“Oracle exits OpenWorld 2019 with a lot riding on Autonomous Database, Oracle Cloud conversions, services pivot - ZDNet” plus 1 more

Oracle exits OpenWorld 2019 with a lot riding on Autonomous Database, Oracle Cloud conversions, services pivot - ZDNet

Posted: 23 Sep 2019 03:00 AM PDT

Oracle's strategy revolves around popularizing its Autonomous Database, converting application and database customers to Oracle Cloud and using its own digital transformation as a case study for enterprises.

Divining Oracle's strategy following a week-long OpenWorld 2019 conference was easier said than done. There were multiple moving parts ranging from cloud infrastructure to applications to databases, a lot of CTO Larry Ellison quotes and quips and a skeptical group of analysts questioning the company's future. Oracle's OpenWorld conference came days after co-CEO Mark Hurd took a leave of absence for health reasons and a mixed quarterly report.

Exiting OpenWorld 2019, Oracle's strategy revolves around the following:

Grow its Autonomous Database franchise and move existing customers over to it. The benefits of automating security, updates, administration and patching are clear. What's unclear is whether enterprises will move well beyond pilots of the Autonomous Database to production. Another wild card is this: Oracle was popularized by database administrators and now the company is trying to automate them.
Move Oracle over to Oracle Cloud Infrastructure to highlight the efficiency gains as well as be its own reference client for further adoption. NetSuite moved to Oracle Cloud and Oracle plans to improve its own margins and financial profile by moving to it.
Migrate existing ERP and application customers to software as a service. In the end, Oracle is likely to be more of a software as a service provider than a broad cloud stack. Oracle is touting its SaaS wins, but appears to be positioning itself as a counterweight to Salesforce, which CTO Larry Ellison said is viewed as too pricey by customers.
Rebrand Oracle as a more customer friendly provider. The company has moved to evangelize its software more internally and hopes that move helps sales. The initiative is called Oracle@OracleExperience. Doug Kehring, Executive Vice President, said that the company wants to be "our No. 1 reference." "The mission of Oracle@Oracle is to educate not just external users like our customers but also our internal audiences both for awareness (and help illustrate) the benefits are that can be achieved by leveraging the Oracle Cloud," he said.

Add it up and CEO Safra Catz said Oracle is poised for revenue growth in the fiscal year ahead and this growth will be fueled by an integrated stack. In other words, Oracle is spinning the "suite always wins" mantra forward. Catz said:

Top cloud providers 2019: AWS, Microsoft Azure, Google Cloud; IBM makes hybrid move; Salesforce dominates SaaS

We are, without a doubt, the only company that can provide a fully-integrated stack, which is something we've been known for in the on-premise world. And now we can provide a secure, performant and enterprise-grade stack all the way from the infrastructure through the database with autonomous database to the applications and embedded AI in those applications and in the analytics.

The Autonomous Database plan

Oracle's most interesting product is its Autonomous Database, which promises to automate a lot of hours spent on administration, patching and security. To Ellison, Oracle's Autonomous Database is the headliner of the company as well as the secret weapon to fend off threats from cloud providers such as Amazon Web Services, Microsoft Azure, now an Oracle Cloud partner, and Google Cloud Platform as well as open source alternatives.

What's unclear is whether the market is moving away from premium database offerings to good enough alternatives. In Oracle's financial analyst meeting transcript, the word "autonomous" was said 73 times.

Juan Loaiza, executive vice president of Oracle's mission critical database technologies, said Autonomous Database could even recast the company's image. He said:

When we talk about autonomous database, we say the word database, but it's really the whole stack. Traditionally, customers built their whole thing. They bought servers, storage, network, OS, back-up, all that stuff, they put it together themselves. When a customer gets an autonomous database from us, they get the whole stack. So that increases our addressable market quite substantially. It's one thing.

Second, again, autonomous database is self-driving. That's nice. Oracle has not been known to be the easiest-to-use database in the world. That hasn't been our reputation. It's been known as the most mission-critical database in the world. Now actually, we're the simplest-to-use database in the world. That opens up new markets. So people like developers were scared to use Oracle before. Smaller businesses were scared to use Oracle before. Lines of businesses within companies were scared to use Oracle before. Data scientists were trying to do all this machine learning data science, were scared to use Oracle. Why? Because it was kind of complicated to use Oracle. Now with autonomous database, we're the -- we're literally the simplest database in the world.

Ellison said the Autonomous Database is one element of keeping customers on the database reservation. He also questioned whether customers were really leaving Oracle databases. He said:

People will just move off the Oracle Database. Really? No one's moved off the Oracle Database. Name somebody. Go on to Amazon's website, and I'll show you names of companies who moved up the Oracle Database, you've never heard of those companies. Bob and Sarah's Pie Shop and Towing Company. Biloxi, Mississippi. Bob deceased. Sarah is still available.

He added that Autonomous Database is pulling customers over. "We're seeing the Autonomous Database now of adoption rate beginning to spike. 500 new customers this past quarter, we'll have over 1,000 new customers in this quarter. It's now happening. Now it's happening. They'll take an existing data warehouse or a new data warehouse project, they'll move that over, they will -- they typically start slowly," said Ellison.

Analysts were skeptical about Oracle's database prospects and Autonomous Database uptake.

