SAN FRANCISCO – Oracle CEO Larry Ellison showed some interesting Fusion Applications pie charts during his second keynote at Oracle OpenWorld on Tuesday. Basically it was a breakdown of all current Fusion Applications customers.
First off, Ellison said that Oracle currently has about 400 Fusion Applications customers. Then he showed a chart splitting up the Fusion Applications modules. Currently 39% are running Fusion Human Capital Management (HCM), 38% are running Fusion Customer Relationship Management (CRM), and the remaining 23% are running Fusion Enterprise Resource Planning (ERP).
On the second chart, Ellison showed where these Fusion Applications customers are running their apps. About two-thirds, 65%, are running them as Software as a Service (SaaS). Then 28% are running Fusion Applications on-premise. The remainder are running them with Oracle On Demand. Ellison tried to explain the difference between SaaS and On Demand, but to be honest I didn’t understand it. They both seem to me to be SaaS.
For a long time the story around third-party Oracle support company Rimini Street was that they could save you money off Oracle support costs. The other thing you heard a lot was that the company would support older versions of Oracle applications that Oracle itself would no longer support. But now the company is pushing the fact that it supports customized code.
This isn’t a new thing – Rimini Street has always supported customized code, and CEO Seth Ravin said it has become one of the major selling points. Why? Because Oracle Support will not support customized code. Why they won’t do it is not entirely certain, but Ravin has his ideas on it.
“The only way you can drive 92% gross margins is to provide as little support as possible,” Ravin said, referring to the profit margins Oracle gets on its licensing and support services.
It’s clear that Oracle wants to protect its support revenue – it is in the midst of a lawsuit claiming that Rimini Street infringed on Oracle’s intellectual property by supporting Oracle customers. Oracle is also suing CedarCrestone, another third-party Oracle support provider. At the same time, Oracle has recently come out with its Platinum Services product, a high-end support offering for customers running its engineered systems.
During a keynote Monday morning, Oracle President Mark Hurd talked about the Platinum Services promise of a 5-minute response time, adding that sometimes the response to a problem could be “in nanoseconds.”
Platinum Services promises higher support quality, but only for Oracle customers running so-called Platinum products: Exadata, Exalogic and Sparc Supercluster with Exadata, ZFS or Pillar Axiom 600 storage.
Ravin said that’s exactly the point – if you want to get good support from Oracle, you have to spend millions in their engineered systems to get it. But still, he added, Oracle Support will not support customized code.
Currently about half of Rimini Street’s customer base is running PeopleSoft, with another 30% running SAP applications. Rimini’s target is to eventually have about half SAP, one-quarter E-Business Suite, and the rest a mix of PeopleSoft, JD Edwards and Siebel. They say this is the company’s projection because the SAP and EBS businesses are growing so quickly. The company also announced on Monday that it will begin supporting Oracle Hyperion as well.
Oracle is expected to announce its quarterly earnings later today, and there should be nuggets from all facets of the company’s business.
On the database front, we’ll be looking for any hints about when Oracle Database 12c will be released. The next version of the Oracle Database has been in beta version for a while now. Earlier this year Ellison said that Oracle Database 12c might be released in December or January. Then a statement Sept. 4 regarding Oracle’s support for Intel Itanium-based platforms said that “version 12c of the Oracle database” is “due out in early 2013.” At the same time, there are rumblings that, at the very least, details about 12c could be released at Oracle OpenWorld, which starts Sept. 30. On a side note, if you’re beta testing 12c, email me at email@example.com. If you’re not, email me anyway and give me your wish list for 12c.
On the applications front, we will hopefully hear some details on the uptake of Fusion Applications. The next generation of Oracle applications has been generally available for almost a year now, and so Oracle is expected to talk about how successful they have been.
Finally on the hardware side, we will likely hear more about Oracle’s integrated systems. Oracle executives said at the last earnings call that hardware will start to become a “growth story” in this fiscal year, so we’ll see how that has done. We’ll expect some possible talk about the Oracle Database Appliance, which was geared toward medium-sized businesses looking for an integrated database device. There may also be some hints or details about Oracle’s future hardware plans, whether that be the next generation of Exadata or some other new integrated hardware platform.
