SAP has had no problem criticizing Oracle’s growth strategy for favoring acquisition over innovation. However, we recently questioned whether that opinion would change with two new SAP CEOs in the picture. Co-CEO Bill McDermott, who along with Jim Hagemann Snabe has promised a faster turnaround in new SAP products, was recently quoted as saying, “If an acquisition made sense, we would not shy away from it.”
SAP announced Wednesday a $5.8 billion deal to buy software maker Sybase, emphasizing its ability to help SAP in the mobile applications market. But is this an acquisition that makes sense?
Some analysts and investors have doubts about the steep price, and others are waiting to see how well SAP will actually take advantage of the database and mobile opportunities this acquisition could provide.
While SAP is stressing the importance of the acquisition for its place in the mobile market, there’s also the idea of being able to compete with Oracle. Currently, SAP runs many instances on Oracle databases, but now, as blogger Joe Kendrick puts it, “SAP becomes Oracle East,” with the ability to offer a ERP-middleware-database-development tools stack.
ZDNet’s Larry Dignan also examines SAP’s plan to compete with Oracle, and wonders if this is just the beginning of a long string of acquisitions.
“It has been suggested by a few observers that the Sybase acquisition has a heavy component of SAP chairman Hasso Plattner’s urge to stick it to Oracle. For better or worse, SAP is now in the database business.”
Ellison was once quoted as saying that “others would be foolish not to try” Oracle’s aggressive acquisition approach. But would he still say the same thing now?
Reuters posted a lengthy and detailed story on Oracle and Larry Ellison today. As usual, whenever someone talks to Ellison, there is plenty of dirt. In this story, Ellison dishes on former Sun CEO Jonathan Schwartz, basically saying he wasn’t a good CEO, and forecasts the future of Oracle hardware.
Ellison criticizes Schwartz at length in the story, saying he spent too much time on his blog and not enough time managing the company correctly.
“The underlying engineering teams are so good, but the direction they got was so astonishingly bad that even they couldn’t succeed,” Ellison told Reuters. “Really great blogs do not take the place of great microprocessors. Great blogs do not replace great software. Lots and lots of blogs does not replace lots and lots of sales.”
Ellison added that the sales deals Sun made — and the commission structure around them — were often nonsensical. In some cases, Sun would lose $1 million on a deal. And the salespeople were making commission on the size of the deal, rather than the size of the profit.
This, of course, is no surprise to any Oracle watchers. Oracle has always been about extracting big profit margins whenever and wherever it can. That explains the reason why Ellison and Oracle are pushing Exadata and Sun’s Sparc-based servers over commodity x86. It makes more money, even in a declining Unix market.
Ellison details why Oracle dropped Sun’s “Rock” processor, a yearslong project that encountered multiple delays and never got off the ground. According to Ellison, it ran too slow and ran too hot, and was basically a time and money sink.
“It was so hot that they had to put about 12 inches of cooling fans on top of it to cool the processor,” Ellison told Reuters. “It was just madness to continue that project.”
Ellison said Oracle would be “pruning” down its x86 server line and will continue to push its stack strategy hard. It plans to unveil more Exadata-like products this fall at Oracle, including one that includes the yet-to-be-released new group of Fusion applications. It already announced Exadata 2 last year, a Sparc-based box built for data warehousing and OLTP. Whether it succeeds is a question, as it only sold about 20 of its previous HP-based Exadata appliance.
The Nashua Telegraph newspaper has an interesting story today about a mother and son who went to a local college and got their master’s degree in business administration (MBA). In part, Nancy Quinn and Keith Bellew did it to avoid getting fired from Sun Microsystems once Oracle acquired it.
The two live in New Hampshire and commuted daily down to Burlington, Mass., where Sun Microsystems has a big lab. When Sun was acquired by Oracle, the layoffs started coming in and the mother-son team got worried. Fortunately, they had already started taking classes in an accelerated master’s program at Rivier College in Nashua, N.H. Everything took its toll, as they had to commute about an hour to work each day, then take classes when they could, and then study every night. Quinn suffered some stress-related ailments.
Adding to the stress on both Quinn and Bellew were worries about their jobs, especially after one man in their class was laid off from their company.
Quinn is a principal project manager at Sun Microsystems, and she and her son hope their graduate degrees give them more security in an insecure industry. Sun Microsystems was bought out by Oracle Corp. recently, and for each of the past three years, the company has seen layoffs of 1,000 people a year. Still, the company paid for their programs.
The master’s degree “is just something to add to my box of tools,” says Bellew, who is 33 and a senior software engineer.
Back in January during Oracle’s announcement of its Sun acquisition, Larry Ellison disputed claims that about half of Sun’s staff – more than 10,000 employees – would be fired once the acquisition was complete. Instead, he said Oracle would fire 1,000 employees in the next few months but hire 2,000 to boost up its businesses. Still, this story gives a good sense of the anxiety felt among employees during an acquisition such as the Oracle-Sun deal.
