February, 2009

Recession or no, the high seas still call to Ellison and his yachts

The recession — which, unfortunately, includes the need to downsize — has been on everyone’s minds these days. So, while Oracle professionals scramble to cut hardware costs and keep their jobs, what about the man who’s in charge of it all?

Oracle CEO Larry Ellison made plans to downsize before the recession even began — though not quite in the same way or for the same reasons.

Ellison supposedly has a new yacht in production that is set to be finished sometime after 2010. But why does the billionaire, who already owns a 454-foot, five-story, 82-room yacht (called the Rising Sun) need another one?

According to Ellison, the Rising Sun is impractical, too big, and “lacks intimate space.”

“Too big” may be an understatement. While on a recent cruise, SearchSAP.com News Editor Courtney Bjorlin saw the Rising Sun for herself, when the boat was docked on the island of St. Thomas. This is the picture she took:

As you can see, this is one of the largest yachts in the world. But it’s also not Ellison’s first. Oracle’s CEO has been in the yacht business for quite some time, and consequently has some interesting stories. Here are a couple:

• Ellison has claimed that SAP co-founder Hasso Plattner mooned him and his crew during the 1996 Kenwood Cup off Hawaii. Plattner went on the record in Sailing World in 2003, saying he “never mooned Larry Ellison.” However, even though he says the act wasn’t direct at Ellison specifically, he did admit that he “lowered his pants” when his boat was having serious trouble and Ellison’s boat, the 80-foot Sayonara, failed to help.
• In 1998, Ellison had a near-death experience on the Sayonara. During the 1998 Sydney to Hobart Yacht Race in Australia, a typhoon struck, bringing 40-foot high waves. Six sailors from other boats died, but the Sayonara crew managed nothing worse than broken bones. Ellison told Business Week they “certainly thought it was possible we wouldn’t make it.” But Sayonara did more than “make it” — it won the race.

Despite the recession and its subsequent layoffs, it still appears difficult to be a billionaire playboy.

Oracle’s public sector push: Is it enough?

With all the attention toward Oracle’s investment in smaller retail and manufacturing businesses, sometimes it can be easy to forget about the software giant’s market share in its largest industry — the public sector. But with government funding in the limelight now, it seems particularly interesting to consider how technology vendors cater to the organizations that affect our everyday lives.

According to Oracle, over 1,500 public sector organizations run Oracle applications. And as of Monday, these organizations have another application to add to their list of options.

Oracle’s new version of Oracle BI Applications have features that will help public sector agencies manage funds and monitor budget spending – a popular topic of conversation these days, to say the least. The software includes ETL maps and pre-built integration with E-Business Suite’s Oracle Financials and pre-built dashboards and reports especially for the public sector.

But how does Oracle’s quantity of public sector applications compare to its quality?

The last time we took a close look at Oracle’s public sector offerings, we found that it faced tough competition from smaller, more specialized companies. Forrester analyst Ray Wang said that Oracle “takes a broader approach in terms of functionality” and has a goal to “up-sell those public sector database users on PeopleSoft and E-Business Suite applications.”

However, Oracle acquired one of those smaller, more specialized companies this past October. It purchased software-maker Haley Ltd to push itself into another aspect of the public sector — social services.

In its press release, Oracle said: “By acquiring Haley, Oracle is accelerating its investment in public sector to create an integrated solution, and bring faster time to value for our customers.”

While the software giant has faced public sector competition from smaller companies, what about the competition with its rival, SAP?

Even three years ago — when Oracle purchased a utilities industry-focused software firm — the two companies were battling for public sector supremacy. And SAP has definitely had its share of success in the industry. The IT manager of the County of Sacramento, which was the first government to use SAP (and still is), recently said that “SAP has transformed our business processes over the past 10 years.”

If you work in the public sector, what do you think of Oracle’s offerings? How could they improve? What made you chose Oracle, and what other companies did you consider for your IT needs? Will you purchase Oracle’s latest BI application?

Recession a good time to spend on risk management, Oracle says

Over recent months, U.S. banks and financial institutions have been exhausted of funds, faced with toxic assets and tremendous debt, and blamed for this seemingly insurmountable current economic crisis.

But this may be good news for Oracle.

We’ve already seen how the down economy has opened for doors for Oracle in terms of software-as-a-service (SaaS) and acquisitions, and now it seems like domination of another market — risk management — is in the software giant’s reach.

Following in SAP’s footsteps, Oracle announced Tuesday the release of two new risk management applications, Oracle Reveleus ICAAP Analytics and Oracle Reveleus ICAAP Assessments. According to Oracle’s press release, these tools will “help financial institutions comply with the Internal Capital Adequacy Assessment Process (ICAAP) requirements.”