Stifel analyst Brad Reback said:

There is little question that Oracle's installed base is extremely secure, given the time, money, and operational risk of moving a legacy workload off of it. At the end of the day, there is no real ROI to that transition. However, as legacy workloads get replaced, we believe there are increasingly good alternatives to Oracle (hyperscale solutions, NoSQL, open source, etc.) and that the developer community (not many new SaaS apps are built on top of Oracle) and enterprise customers are increasingly moving in this direction.

Evercore ISI analyst Kirk Materne said the database upgrade cycle will take time. Materne said:

Oracle highlighted the ongoing innovation in the database such as AI/ML and a converged database. After speaking with some customers and partners, the question is how quickly can customers adopt this technology and at what cost? While it's hard to argue against the potential value associated with an autonomous database, we believe the shift towards autonomous and OCI within the Oracle customer base will take time.

Move to the cloud

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Ellison said that if Oracle can move its database customers to the cloud along with its application installed base, there's an argument that the company will be the biggest cloud player. Ellison maintained that the stock market wasn't valuing Oracle's cloud potential.

Ellison said:

We think we're going to get virtually all of the Oracle databases, which is most of the world's data. It sounds crazy, right? Because if Oracle really holds on to its database franchise and moves it to the cloud, I'll ask you, it is the most interesting question of the day, so how big is Oracle? If we hold on to our database franchise, think about all the applications that are built on top of Oracle databases. Remember, we were way bigger than IBM and Microsoft combined in the database business. Still are, still are. If that all moves to them cloud and we get it, how big are we?

Oracle internal applications will be on the Oracle Cloud, the company argued its second generation infrastructure is winning converts and the data center footprint is swelling. "We get a tremendous leverage in technology, things you see like machine learning and digital assistance or bots; and things you don't see, infrastructure updates, reliability, security going forward. The notion of technical debt in the Oracle Cloud has basically disappeared because we sit on top of that investment that we have going forward," said Ellison.

While Oracle talked about its infrastructure as a service, databases moving to the cloud and broader services, the main driver will be software as a service. Apps will drive Oracle forward, said analysts.

Oracle CEO Safra Catz said the company's move to its own cloud proves the point that its offerings are industrial strength. Ellison added that its infrastructure cloud will ultimately give its applications an edge over Salesforce, Workday, SAP and other competitors.

And yes, Ellison is still a wee bit obsessed with AWS, which has said it moved from Oracle to AWS. Ellison said:

Listen, AWS is the first mover. They have the idea, the rent -- to go ahead and rent computers. It was brilliant, and it's been enormously successful, and it's really -- they fundamentally have changed computing, but they really -- I mean they don't develop databases. They don't develop programming languages. We develop Java. We develop the Oracle Database. We develop Fusion applications. They don't do anything like that.

Analysts aren't yet sharing Oracle's enthusiasm for its cloud broadly speaking. However, Oppenheimer analyst Brian Schwartz said growth of the SaaS business is critical to everything else.

We left impressed with the look, capabilities and integration of Oracle's SaaS applications and next-gen cloud infrastructure. To improve sentiment, we believe Oracle needs its SaaS business to grow faster. This development would convince investors that its database customers will migrate workloads and grow with Oracle since its enterprise SaaS business can pull through infrastructure demand.

Oracle@Oracle

Kehring, a 20-year veteran at Oracle, outlined how the company has retooled its business processes to take advantage of cloud computing. His talk at Oracle's analyst meeting highlighted the following points:

Oracle is moving from a product and licensing company to one that revolves around services and subscriptions.

The company has largely moved its internal applications all to Oracle's Cloud. We're sort of at that point of no return where we are nearly 100% having moved all of our applications to the cloud across ERP, supply chain, HCM, CX and EPM. It's all up and running inside Oracle. It is the platform that's powering these new business processes," said Kehring.

Oracle is aiming to tell its own story internally as well as to customers. The catch is that Oracle will need some time to change its image with customers. TechRepublic: How to avoid getting sued in your Oracle-to-the-cloud migration

Kehring explained:

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We realized we're in a great position to share our story. We've always believed that we should, at Oracle, use our own technologies. And obviously, we've done that throughout our history. But more than that, we want to be our #1 reference. We want to be the best customer inside Oracle. We adopt first so that we can learn. We can learn and we can help the development team continuously improve. But the reality is our customers are demanding to understand, hey, how do you do it well? How do you do it effectively? How -- give me some insight into how this works, and that led to the Oracle@Oracle Experience.

Much of the Oracle@Oracle effort revolves around content that can evangelize Oracle Cloud to the sales field as well as customers to outline the returns such as efficiency, faster decision-making and the ability to be agile vs. the competition. Oracle's Kehring said the plan is to take Oracle@Oracle on the road beyond OpenWorld to open a dialogue with customers.

In a nutshell, Oracle@Oracle is part of a new branding effort for the company. At OpenWorld, Oracle tried out some branding with just an "O" and there was less red everywhere. Yes, Oracle was front and center, but less in your face about it.

Catz outlined why a new brand spin was necessary.

We feel that natural colors and -- seriously, natural colors sort of are much more approachable. Because the reality is, we have to move from just a product company to a service company. And when you're a service company, you have to have a much more approachable feel to you. And so we've really internalized that in every way.

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Posted: 22 Sep 2019 12:39 PM PDT

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Cloud artiicle 14

Monday, September 23, 2019