While we now know that Oracle’s planned data center in Utah is not a home for aliens, Oracle never publicly announced why the center was put on hold over a year ago. The software giant has revealed that “Project Sequoia” would focus on the latest advances in virtualization, Linux and grid computing to power products like Oracle On Demand. No surprise there.
But now, after the approval of Oracle’s $7.4 billion acquisition of Sun, construction of the 240,000-square-foot, $285 million data center is back on, an Oracle spokeswoman said last week. Many have speculated that Oracle suspended construction of the data center when making the decision to buy Sun Microsystems, which has its own data centers, including one in Colorado.
Since the building of the facility has resumed, what does that mean for Oracle?
IDG’s Chris Kanaracus calls the resumption “a telling indicator of the scope of Oracle’s plans for on-demand software.” While Oracle only currently has a limited number of on-demand and Software-as-a-Service (SaaS) applications, its offerings will greatly expand with the release of its Fusion applications this year.
If the release of Fusion applications stays on track, that is. Delivery of the next generation applications has been long-awaited, and many users are wondering when it will actually occur. At the recent Collaborate user conference in Last Vegas, one Oracle customer was quoted as saying: “When you mention the word Fusion at my company, there’s laughter in the room. Hopefully, the time they’re taking means they’re being prudent.”
There is much to be prudent about with Fusion apps, however, As Kanaracus points out, many Oracle users are on legacy applications such as Siebel and PeopleSoft and don’t want to switch over to Fusion, at least not right away. In an attempt not to alienate these users, Oracle can use SaaS to allow these customers to “consume Fusion a little at a time.”
It should be interesting to see how long it takes to build the data center – and finally deliver Fusion applications – as the year goes on. Do you have any big plans for SaaS or on-demand software? How will this affect them?
By Mark Fontecchio
LAS VEGAS – The U.S. Air Force is on the verge of deploying a small part of a new combat support system. Supported by Oracle EBS and OBIEE, the system is meant to streamline supply chain logistics for, among other things, fighter pilots engaging in combat overseas.
“A fighter pilot is merely like a truck driver delivering a package to someone who doesn’t want it but they’re going to receive it anyway,” Steven W. Pavick, a senior systems engineer, said.
The July 6 unveiling will provide tools management for combat vehicles, though Pavick didn’t go into many specifics. Called the U.S. Air Force Expeditionary Combat Support System, it will be implemented at Hanscom Air Force Base in the northwest suburbs of Boston, and according to Pavick, will demonstrate capabilities the Air Force wants to implement across the entire project.
The project’s goal is to eliminate legacy systems, providing ERP, advanced planning and scheduling products for the Air Force’s combat support system program.
Pavick explained that the infrastructure behind such a project, though not as glamorous as piloting fighter planes, is nonetheless important. To that end, the Air Force Logistics Transformation Office is tapping Oracle E-Business Suite and Oracle Business Intelligence Suite Enterprise Edition to run the operations. Those products will help the Air Force manage all the data that goes into the delivery of such a “package,” whether that be documenting maintenance actions, receiving the shipment, placing the order, or replacing a part.
The choice of Oracle drew some criticism back when the Air Force awarded the bid more than four years ago, with SAP protesting that the bid was awarded unfairly. That protest went nowhere, however.
Pavick is attending the Oracle Collaborate conference in Las Vegas this week, and I was able to catch up with him following a keynote Tuesday morning about information governance given by a couple IBM execs. Pavick wasn’t impressed with the session, saying it was a “sales pitch” that wasn’t his “ball of wax.”
“We already have our own consultants,” he said. “We don’t need any more consulting services.”
When you think about security, is protecting the privacy of your customers and the security of your data at the top of your list of concerns?
You might be quick to answer yes, but CTO Ron Ben Natan said in his session at the Collaborate ’10 conference on Monday that for most people, compliance is usually the bigger worry — not whether your data is protected, but whether or not you’re going to pass your audit.
But to stay compliant, one must understand the many aspects of Oracle 10g and 11g security, a topic which Ben Natan of Guardium discussed with the approximately 20 people in attendance. He talked about the long process of securing your Oracle data — including hardening, assessing, classifying, monitoring, auditing, enforcing and encrypting — and offered tips for making it through each of these steps successfully.
This process is different for Oracle databases compared to Oracle applications, Ben Natan said. He pointed out that it’s much more difficult to know all of the user privileges and entitlements in an Oracle database environment, thus making the database more vulnerable to breaches involving the “unknown factor.”
What’s the “unknown factor”?