While the denizens of the Internet may be a bit more distracted by news of other leaks right now, it has not gone at all unnoticed, particularly in the Oracle community, that Oracle experienced a pretty major leak last week.
A 44-page booklet prepping Oracle partners for selling Fusion HCM and the newly acquired Taleo discloses:
- Pricing, which is roughly in line with similar applications currently on the market
- The sliding scale for discount per employee (the bigger a firm you are, the more discount you get)
- How much a salesperson is allowed to drop the price in addition to standard discounts, which is usually 10% but up to 30% on a promotional basis in “carefully defined, approved cases”
- Suggested sales pitch
How did this get out? Somehow, it got posted to Oracle’s website and then removed. Unluckily for Oracle, but luckily for us, Google never forgets anything (especially when “anything” ends up on Google Docs), and given current Silicon Valley grudges, it’s unlikely anyone at Oracle has a guy at Google on speed dial right at the moment (at least, not that they’d be willing to admit). Exactly how did this get posted on Oracle’s website? The world will probably never know, although I’m sure it will make for a great “how I got fired” story someday.
Also, since Fusion HCM and Taleo are available only on limited availability until October 2012, it seems likely they were to be the stars of Oracle OpenWorld this year. Like a prematurely uncovered surprise party plan, this puts a bit of a damper on things.
The takeaway from this is to know how Oracle Partners will try to sell you and your organization on Fusion HCM, Taleo and the HCM/Taleo combo. You know the 10% discount you’ll be offered upfront doesn’t mean you’re special (everyone gets it), and you’ll know roughly what to expect to pay to be a part of the Oracle HCM cloud. I think you should use this info to milk that discount as much as you can. Let your Oracle partner know you really should be a “carefully defined, approved” case.
Oracle has announced its OpenWorld keynote speeches by executives, with the focus unsurprisingly being on its engineered systems and the cloud.
CEO Larry Ellison will give two, as he usually does. The first, on Sunday, Sept. 30, is titled “Hardware and Software, Engineered to Work Together: Why It’s A Different Approach.” His second, on Tuesday, is titled “The Oracle Cloud: Where Social Is Built In.” Usually Ellison’s second is on Wednesday afternoon, so this is a change. Ellison’s second keynote in particular the last couple years has brought a lot of yawns and negative comments in the Twitterverse and elsewhere, so maybe Oracle is trying to change that.
Other keynotes are:
- “Shift Complexity” by President Mark Hurd, on Monday
- “The Oracle Cloud: Oracle’s Cloud Platform and Applications Strategy” by Executive VP Thomas Kurian on Tuesday
- “Oracle Cloud Infrastructure and Engineered Systems: Fast, Reliable, Virtualized” by three execs on Wednesday
- “See More, Act Faster: Oracle Business Analytics” by Hurd on Thursday
Something to watch: Hurd’s first keynote on Monday morning includes a description that says, among other things, that Hurd will talk about “what’s next for the database.” So it’s possible Hurd might reveal some details about Oracle Database 12c, which is in beta now and expected to be generally available by the end of the year.
Oracle is a company Wall Street and a lot of folks love to hate. Analysts love to predict doom and gloom for Oracle. No one seems to really want to hear that Oracle just might be doing alright. As a result of this Wall Street prejudice against Oracle, is it possible that their stock prices may be undervalued?
This is what investment and business blogger Richard Saintvilius thinks. He believes that, with Oracle’s strong revenue growth of 20%, we’ve come to a point where doubters need to start changing their tunes and accepting what the numbers say – that Oracle is growing and there’s no denying it.
On the other hand, Rex Moore of The Motley Fool compares Oracle to AOL circa 2002— flush with goodwill on the spreadsheet (goodwill being the difference between the price paid for a company during an acquisition and the net assets of the acquired company) after AOL’s acquisition of Time Warner, AOL traded at high prices, then suddenly dropped when it was realized that their stock prices were overvalued. What matters, says Moore, is earnings. Many have cited Oracle’s apparent inability to profit on hardware since the Sun acquisition as a reason to distrust any apparent growth.