According to S. Ramakrishnan, CEO of Oracle’s Reveleus and Mantas financial software units, the new applications will provide institutions with a “holistic, enterprise-wide view of risk and capital management while simultaneously helping to achieve mandated regulatory compliance.”

Oracle Reveleus ICAAP capabilities include capital planning, risk assessment and monitoring, and pre-configured and integrated economic capital models for credit, market and operational risks.

But do banks really want to spend on new technology when in so much debt?

This may be a special case where the answer is yes, at least according to Oracle executives. In the Insurance Networking News article, Ramakrishnan says that risk management is critical for survival in the market’s current state. Others also point out that banks are facing pressure from outside sources — such as shareholders, investors, boards and examiners — and risk management applications are necessary in providing these sources with the information they demand.

Oracle also has its own reasons for spending in a tough economy. ZDNet blogger Brian Sommer discusses a recent Oracle show he attended where the keynote speaker made a case for IT spending in a recession. However, Somner was wary of some of the speaker’s main points, such as how cutting an IT budget can have a small effect on a company’s total revenue, and investing during a recession can mean having an advantage when the recession is over.

Somner had another idea in mind:

“What I was really hoping for was that Oracle would have announced a different strategy for coping with a (big) recession: lower cost solutions from Oracle.”

Welcome to our new blog location on IT Knowledge Exchange

I’d like to take a moment to introduce you to some of our new blog features and also some of the features on IT Knowledge Exchange.

Instead of a long list of categories, we now have a Tag Cloud. Click any topic in the Tag Cloud and you’ll see only posts on that topic. The Tag Cloud is dynamic, so the more a tag is used, the larger and darker it will appear. This helps you quickly see the most popular topics.

You’ll also notice we’ve integrated more of our related editorial content in the right sidebar. If you’re on a post about a specific topic and wish to know more after reading the post, be sure to browse the links in the right sidebar.

We always appreciate your sharing our content on social networking sites and we’ve increased the number of bookmarking tools from four to forty-three. If you enjoy a post, please be sure to share it with friends and colleagues.

Look near the top of the page and you’ll see a row of tabs. You can click the IT Blogs tab to find dozens of technology blogs, both user-generated and TechTarget editorial blogs. You can even request your own blog and start sharing your expertise with your peers.

There is also a tab labeled IT Answers. This is where you can ask your own IT question and have it seen by thousands of IT Knowledge Exchange members. So be sure to pose your own Oracle question, browse thousands of Oracle answers or help out a fellow IT pro by answering a question.

Thank you for stopping by and be sure to bookmark our new blog location and visit the Oracle section on IT Knowledge Exchange.

Should Oracle negotiate its nonnegotiable maintenance fee?

Oracle software purchases carry with them a host of options and choices for buyers — cloud computing and SaaS, choosing between multiple applications that serve the same purpose, and a never-ending list of updates and upgrades. 

There is, however, one thing that never changes.

That is Oracle’s 22% annual maintenance fee, a nonnegotiable fee that Oracle president Charles Phillips describes the company as being “sticklers” on in this Information Week article.

But is it time for Oracle to rethink its policy?

That’s what some experts are thinking, especially as the economy continues to fall and more organizations are trying to save money and  turning to third-party support.  One such expert is Information Week’s Bob Evans, who wrote an “open letter” to Oracle CEO Larry Ellison explaining why Oracle needs to change its ways. 

Evans made some interesting points in his plea to Ellison. First, he says that even if Oracle doesn’t change the fee structure, it should at least change its name, since Oracle has admitted that the fees are actually used for product development rather than maintenance. 

He also asks Ellison to move away from his traditional, rigid maintenance fee system in these changing times — because if not, it will hurt Oracle in the future:

“The longer you dig in and tell CIOs that you’re not interested in the wicked expense challenges they’re facing, the longer they’re going to remember that when the current recessionary climate fades and new alternatives gain strength,” Evans writes.

At such a high price, how does Oracle maintenance even rate among its customers? One user quoted in the Information Week article, the CIO of Santa Fe Natural Tobacco, complains of poor and slow service from Oracle’s global support center. But just a couple of months ago, Oracle support received high marks in a UK Oracle Users Group survey.

Oracle isn’t the only company with high maintenance fees. SAP recently announced that it will increase the fees for SAP Basic Support customers — who currently pay 17% of net licensing fees – to 22% by 2012, right in line with Oracle. But according to Forrester analyst Ray Wang, with SAP you’ll actually be getting more when paying more, unlike its competitors.

Are you getting what you pay for from Oracle maintenance fees?