According to Ben Natan, nine out of 10 breaches involve:
- A system unknown to the organization
- A system storing data that the organization did not know existed
- A system that had unknown network connections
- A system that had unknown accounts or privileges
Oracle also has a highly complex privilege model, he said. Privileges grant users the right to run a specific type of SQL statement or perform a certain database operations. These privileges are grouped into user roles, and the high number of roles Oracle has can make it difficult to keep track. However, Oracle 11g only has 30 roles, compared to the 120 that were in 10g.
But some of these privileges, especially system privileges, of which Oracle has over 100, are very risky. Nearly any system privilege can be used by an attacker to assume DBA privileges, Ben Natan said. Oracle even notes this in its own documentation:
System privileges can be very powerful, and should be granted only when necessary to roles and trusted users of the database.”
What’s the best way to combat such vulnerabilities?
Ben Natan stressed the importance of installing quarterly Oracle’s Critical Patch Updates, a practice that not everyone agrees is as critical as Oracle claims. However, he said that “the only way to address vulnerability is to apply these patches,” even when it comes to simple attacks (of which the majority of security attacks are) like password breaches.
Still, the security decisions you make depend on many unique factors within your organization. Where do your security priorities lie? How do you assign roles and privileges in your company? What are your own experiences with applying Oracle’s patch updates?
A few days before the start of Collaborate, the annual Oracle user show being held this year in Las Vegas, the Independent Oracle Users Group (IOUG) released some data from a survey of 381 of its members.
The results were not terribly surprising. To name a few: Virtualization efforts are being hampered by up front budget constraints and organizational issues. Organizations who are embracing virtualization are more likely to expand it into database environments. More than 80% of respondents had increased the number of database instances at their companies.
There were some interesting nuggets though. The research was sponsored by VMware, which obviously sees an opportunity while Oracle straightens out is virtualization road map, combining Oracle VM with the Sun family of server virtualization products. In fact the initial press release cited Oracle as the sponsor of the research, an error that has since been corrected. Perhaps a Freudian typo by the IOUG?
Despite its sponsor, the survey did note that some respondents lament the resistance from some software vendors to support software on virtual servers. Oracle’s existing policy remains.
“Right now there’s a lot of different choices out there and approaches to virtualization,” Ian Abramson, president of the IOUG told me in an interview last week. “It comes down to standardization. At the end of the day it’s all going to work out as these models mature, you’ll see these things work out.”
Undoubtedly, many attendees at this week’s Collaborate show are hoping those answers arrive here in Las Vegas.
According to the survey, UNIX is also seeing some defections. While it is still a strong architecture choice, many organizations are moving to commodity platforms, the survey found. Half of organizations in the survey run Oracle database instances on x86 architecture or plan to do so shortly.
Oracle’s own interest in selling x86 servers has not been significant, according to George Weiss, an analyst with Gartner. He spoke with a client a few weeks ago on the very topic.
“I was with one this morning that was asking if Sun would want to bid and meet practices of HP and Dell in x86 servers and they were getting a lukewarm interest in it,” Weiss said.” If there’s a Solaris x86 Server business Oracle is interested in promoting, they need to begin to think about strategies to take business from HPs IBMs and Dells.”
Likewise, Weiss had little optimism for Solaris.
“[Oracle is] not interested in wide open business operating systems that compete with Linux like Solaris,” he said. “There are questions about whether Solaris x86 business is one where there’s a high degree of focus.”
Meanwhile, as Oracle customers wait for clarity and guidance on the Oracle-Sun future, many shops continue to have to do more with less.
According to the survey, some Oracle shops have taken a budgetary hit: 28% said they have cut staffing and/or support and 19% have cut back on database growth, software or tool purchases; 38% said they downsized at least part of their operations over the past year, either people or systems.
So while many Oracle shops are still struggling to do more with less, and see virtualization as one solution, they’re still finding resistance in their own companies and awaiting guidance from Oracle. Hopefully the user community can provide some answers and advice here at Collaborate.
We recently examined the increasingly optimistic future of MySQL and Java now that they’re in Oracle’s hands, especially as the two open source products have just been endorsed by Oracle and Sun executives, including the Father of Java himself, James Gosling.
However, Gosling dropped a surprise announcement on Friday when he announced he had resigned from Oracle.
Gosling, who invented the Java programming language over 15 years ago, recently told Oracle users he was “pretty encouraged about the way things are going to work out.” But he must not have been encouraged enough. Though Gosling didn’t give any specific reason for leaving Oracle behind, he did write in his blog post titled “Time to move on…”, that “just about anything I could say that would be accurate and honest would do more harm than good.”
How will this affect Oracle?
The software giant has already seen the departure of numerous Sun executives – such as Chief Open Source Officer Simon Phipps and Sun CEO Jonathan Schwartz – and we’ve yet to see where Oracle can take Sun without them. From the looks of the comments on Gosling’s blog posts, many don’t have high hopes. While most of those who commented had good words for Gosling and what he had created, it was a different story for Oracle and Java’s future:
“I’ll say what you don’t want to admit, because, as a long-time grunt there, I know Oracle well. Technologically, Oracle is a complete mess. It’s operated more like an inefficient and ineffective government than a business. Ellison is a fool not to have given you anything and everything to keep you, and others from Sun, happy”
“From one ex-SUN employee to another – well done for lasting as long as you did.”
