All well and good and worthy of discussion. But here are the real questions coming out of the show.

1: Can the appeal of Oracle’s technology overcome customer FUD?

The issue of technology audits was an undercurrent throughout the show. Oracle, like any software company, audits customers. But it gets negative style points in how it does so.

In a quick meeting in front of the Iron Men at Oracle Openworld, a systems integrator and an IT pro with long experience in Sun shops, said they’re seeing more and more audits in Sun hardware accounts, and much heavier-handed ones than in the past.

Audits have ramped up since Oracle completed its acquisition of Sun and the new wrinkle is that customers updating Sun machines running Oracle apps are now, within days of dealing with the hardware sales force, being hit up by Oracle software sales. The message tends to be: You have to buy more software licenses for your new hardware. One customer was told he needed to buy more Oracle database licenses for the apps he already had as he moved them to new hardware. That was not true. His apps had the requisite database power to stay legal. Hey, guess it doesnt hurt to ask.

2: How long will the Hurd-Catz duality last?

Ellison is famous for burning through number two execs. Charles Phillips (or “the fallen”  as Marc Benioff referred to him)   lasted a very impressive  seven years. Safra Catz has been there longer.

On paper, Mark Hurd compliments Ellison well: He’s an operations-and-logistics guy. Ellison is a strategy guy who parachutes in for the odd (and long) keynote or the multi-billion-dollar acquisition. Only thing is that Catz, like Hurd,  is also a logician who makes the trains run on time. Oracle is a big company but is it big enough for both these powerhouses? This could get interesting.

3:Will Oracle Exadata/Exalogic signal a return to the mainframe mentality?

Whatever Larry Ellison says, this whole notion of software-and-hardware-designed to work together is a very old notion. Sometimes he even acknowledges the debt Oracle owes the old IBM.  To some extent the whole argument of whether Exalogic represents a cloud in a box is beside the point. Sure Exalogic can power a cloud. How much would Ellison love it if AWS powered its cloud on Exalogic instead of zillions of Intel servers?

This is just a return to the age-old big iron vs. distributed computing battle and it’s unclear that folks are really hankering for a return to that big and very expensive iron. Especially when they see the maintenance-and-support costs involved.

Ellison also ripped multi-tenancy as an “old” technology and touted virtualization as the key to true cloudiness. Um, as one colleague noted: “Multitenancy may be 15 years old, but virtualization is FIFTY years old!”

4: Can Oracle curb its impulse to monetize at all costs?

When Oracle raised support prices on Sun hardware, Sun customers were outraged. They’d gotten used to a pretty good thing. The independent Sun Microsystems, as it struggled, was easy peasy when it came to enforcing support policies. Flexibility was the word of the day. Customers and Sun VARs decried Oracle as greedy. But, one naysayer countered: “Is it greed or is it just fair?”

Given that the support clock starts ticking as the Sun-Oracle hardware leaves the loading dock — so customers pay for hardware they don’t even have in house – it’s easy to call it greed.

The costs don’t end with delivery and installation however. Simply moving existing Sun hardware to another data center turns out to be very pricey as well. One company that specializes in data center moves said Oracle quoted a price to unplug and re-certify Sun servers at what amounted to be $6,000 to $8,000 per hour.

5: Can Oracle salve hurt feelings over Java?

Folks in the Java One fold were none too happy to be jettisoned from their usual Moscone haunts to the hotel hinterland this week.  And, they wanted to know what happened to the Ellison-and-Thomas Kurian session they’d been promised. They’re already irked that Oracle let James Gosling take his ball and go home. And some (though not all) are miffed about the lawsuit Oracle filed vs. Google.

6: What happened to Ellison un-plugged?

In past OpenWorlds, the best part was the audience Q&A with Ellison. It’s been gone for a few years now and the show is diminished as a result. Sure, corporate message mongers like it that Ellison is more scripted now–one year he “announced” a price change that, apparently, no one else knew about.  Truthfully, I can’t even remember if the price change ever happened but things like that differentiated the show and is why it’s time to bring Ellison unplugged back.

