetimes.  The terse letter Ellison issued to explain what he has done said: 

“To whom it may concern, 

Many years ago, I put virtually all of my assets into a trust with the intent of giving away at least 95% of my wealth to charitable causes.  I have already given hundreds of millions of dollars to medical research and education, and I will give billions more over time.  Until now, I have done this giving quietly – because I have long believed that charitable giving is a personal and private matter.  So why am I going public now?  Warren Buffett personally asked me to write this letter because he said I would be “setting an example” and “influencing others” to give.  I hope he’s right. 

Larry Ellison ”

Ellison’s personal wealth is estimated to be nearly $30 billion by Forbes magazine.  Just last week Ellison was declared to be the best paid CEO over the past decade by The Wall Street Journal.  Most observers seem to feel that he deserved to be at the top of the list given the success Oracle enjoyed during that period under his leadership.  Knowing now that most of that money will be given away over time makes it appear even more justified. 

A popular beer ad revolves around the fictional “most interesting man in the world”.   This latest bit of information about the enigma that is Larry Ellison makes me wonder if perhaps he could be the most interesting man alive.  His accomplishments so far are amazing and yet he seems to be just warming up.  Oracle has transformed itself from an interesting niche player in the IT market into perhaps its most important force.  Ellison appears to be in the process of completing an even more dramatic personal reinvention. 

Not long ago most of us thought of Ellison as a brilliant but eccentric technocrat who was as interested in runway models, fast vehicles, and an extravagant lifestyle as he was in running a business.  His colorful, blunt and untactful comments made him seem like more of a comic relief character than a leading man in the unfolding drama of the IT industry. 

Suddenly Ellison has become the best-paid CEO running one of the better-managed businesses anywhere.  Now we find out that he has secretly positioned himself to become one of the great philanthropists of our era.   All this after a cool cameo appearance in IronMan 2 that seemed to poke fun at himself.  When is he going to stop surprising us?

A blog web site called Software Advice written by Stephen Jannise offers some interesting speculation about what Oracle might acquire next.  I found his analysis an interesting read.  The site offers a chance to offer your own opinion on what might get bought next.

I personally took the survey and voted for Informatica as the most likely of the choices on the list he offered.  Multiple Oracle insiders I have talked to believe that there is a strong interest by Oracle.  For some unknown reason the deal refuses to fall into place.  When too much time passes, Oracle frequently loses interest and moves on – what I suspect has happened here.

My own belief is that none of the companies that Jannise mentions are likely to be next up.  My read of the tea leaves is that the Sun acquisition was so big and challenging that the next few acquisitions will be small ones.  Most likely they will be companies that few of us have heard of.  Oracle has not permanently lost its appetite for deals, but the pig that was just swallowed has to pass through the python before it gets hungry again.

If a blockbuster deal is next such as Teradata, VMware or Computer Associates, it won’t therefore happen for quite a while.  Besides, none of the ones mentioned in the article seem like a great fit for Oracle to me.  I was able in this blog to correctly guess that Oracle would pick up the pieces when IBM failed to acquire Sun, but my assumption was that it would turn around right away and spin off the hardware.

Have fun joining in the guessing game if you want.  Right now I am personally more focused on seeing how Oracle will digest what it has already eaten than being concerned about what is next.

Larry Ellison was the best paid CEO in the world over the course of the past decade according to the Wall Street Journal.  His total compensation from Oracle for the decade was estimated at $1.84 billion including the value of stock, options and everything else.  Like most Americans, I am appalled at what some CEO’s are paid, especially the ones that run the financial institutions that nearly ruined everything for all of us.  In Ellison’s case, I think the other stockholders (Ellison himself owns the biggest single chunk) appear to have made a nice return on their investment.  Ellison hardly needed more money, but he earned it none-the-less. 

It made no sense to me five years ago when Oracle bought PeopleSoft.  I was wrong.  Other acquisitions along the way seemed illogical or overpriced when they occurred because the sophisticated strategy that Oracle was following only became apparent over time.  The net effect of all these seemingly unusual moves made Oracle into a much stronger and more valuable company. 