What’s the truth of the matter? Is Oracle overvalued or undervalued? Will the gods smile upon Oracle, or is it going to crash and burn à la Enron?
I think Oracle’s a pretty safe bet for growth. Why? Well, first, their business model of acquiring promising companies that are competent in what they do works for them. This strategy has led to Oracle being a heavily diversified company- It doesn’t matter as much if their hardware business isn’t doing as well if business intelligence, virtualization and healthcare are doing great. As a result of this diversification, Oracle can stay relevant with new products and in different industries in a way other companies, like AOL, could not. Oracle also has lots of cash on hand – this aspect very likely trumps the goodwill issue, and is something Oracle has going for it that AOL did not.
Like it or not (and there are plenty of people who don’t), Oracle seems not only to be here to stay, but to be growing.
We’re officially in that melancholy time of year when you know the end of summer is sneaking up on you. Across the country, families are returning from their vacations, kids are getting ready to go back to school and people are noticing a distinct chill in the morning air. Most importantly for all of us tech buffs, though, is the return of conference season. Of particular interest to me, of course, is Oracle OpenWorld.
Ahhhh, OpenWorld. That glorious week long convergence of geekery and aggressive business in the glorious city of San Francisco. Part conference, part trade show, part pep rally, part reunion and part music festival, over 37,000 people are likely to attend the at least some part of the gathering this year.
So, what can we expect out of Oracle OpenWorld 2012?
Some things never change. As with most years, we can expect a regular rotation of off-color comments from Larry Ellison, lots of cute, well-endowed booth babes with mega-watt smiles staffing the exhibition hall and likely at least one performance by a musical “has been” who doesn’t seem entirely sure where they are.
There are a few things unique to this year though, of course. For example, Oracle will be tying in a music festival featuring Pearl Jam and Kings of Leon with OpenWorld. Credit where credit is due, that’s pretty nifty. Some other predictions for this year’s OpenWorld:
- A preview of Oracle’s new generation database – The final version probably won’t be ready until December at the earliest, but I’m willing to bet attendees will be getting an enthusiastic sneak-peak.
- New products- Last year, Oracle revealed both Exalytics and the Big Data Appliance at OpenWorld. Most years, they have something new to drop—this year likely won’t be any different. I’m not sure any new hardware will be announced this year, though.
- Enough cloud to tick off Zeus—Not only will everything be Oracle Cloud this and Oracle Cloud that, but at some point during the key note, Larry Ellison will force everyone to repeat after him slowly, “Oracle has always loved the cloud, and the cloud has always loved Oracle” moments before a banner descends behind him proclaiming that Oceania has always been at war with Eastasia.
What are your predictions for OpenWorld 2012? If you have any insight you would like to share, please send it to firstname.lastname@example.org
Oracle has issued a security alert fixing flaws in its trademark Oracle Database product that were demonstrated at the Black Hat summit this year.
Our colleagues at SearchSecurity.com were one of the first to report on the Oracle Database security flaws, which database security consultant David Litchfield exposed during a session at Black Hat in July. From the story:
Litchfield, one of the industry’s top database security consultants, demonstrated several proof-of-concept attacks, during which he was able to elevate his privileges to the database administrator (DBA) level, giving him the ability to manipulate database indexing records remotely via SQL injection.
Three of the exploits he demonstrated were able to beat vulnerabilities reported and patched as long as two years ago: CVE-2010-0902 (an unspecified OLAP vulnerability), CVE-2010-3512 (an unspecified Core RDBMS component vulnerability) and CVE-2012-0552 (an unspecified Oracle Spatial component vulnerability). He also demonstrated another exploit against an unpatched vulnerability that was reported to MITRE Corp.’s Common Vulnerabilities and Exposures database (CVE).
Oracle recommended in its recent security alert that the fix should be applied to Oracle Database as soon as possible. The vulnerability affects Oracle Database Server versions 10.2.0.3, 10.2.0.4, 10.2.0.5, 22.214.171.124, 126.96.36.199, and 188.8.131.52.