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 The Salesforce.com CEO was clearly aware that he and his company had been a punching bag for Oracle CEO Ellison at the Oracle OpenWorld 010 keynote Sunday night.  There Ellison painted Salesforce.com as a faux cloud player and even took shots at Benioff’s book “Behind The Cloud.”

Walking into his own OOW event Wednesday, Benioff said: “You can say what you want about me, but leave my book alone. It’s not hurting anyone.”

Asked if he’d character Ellison’s new Exalogic super-server as “cloud in a box” as Ellison had, Benioff scoffed: “You tell me! It’s a BOX!”

Benioff said it’s an honor to be targeted. “You pay extra to be insulted ,” he noted.

During his public remarks, which featured Michael Dell, Benioff returned again and again to the notion of a “big, gigantic box, taller than me” painted with big Xs saying “keep out!”

He asked Michael Dell if he built big computers like that, “bigger than me,” and Dell said yes. 

He quoted a twitter post by Amazon.com CTO Werner Vogels who apparently doesn’t see Oracle Exalogic as cloud-like in the least: “If you need to buy a big box to get started, it’s not cloud,”  Vogels apparently tweeted.

“You don’t have to build software and hardware together because they are togehter. I don’t really understand that,” he said. Oracle’s new too-long mantra is something about software and hardware engineered to work together.

No one gives a better come-to-Jesus keynote better than Benioff.  And, while he always draws a crowd, it’s fair to say that thanks to Ellison’s Salesforce.com bashing, interest in his counter-Oracle programming today got a big boost.

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For Oracle and Sun channel partners, here are the top line items out of the big event.:

 1: Tick tock: Sun VARs face deadline.

They have till October 15 to map their Sun Partner Advantage (SPA) designation into the Oracle PartnerNetwork (OPN). Of course they’ve known that for quite some time. And many Sun VARs, especially those who’ve seen their Sun hardware renewal business taken direct, have been thinking long and hard about this. Several have moved more of their hardware business to IBM and/or Hewlett-Packard or Dell.

Tom Wagner, the former Sun channel guy who is now group vice president of North American alliances and channel sales for Oracle, said he understands the pushback. “It’s natural for partners to hedge. I have no problem with VARs who have a line card with Oracle and IBM and NetApp.”

2: Hardware-only VARs better gear up.

Especially if they want to play in the  big-boy Exadata or Exalogic business.

“For pure-play hardware VARs, here’s probably not a ton of opportunity here for you,” said Judson Althoff, senior vice president of worldwide channels.

On the other hand, VARs with expertise in  database, RAC, and Linux should do well working with customers to best fine tune those appliances, he said.

Oracle VARs could make hay selling such slick components as solid-state flash storage into existing Sun hardware accounts, Altoff said.  Flash drives are a big piece of he storage picture in the upcoming Exalogic appliance.

3: Exalogic: When is an appliance not an appliance?

There was a lot of talk about the Exalogic appliance, but for an appliance it has a whole lotta variables.

Hardware and software will be priced (and discounted for resellers) separately.  The $1,075,000 price quoted in Larry Ellison’s keynote is hardware-only price for a full-rack Exalogic. The assorted WebLogic Suite software and specialized “Exalogic Elastic Cloud” software are additional. Existing software licenses at the customer shop will also have to be factored in, he said.

4: Oracle pays more for PRM deals

Partners had to be “persuaded” to register their deals in Oracle’s system and so it’s paying them more margin to do so, said Ted Bereswill, senior vice president of north american channels.

The PRM system was notorious among many partners who felt that the surest way to lose a “net new” deal to Oracle was to tell Oracle about it. Starting with the fiscal year on July 1, Oracle started paying partners an additional 3% margin on any new deal they “PRM’d” and then closed.  If that deal was done by a partner with a Fusion or Exadata specialization, there was an additional 2%.

A third of all indirect sales of Oracle technology (databases and middleware) were PRM’d last year and the goal is to get to 50% in FY 2011, Bereswill said.