Ellison now has a strong and stable management team behind him – something that was not always the case in the past.  Still, credit for Oracle’s outstanding overall results over the decade has to go largely to the boss.  He took huge chances and made them pay off.  Unlike so many other CEOs, the bets he placed put much of his own personal fortune at risk.  By all accounts, he was the one that made the big and tough calls along the way. 

All of the other major IT vendors including Microsoft, IBM, SAP, and HP struggled at times during the past decade.  Oracle has significantly gained market share and influence relative to all of them during that period. 

I have no idea what Ellison will do with all the extra money that Oracle’s success is bringing but I do feel that in his case he earned it.

Last week Quest held its annual Northeast conference at the Mohegan Sun casino in Connecticut with over 300 people attending.  John Schiff represented Oracle’s JDE management team at the event.  His presentation differed very little from the one given by his boss Lyke Ekdahl at Collaborate a few months ago.  It represented more of a chance for those that had not yet heard this year’s story directly from Oracle to catch up than an opportunity to learn anything new. 

Oracle’s JDE strategy has settled into a comfortable groove that we can all understand.  New application and tool releases continue to come out every 1-2 years with features that appeal to increasingly narrower segments of the installed base.  This is not surprising because there is little need or clamor for dramatic new features given the maturity of the product.  These new releases will continue for a decade or more into the future. 

The more dramatic opportunities for improvement come from outside the JDE applications themselves in the form of what Oracle calls “edge” applications.  Demantra and Transportation Manager are good examples of the kinds of applications that can be added.  Much of Oracle’s development funding goes to not only obtain and enhance a growing set of these applications but into integrating them in increasingly elegant ways to existing products like JDE.  It was disappointing that there were almost no sessions at the event dedicated to edge applications. 

Oracle also hopes to enhance the value of its traditional applications through its growing portfolio of Business Intelligence offerings.  Last week Oracle BI 11g was officially introduced in a separate event.  There was a lot to it but from our selfish point of view most of the improvements will have limited appeal to the JDE community.  Future postings will cover this announcement in detail and explain why our particular needs are not yet a priority for Oracle. It is also disappointing that Oracle makes so little effort to promote its BI product line at Quest events.  The one BI presentation offered by Oracle drew only six people (myself included) and made no mention of the big announcement made the day before.  

Oracle may not have promoted BI, but everyone else did with nearly 20 different presentations covering different facets of this topic.  Oracle missed this chance to explain its new BI offerings to our community but will be able to make up for it at the upcoming OpenWorld conference in September. 

My own presentation on Understanding Oracle seemed well received.  It summarized all I have learned about the unique and hard to comprehend company that we are all so heavily dependent upon.  I plan to update the presentation after OpenWorld where a great deal of invaluable information should be available, especially regarding Fusion Applications.

Oracle has very successfully closed the books on fiscal year 2009 and already held its new year’s sales kickoff events including a web based event for partners.  Little in the way of news came out of it other than a relentless message to partners to become highly specialized on a subset of the 10,000 products Oracle now sells.  Partners were told that the new year is one in which we all need to “lean in”.  This was Oracle’s awkward way of saying “Absorbing Sun will consume most of our energy so we won’t be doing any big new announcements.  Help us by keeping up sales of all the stuff we now offer including whatever new we announce at OpenWorld.” 

I am anxiously awaiting Quest Northeast on July 21 and 22 here in Connecticut at the Mohegan Sun casino.  As previously noted here I will be offering a session on Understanding Oracle on Thursday the 22nd where I hope to meet some of you in person. 

Between now and then I will be taking some time off and calling on a few remote clients.  As a result, this will be my last posting for a few weeks.  After that I expect that there will be lots to write about as OpenWorld approaches.

Most Oracle JDE customers make some use of IBM servers or software so the slowly deepening rift between these two vendors has some relevance to them.  The latest episode in what is becoming something of a soap opera involves Joanne Olsen, an IBM executive who was recruited by Oracle to lead its On Demand efforts.  IBM was not amused by news of her departure and has filed a lawsuit to attempt to block it based on a non-compete agreement that she signed. 

It is my understanding that this type of lawsuit between IT industry giants is fairly rare.  The filing seems to reinforce the observation made here in earlier postings that the once quite cordial relationship between Oracle and IBM is in a downward spiral.  The Oracle acquisition of BEA a few years ago was the first of many direct challenges to IBM.  The latest, of course, was Oracle’s strong entry into the server market through the acquisition of Sun Microsystems – a business IBM was unable to acquire for roughly the same price that Oracle ended up paying.

The suit filing alleges that Ms. Olsen “… knows specific areas that IBM is targeting for growth and specific companies that IBM is considering acquiring in those areas.”  The new position that Ms. Olsen was recruited to fill apparently will report directly to Oracle Chief Executive Larry Ellison if she is allowed to take it. 

For nearly a decade IBM has been heavily promoting use of the term “On Demand” to describe the various ways in which software can be provided as a service rather than a product installed on computers that the client owns and operates.  On Demand seems to encompass many things including what others sometimes call “cloud computing”, software as a service, and other similar things.  IBM has invested heavily to build an image as the leading provider of On Demand services. 

Ellison is on record as being skeptical about how quickly the industry will adopt the model of having software run by others.  The creation of a new senior position to oversee this new selling model seems to signal an important change in his attitude.  Oracle may have accepted the inevitability of a growing shift toward the On Demand model. 

The court ruling regarding Ms. Olsen will likely not change two important things: The conflict between IBM and Oracle is nearly certain to grow in intensity; and the investment Oracle makes in providing On Demand services will continue to increase.

Oracle’s seemingly wholehearted embrace of open standards and the open source movement has always seemed a little strange.  Why would a leading developer of software for sale welcome without reservation the creation of free software by volunteers?  As I prepare my presentation on Understanding Oracle for the upcoming Quest Northeast conference I think I am beginning to get it.  Becoming a leader of the openness movement and fostering its continuing evolution was not done by Oracle for the benefit of mankind, it is simply very good for business. 

Oracle was founded in 1977 as a provider of add-on software – the first relational data base management system.  It became dependent on the emergence of de facto industry standards such as SQL.  The subsequent evolution of officially blessed standards through which software from different providers could work efficiently together was one of the reasons Oracle was able to become a market leader.  Those standards benefited all software vendors by making the entire market much larger than it otherwise would have been. 

When Linux popularized the concept of open source it was not clear if established vendors would fight or endorse this innovative new extension of the openness concept.  Oracle became and remains one of the leaders of that movement as well for reasons that on the surface may not seem obvious. 

Like open standards, open source also tends to expand the whole market.  At the same time, it can appear as if open source takes away sales from for-profit vendors selling the same category of products.  It would seem to make sense for such vendors to fight against open source incursions into markets in which they compete. 

Last year the European Union certainly bought into the idea that Oracle was likely to try to kill off the mySQL open source DBMS after acquiring it along with Sun.  Why would Oracle do anything to promote a free alternative to its most important cash cow offering?  The acquisition of Sun was held up for half a year in order to extract a promise that no such thing would happen. 

I am now convinced that the EU did not understand how Oracle thinks.  Open source efforts represent an opportunity for Oracle to increase its revenue and profits.  Oracle loves the idea that virtual communities of volunteers are willing to create sophisticated software on their own and offer it for free.  Such software fills niches that paid for products rarely address.  Having a no cost option also generates demand that would not otherwise exist. 

Oracle always saw mySQL as a source of incremental revenue, profit and market share and not as a meaningful threat to its other DBMS offerings.  In a similar way, the executives at BMW likely did not get too worried when Tata Motors decided to introduce a very low cost car in India.  Eventually, some of those buyers will be ready to move up in class. 

The real reason Oracle loves open source is that the volunteers that create it do not have the ability to support what they build – something that commercial users are willing to pay for.  Oracle understands that the profits from software do not come from selling it once but from developing a stream of maintenance revenue.  Open source reduces the cost, effort and risk of bringing new product to market while opening up a new opportunity for very high margin support services. In addition, there are always opportunities to surround the free open source code with add-on products that can be sold at a profit. 

I suspect that the only thing Larry Ellison does not like about open source is that someone else thought it up before he did.

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