“Since Oracle Fusion Middleware, Oracle Enterprise Manager, Oracle E-Business Suite include the Oracle Database Server component that is affected by this vulnerability, Oracle recommends that customers apply this fix as soon as possible to the Oracle Database Server component,” the alert stated.
The web is humming with gossip.
Yes, there’s that K-Stewart R-Patt thing no one really cares about, pundits speculating about why Romney chose Ryan as his running mate and the question as to whether or not it’s tacky to talk about Olympian’s hair style choices, but the question really on everyone’s mind is: who’s next on Oracle’s hit list?
Speculation abounds – some of it carefully thought out, some of it caused by the anxieties of potential prey. No one wants to end up like Sun. On the other hand, Oracle acquisition has actually benefitted the employees of a few companies. Still, it’s a mixed bag, and few people want to be at the mercy of Larry Ellison.
Some have speculated that Oracle’s next move will be to buy HP. The rationale is that Oracle’s leaders likely knew they would never win the Itanium case, but that bad press from the trial would hurt HP’s business enough to leave them in a vulnerable state. Ellison hiring Mark Hurd further hints that this may have been Ellison’s early intention. However, with HP’s current leaner, meaner leadership of Ray Lane and Meg Whitman, the chances of such a deal without a truly hostile takeover are unlikely. Both would be aware that allowing such a thing to happen on their watch would mean curtains for their careers.
Much speculation has also revolved around Oracle purchasing Informatica. The reasoning is clear: There’s a lot of overlap between Informatica and Oracle in data integration. Adding Informatica to Oracle’s portfolio would remove a competitor from the field.
Personally, I speculate that smaller companies have more to worry about than larger firms, especially companies that specialize in areas where Oracle is deficient or is trying to oust a competitor. While I don’t want to give Ellison any ideas, I’d speculate that virtualization firms like Virtual Instruments, cloud-based services firms like ServiceNow or social media firms like HootSuite could all be ripe fruit for the plucking. If any of the above is acquired by Oracle, just remember – you heard it here first.
Lately, it seemed that perhaps Oracle had lost their Midas touch that seemed to charm judges and juries alike, striking out in both the Google API case and the HP “Itanic” cases. It seems such concerns were premature, as Oracle has narrowly avoided a third strike by winning the SAP TomorrowNow case—along with a hefty settlement of $306 million in damages. Not quite the amount they really want, but certainly a haul.
Quick refresher, as this case has been going on for a very, very long time: way back in the late 90’s, TomorrowNow started as a company that specialized in upgrading and providing technical services to PeopleSoft systems. In 2002 they branched out to provide third party support for various kinds of enterprise software, including both PeopleSoft and JD Edwards. TomorrowNow was purchased by SAP in 2005; PeopleSoft was purchased by Oracle the same year.
In 2007, Oracle slapped SAP with a lawsuit accusing them of “corporate theft on a grand scale” due to TomorrowNow having downloaded thousands of documents and programs from Oracle’s Customer Connection technical support website using logins of Oracle customers whose support contracts had either already expired or were about to.
SAP briefly tried to argue that TomorrowNow had been entitled to download the materials as they had been contracted to perform third party support; that didn’t last long. In the end, it came down to TomorrowNow being pretty obviously in the wrong and the only question being how many millions were owed to Oracle– Oracle claimed it was billions, not millions, using the argument that each of the clients who employed TomorrowNow’s services would otherwise have employed Oracle Support. At one point, a judge awarded Oracle $1.3 billion, but another judge threw that verdict out.
That Oracle would get a quick admission of guilt and willingness to bargain was not at all a forgone conclusion. To see a very different outcome, take a look Oracle’s lawsuit on another third party support firm, Rimini Street. Interesting side note: Rimini Street CEO Seth Ravin was a founder of TomorrowNow. Hmmmm.
SAP has agreed to pay the $306 million, hoping to avoid yet another trial. Oracle says that agreement only paves the way for an appeal. What do we here at Eye on Oracle have to say about this decision? Well, At least Oracle’s winnings come close to matching their losses in the HP trial. At this rate, they might just break even…