5: Beware of pretty numbers.

Oracle likes to tout that some 40% of its revenue comes via indirect channels. The problem with that number is it doesn’t really mean channel sales, it covers deals where a channel “influence” can be attributed.

6: New Diamond OPN designation for tippy-top partners

If you’re a huge Oracle partner with lots of employees, there’s a new “Diamond” tier within the OPN ranks. . 

The Diamond level requires the partner to log at least $40 million in Oracle co-sell and resell revenue per year across three or more Oracle regions.  Accenture and InfoSys have already garnered Diamond status, Althoff said.  They must also  have 30 specializations, five of which have to be the advanced level. And they must field at least 50 implementation specialists.

Oracle rolled out its new OPN program, with its  remarketer, silver, gold and platinum tiers, last year. Ten percent of Oracle’s partners have  achieved platinum status, Althoff said on Sunday.

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 HP announced the settlement, but not the terms, today. Speculation is that Hurd will return a good chunk of the severance HP paid him.

Hurd was ousted by HP on August 6 and hired by Oracle on September 7. And from there things really got nasty. HP sued Hurd; Ellison took HP to task for that. And, given that HP is a traditional huge sponsor of Oracle OpenWorld and that Hurd had been slated to speak at Oracle OpenWorld as top-HP dog, everyone was waiting for the show.

When Hurd greeted Oracle/Sun partners on Sunday afternoon, one VAR whispered that he could not believe Oracle hired him, given the circumstances of his embarrassing exit from HP. “See what sexual harassement gets you,” he sniped.  But another commentator said Ellison–who always enjoys a good public rumble–probably hired Hurd mostly to tweak HP.

On Monday, HP also “reaffirmed” its partnership with Oracle. The two IT powers share some 140,000 joint customers. And HP, don’t forget, was the original hardware partner when Oracle launched the firest Exadata two years ago. Last year, HP’s gear was supplanted by Sun-labelled hardware (albeit not any running Sparc and Solaris) for Exadata 2.  Awkward!!

The Hurd drama lent an odd tension to last night’s Oracle OpenWorld 2010 keynotes by HP executive vice presidents Ann Livermore and Dave Donatelli. 

Both stressed the ability of HP’s converged data center hardware to boost application performance and productivity. Minutes later Oracle CEO Larry Ellison came out to flog the hell out of Exalogic, the latest Oracle data center appliance. What will Exalogic do when it shows up? It will consolidate applications and boost he heck out of their performance.

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Oracle CEO Larry Ellison touted the new converged hardware in dozens of slides claiming the system will do for application servers what Exadata did for databases–soup them up and make them scream. Pricing and availability information was not forthcoming but Ellison said an Exalogic machine costing $1,075,000 would have 40% more CPU capacity than a $4.4 million  IBM Power 795 server.

Many claims flowed:  Exalogic would enable companies to build private clouds within their firewalls and those “big honking clouds” would run an industry standard software stack. Except of course, when it’s not all that industry standard. Oracle now plans to maintain two Linux kernels. The existing Red Hat compatible kernel as well as the new-and-improved  Oracle Unbreakable Enterprise Linux kernel.

Exalogic will also come with two guest OSes–Linux (one of the above, I guess) and Solaris. Users can run one or both in any combination. It  will run Oracle VM.

It will pack 30 servers, an Infiniband internal network linking the servers, high-availability storage and “all the middleware needed.”

Each server comprises two six-core processors for a total of 360 cores. What processor, you might ask? Excellent question and Ellison didn’t say. Not once did he mention that the machine would run 64-bit X86 processors as pointed out in the Exalogic press release. 

Expectations were that Oracle would announce SPARC-based data center appliances at the show. Ellison volunteered that Mark Hurd and John Fowler tomorrow  will unveil new eight-socket machines, with two TB of DRAM and 4096 CPUs. SPARC or Intel? Your guess is as good as any.

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Stay tuned to find out what Exalogic is and what’s up with the knights? (Update: Oops! They’re not knights but Iron Men.)

(Update again: More on Exalogic here and here.)

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Specialize and sell more of Oracle’s stuff, er stack.

Oracle’s increasinlgy diverse portfolio–which now includes Sun Microsystems hardware–”is a large, big tremendous opportunity for cross-sell, upsell,” Hurd said. There’s “so much in the basket to bring to market.”

Oh, and specialization is key. Even with 100,000 employees, Oracle does not have the horsepower to build all the solutions customers need, he said.

“We want the channel to do things we don’t. Adding unique solution value, calling on incremental market we don’t call on…it’s all about growth and adding things we don’t have in our basket,” he said

Hurd was introduced to several hundred Oracle and Sun partners by north american channel chief Judson Althoff on day one of Oracle OpenWorld 2010 here.

Services are also key. “The services line in the P&L is flat and that’s strategic, not an accident. We want you to wrap your services around our partners.”

Services will be the VARs greatest source of profitability he siad. “I think there will be adaptations in the services market…[an] opportunity for you to deliver solutions, to engage with the entire stack that we’re bringing to market and when you do that you’ll find a really supportive Oracle.”

Sun VARs were eager to hear what Hurd had to say coming into the show, but also wary. They have seen Oracle compete more with them for legacy Sun hardware accounts and several are angry that Oracle is taking more Sun hardware renewal business direct. Both Sun and Oracle VARs are anxious that the “sell more of the stack” message will mean that they will increasingly compete with each other for the same deals.

This was Hurd’s second public appearance at an Oracle event in a week. He was featured on Oracle’s first quarter earnings call last Thursday.

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1: Hurd’s aboard
Mark Hurd was there in spades, talking about Oracle’s innovation, its huge R&D budget etc etc. That must have galled the HP partisans who say he gutted that company’s storied R&D machine. Hurd was CEO of Hewlett-Packard until August 6 and was named co-president of Oracle on September 7, setting some sort of land-speed record. One has to assume his severance check cleared.

2: Sun hardware will be profitable, dammit
Oracle co-prez Safra Catz and Ellison both stressed that the company has no qualms about jettisoning non-profitable hardware business to concentrate on higher-margin, pricy “engineered systems” a la Exadata. But, maybe one reason Oracle’s field is so busy extracting fat support and renewal fees on older “commodity” hardware is to transform unprofitable hardware to profitable hardware.

Oracle execs said the company sold three Exadatas to SoftBank, replacing 60 Teradata boxes.

3: Oracle OpenWorld will be a Fusion affair

Ellison told analysts that Oracle OpenWorld 2010 will highlight the much-anticipated and much-delayed Fusion applications. “We’ll announce our Fusion application suite, all the CRM, ERP products, 100% written in Java with social networking, Web 2.0 interfaces” at the big show, Ellison said.

4: Love/hate affair with IBM continues

But maybe with a little more love now. Ellison thanked IBM chairman Sam Palmisano for calling Oracle his number one competitor and said Oracle would like to expand its working relationship with IBM’s gigantic services business going forward. He mentioned IBM’s ability to make “amazing” microprocessors. When Oracle completed the Sun buyout, Ellison said he viewed the IBM of the 1960s as an icon to emulate.

A conspiracy theorist might even say it looked like Oracle might like to cosy up to IBM in order to squash HP–which bills itself as the largest IT provider in the world.  And which is also, btw, suing Hurd for joining Oracle.

5: Hurd hates services

Interesting to hear what a stupid business IT services has become.  Hurd pushed Oracle’s “engineered systems” vision hard as a way to stay out of the sticky services business.

“When you run a big services company, the biggest issue is labor. Incidents need people and the way to automate incidents is through software. When you automate a process, you not only reduce labor but eliminate labor,” Hurd said. “[If you can] build something once and sell it many, many times and do that work in a remote and in an automated way that’s a replacement for labor-based services.”

Those are fascinating words from the guy who engineered HPs $12.6 billion dollar acquisition of Electronic Data Services (EDS) two years ago.

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