“Java R.I.P. Well Java isn’t dead yet but I think it is dying and when Oracle took over the nails where firmly seated in the java coffin. Glad you left. I think Oracle is one of the least innovative tech companies in history.”
What do you think? Will this affect Oracle’s plans for Java? Do you think Oracle can – or should – continue to develop Java?
If you tuned in to Oracle’s four-hour webcast on its plans for Sun in the wake of the acquisition, you may have strained to hear what Oracle’s specific plans were for pricing and support (and the pricing for support).
That’s because there was very little said.
It now seems that Oracle and Sun customers, anxious for information on just what Oracle’s plans are for its newly acquired Sun product line, are going to have to find it for themselves.
Don’t count on Oracle to shout from the rooftops that it’s raising prices and changing policies.
A few revelations trickled out last week, when Oracle made some changes to its hardware systems support policies. Oracle intends to enforce an “all or nothing support policy.”
So long as OpenSolaris remains free this isn’t the end of the world… but now all eyes turn to OpenSolaris’s fate. The end of the month is here and OpenSolaris 2010.03 is nowhere in sight and those I’ve asked on the inside are unable to say.
This might be a good time to catch up on non-Sun/Oracle distros such as Nexenta, Schillix, and Belenix.
Some changes were, of course, expected and most industry observers knew that Oracle would bring more discipline to Sun’s licensing practices, an area in which the company was notoriously lax. By most accounts, the “all or nothing” support policy was focused on smaller businesses paying for support on just a few servers but using the patches and updates across the company.
The problem with the “all or nothing” policy, according to Altimeter Group’s Ray Wang, a particularly vocal critic of the support policies for enterprise software, is that they need to have different tiers of support.
Besides, Oracle marketing being what it is, one should also expect a bigger spotlight on announcements like support for Sun product lines than licensing changes. I spoke with Jonathan Eunice, founder and principal IT advisor for Illuminata about the Oracle-Sun changes.
“It’s a big complicated acquisition and some of the parts are aspirational. ‘Yes we’ll invest more in processor development than Sun did,’ that looks good in a press release and you can announce it,” he said. “‘We’re going to charge you more for maintenance is not lofty.’ Though it’s certainly reasonable from a Wall Street perspective or an investor perspective.”
Just how all the Oracle-Sun products and procedures are going to shake out will still take some time and Eunice predicts it will be at least another quarter before we have a sense of the full extent of the roadmap.
Oracle customers, familiar with how the company handles database and applications licensing, can expect a similar approach to third party support for hardware. Oracle already has two lawsuits pending against companies that offered third party support and maintenance for applications, now defunct TomorrowNow and more recently Rimini Street.
While support for hardware is a different business, expect some strong-arming and tighter conditions from Oracle, Eunice said.
In the meantime, be on the lookout for any notices or emails from Oracle and watch the price lists.
“Real Oracle watchers check every week,” Wang said.
Last year, the Burton Group’s Anne Thomas Mane caused quite a stir when she declared on her blog that Service Oriented Architecture (SOA) was dead. Now, “the great failed experiment,” as she called it, is expected to grow 25% in the next three years, according to new data from the IDC.
The IDC’s Ruediger Spies, who spoke about SOA at the SOA and Beyond Conference 2010 in London, emphasized the role cloud computing would play in its growth. He said that SOA can provide a framework for cloud computing, enabling companies to reduce costs and increase flexibility.
However, not everyone is completely optimistic about the recent push to integrate cloud computing and SOA. In his recent blog post, My Fear for the embrace of SOA and Cloud Computing, Oracle’s Stephen Bennett discusses his hesitations for deploying SOA applications in the cloud.
Though he doesn’t deny the two are mutually beneficial, Bennett’s main concern seems to be that these deployments will occur without enough effort or planning. IT executive Arun Rao agrees that such deployments must be well thought out. In his blog post “Argument for SOA in Cloud Computing Environment”, Rao gives a clear explanation of how SOA and cloud computing works both mutually and individually, discounting the argument that an increased use of cloud computing could mean a decreased need for SOA.
So, what are the potential challenges that need to be addressed before putting SOA applications in the cloud?
Open source consultant Jeff Genender addresses some of these issues in his recent SearchSOA.com interview; for example, the difficulty of deploying component updates without rebooting is a recurring problem in early deployments.
Oracle’s cloud computing platform will have its own SOA challenges — watch this video of Oracle’s David Shaffer discussing the three layers of cloud computing, an important concept to understand before bringing SOA into the cloud: