Should Oracle expand sub-capacity pricing?

One of the features of the new Oracle Database Appliance is that it offers sub-capacity pricing. That is, you don’t have to license the entire box if you’re not using it. You can just license those cores you are using, and increase that as your business grows. Presumably that affects the cost of the machine.

It’s an intriguing concept and one that has been around for a while in the IT world. IBM has been offering it on mainframes for more than a decade. With the Oracle Database Appliance, customers can scale from 2 to 24 processor cores. An Oracle employee told me today that Oracle will allow a customer to scale down once, and only once. As he put it, Oracle doesn’t want customers “playing games” with the sub-capacity feature, scaling up and down frequently during workload peaks and lulls to save money.

The Oracle Database Appliance is the first product where Oracle has offered sub-capacity pricing. The question then becomes: Should Oracle offer it elsewhere?

It’s a good question. Many very large organizations have unlimited license agreements with Oracle. They pay one (big) cost, and get all the licenses they need. So sub-capacity licensing doesn’t interest them. But in the midmarket, the small-to-medium (SMB) space, sub-capacity pricing could play well. And that is a market that Oracle hasn’t captured as much as other vendors, and where the Oracle Database Appliance plays.

The bottom line is that sub-capacity pricing is technically possible on any Oracle platform. The question remains whether Oracle CEO Larry Ellison wants to make that feature available on a wide range of platforms. On the plus side, offering it on other platforms might be a way for Oracle to grab more SMB customers. On the downside, it could mean not getting as much licensing revenue from those customers that they would otherwise get.

Oracle Exalytics a better comparison with SAP HANA

SAN FRANCISCO - In August I did a podcast with Alex Gorbachev of Pythian and John Appleby of Bluefin Solutions on whether comparing Oracle Exadata to SAP HANA was valid. They both agreed that at that time, it really wasn’t. Well, that has changed this week at Oracle OpenWorld.

Oracle’s announcement of Exalytics, an in-memory business analytics server, brings it more in line opposite the in-memory appliance SAP HANA (High-Performance Analytics Appliance), Gorbachev said this week.

“I think there was something missing before for the Oracle BI customer,” he said. “To have a complete end-to-end solution for a data warehouse they would still need to install something. Now they can have a pre-installed OBIEE (Oracle Business Intelligence Enterprise Edition) stack. This is now probably something that you could put up against SAP HANA.”

Oracle consultancy Pythian this week won the North American Titan Award from the Oracle partner network for its help in implementing Exadata at LinkShare, a marketing company in New York. Company officials also told me this week what it will do for potential customers who buy an Oracle database appliance through Pythian.

“We will migrate anybody’s database from any version on any hardware to a new database appliance for free,” said Executive Chairman and Founder Paul Vallèe. “The benefit for us is we get to demonstrate our expertise to a new account. The customer for us is more meaningful than a single upgrade.”

EMC COO Pat Gelsinger: x86, not Oracle’s stack computing, is the future

I sat down with EMC Chief Operating Officer Pat Gelsinger today at the Oracle OpenWorld 2011 show in San Francisco. I asked him about Oracle’s stack strategy of selling everything Oracle from the chip to the application, and what he thought of it.

“The percentage of servers by volume that are x86 is 96%,” he said. “Revenue is 65%. That means that anything that isn’t based on x86 architecture is niche and declining.

“[EMC and VMware's] resources will be optimized by x86, multi-core, scale-out, cloud environments,” he said. “The industry and the customer base has spoken.”

Gelsinger has been with EMC since 2009; prior to that he was with Intel for 30 years. So I asked him how the Oracle-EMC relationship has changed over the last couple years with Oracle pushing its own storage and its own virtualization platform now more than ever.

“[Oracle and EMC] have 70,000 joint customers,” he said. “So more than anything we find ourselves working together to support and enable our core products with their core products.

“But if you’re an EMC customer today, my sales guy will try to sell you our security product, our backup product. Everybody does that. This is the way business is done. We are competing for where the future is going. Sometimes we agree, sometimes we disagree.”

Gelsinger pointed to the large number of joint customers and the fact that EMC gave the day one keynote at OpenWorld to prove that the Oracle-EMC relationship is sound. While that may be true now, last year’s OpenWorld included a keynote from HP, which also has thousands of joint customers with Oracle. Things can sometimes change in a hurry.

Oracle Exalytics: a few more details

Just got to San Francisco earlier today. Had a chance to go to Moscone North and saw a big sign for “Exalytics,” something we previewed here on Friday. Now I have a few more details in anticipation of Oracle CEO Larry Ellison’s keynote address later today.

From the looks of the picture outside the hall where the keynote will be, Exalytics is not a full-rack machine. It looks like it’s a quarter-rack maximum, but actually more like about 5U high. Maybe there will be options for other heights as well. Not sure. The details were sparse but the picture said it is meant to run Hadoop and Oracle’s yet-to-be-announced NoSQL database, and be integrated with Exadata, the company’s database appliance.

Check SearchOracle.com for more details after the keynote, or follow us on Twitter @OracleTT.

Update: Looks like there are two separate things here. One is Exalytics, meant to run Hadoop and Oracle NoSQL. That looks like a 4U appliance. There appears to be another, second machine meant for big data which is a full-rack appliance.

Oracle OpenWorld 2011 preview: Exalytics, big data and more

Oracle OpenWorld 2011 will be taking over San Francisco Oct. 2-6, with its more than 40,000 attendees checking out keynotes, sessions, demos, and events on blocked-off streets around the city.

The conference has thousands of sessions on the various products Oracle and other related vendors have to offer. It is chock-full of sessions that include direct end user insights on their implementations of various projects such as Exadata, Fusion Applications, E-Business Suite, PeopleSoft, Siebel, J.D. Edwards, Oracle Database 11g and MySQL, and others.

Of course, having so much can be confusing - sometimes it is tough to filter through everything and find what you want. So in addition to checking out the OpenWorld Schedule Builder, here are a few tips on what’s happening this year at OpenWorld, and what sessions I, readers and members of our advisory board are attending.

Let’s first take a look at expected announcements. At Oracle’s most recent earnings call, CEO Lawrence Ellison said the company planned on announcing four engineered systems in the near future. Since then, Oracle has announced the  Oracle Database Appliance and the Sparc SuperCluster T4-4. So what will the other two be?

All indications are that one of them will be something code-named Exalytics. Yes, another Exa- device. According to IT Consultant Scott Tiazkun, the product will be an engineeered system built for business analytics. Tiazkun isn’t too high on it, pointing to what he thinks has been little success with Oracle’s major systems announcement last year, Exalogic.

Ellison also said at the company’s last earnings call that Oracle will be announcing a big data engineered system related to and using Hadoop, a popular open-source big data platform. There have since been reports that the announcement will be an Oracle NoSQL database that includes in-memory features as well.

As for the other engineered system that Oracle will announce, who knows? Last year, IDC analyst Al Hilway predicted that Oracle would come out with something this year called ExaFusion - that is, a server appliance for Fusion Applications. So that is a possibility.

As for me, I’ll be there Sunday to Thursday and attending sessions on Exadata, Exalogic, Fusion Applications, E-Business Suite and other Oracle ERP applications, and more. My colleague Barney Beal will be covering CRM and other Oracle news. We’ll also have folks covering the JavaOne conference as well.

I heard from a couple readers this week who said they were interested in sessions on Oracle Database, MySQL and cloud computing. As for some of our advisory board members:

Vinod Haval from Bank of America will be taking part in several sessions, including an Exadata customer panel and Q&A as well as being a guest speaker at the Oracle Enterprise Architecture Summit. He is looking forward to the keynote addresses and data warehousing sessions.

Sarah Novotny from Blue Gecko will be orchestrating, presenting at and attending community talks and sessions around MySQL. She will also be staffing the MySQL community kiosk in the User Group Pavilion. On Monday she is speaking at a session called “Operational Wins in MySQL 5.5.”

On Monday SearchOracle.com will publish a conference landing page where you’ll be able to find the best comprehensive coverage of OpenWorld, Oracle Develop and JavaOne. Check it out.

Oracle to announce Sparc T4 SuperCluster Monday

Oracle will announce a new Sparc T4-based SuperCluster on Monday in an effort to fight for share of the multibillion-dollar Unix server market.

The SuperCluster T4-4, as it is called, will run Solaris on top of the new Sparc T4 processor. The T4 is a 40-nanometer, eight-core CPU that is expected to run at 3 GHz and higher and built for end users running large workloads such as Oracle Database. Monday will be the chip’s official coming-out party.

Oracle first introduced the SuperCluster last December, when it rolled one out based on the Sparc T3 chips. That original SuperCluster included up to 16 processors, 1.5 TB of flash memory and 144 TB of disk space.

A major difference between the Sparc T3 and T4 is that the eight-core T4 actually has fewer cores than its predecessor, which had up to 16 cores. The move may be an indication that rapid growth of cores within processors has a limit to its benefits, at least when trying to run large workloads that require power over parallelism.

In anticipation of the release of the chip, Oracle earlier this month updated its processor core factor, which left some scratching their heads over Oracle’s licensing policies.

On a small sidenote, the absorption of Sun Microsystems into Oracle is pretty much complete, at least in the front-end. Despite the fact that the announcement today will include Sparc and Solaris - two trademark products from Sun - the word “Sun” doesn’t appear anywhere in the invite to the event.

Feds helped Oracle complete Sun acquisition

Wikileaks published a document last week revealing that the U.S. government assisted Oracle with the Sun acquisition, mainly by approving it themselves and then pressuring the European Union to do the same.

The 2009 document is a cable from Christopher W. Murray, who was then deputy chief of the U.S. Mission to the European Union. The mission is an office meant to maintain diplomatic relations between the U.S. and the E.U.

In the cable, sent to various other federal agencies such as the Department of Justice, Murray states that the U.S. wanted to “prevent a divergent outcome” in regards to the DOJ’s and EU’s reviews of the Oracle-Sun merger. The DOJ had approved the merger in August 2009. Two months later, in October, the EU was still examining the merger. The EU’s major concern was that Oracle’s acquisition of MySQL through the Sun merger would quash competition in the database market. According to the cable:

Oracle stated that the (European) Commission is pressuring it to divest MySQL as a condition for approval of the merger. Oracle claims such a divestiture will destroy the merger for two reasons: 1) Oracle’s business case for the merger depends on keeping MySQL to make the merger economically viable, since Oracle plans to expand the market for MySQL and its associated support contracts; and (2) Oracle would be forced to take a huge accounting loss if it sold MySQL, since it believes that Sun overpaid in paying nearly $1 billion for MySQL in 2008, and it would only be able to sell it for a fraction of this sum.

As a result:

DOJ/Antitrust views this matter as a high priority. Its senior officials and investigative staff are currently engaging productively and intensely with their (EU) counterparts, and are in close touch with Oracle and Sun, in the hopes of preventing a divergent outcome.

It appears from the summary of the cable that the feds had self-interest involved, mainly because of the potential of job losses or gains depending on whether the merger went through, and also the DOJ’s desire to have its merger approvals not contradicted by another global agency.

Oracle says it is unwilling or unable to make certain divestitures to satisfy the Commission’s concerns, and that merger failure will cause Sun to go bankrupt. Sun announced October 20 that it is cutting 3000 jobs over the next year, as a result of delays in receiving merger clearance from the Commission.

It’s another question whether Oracle helped pressure the feds into helping their cause. The DOJ likely did not want a merger that it approved failing to go through and then causing further job losses and the bankruptcy of a multibillion dollar company in Sun. Needless to say, three months after this cable went out, the European Commission approved the merger without conditions.

Would Oracle really consider buying HP?

The New York Post reported recently that HP’s acquisition of Autonomy and its recent steep stock price drop might make it a takeover target for Oracle. Really?

First, the story. The Post cited several unnamed sources who said that if HP’s stock continues to drop, Oracle might pounce on it. HP spinning off its PC business would presumably make it a more attractive takeover target for Oracle, which isn’t interested in the consumer space.

But what else is there? Oracle has shown that it’s not interested in the low-margin x86 server business. HP sells more low-margin x86 servers than anyone. Oracle is interested in high-margin big-box servers. HP recently announced that its Itanium-based server sales - which are its big-box servers - are suffering, at least in part due to Oracle’s decision to no longer support Oracle software on Itanium servers.

Would Oracle be interested in HP’s enterprise software? Probably, but there would be a lot of duplication, as Oracle already sells plenty of its own enterprise software.

Maybe Oracle would just be interested in capturing HP customers and pulling them into Oracle support contracts, which make up a large chunk of Oracle’s revenue. But I just can’t imagine that there would be enough there to offset having to buy a huge low-margin server business, a decreasing Unix server business and a somewhat duplicative software business to go with it.

Oracle vs. Google, and whether APIs are copyrightable

The latest battle in the Oracle vs. Google “lawsuit between behemoths” is over whether application programming interfaces (APIs) should be considered copyrightable.

When Google developed the Android platform, it copied a lot of the Java APIs that Sun - now Oracle - had developed. Google is arguing that those APIs aren’t protected under copyright law, and therefore that the judge should dismiss the lawsuit. In a document that filed on Saturday, Oracle argues otherwise. According to the Oracle motion:

Over a period of many months, Google employees and contractors sat down and duplicated, line by line, the specifications for Oracle’s application programming interfaces (“APIs”) for Java. When they were finished, they had reproduced specifications for 37 APIs from Java’s core libraries that were identical, or nearly identical to Oracle’s, and they had copied those specifications into Android code.

Oracle adds this as well: “Google, in fact, claims copyright protection for its own APIs.”

If the above line is true, it would expose the hypocrisy of Google saying that APIs aren’t copyrightable and yet trying to legally protect its own APIs.

For a more thorough examination of Google’s motion for dismissal and Oracle’s opposition, check out Florian Mueller’s great rundown of Oracle defending the APIs. You can also take a look at the Oracle motion for yourself.

Oracle to talk about Sparc T-4 processor at Hot Chips

Oracle will give a presentation on its upcoming Sparc T-4 processor at Hot Chips in Palo Alto, Calif. next week.

The eight-core processor is scheduled to be released sometime this year, with the scuttlebutt going around that Oracle will reveal it at OpenWorld in October. The presentation, scheduled for Friday, is called “T-4: A Highly Threaded, Server-on-a-Chip with Native Support for Heterogeneous Computing.”

T-4 servers are slated to ship this year, and there was a call-out in June by Oracle to end users interested in testing them:

Development of the SPARC T4 server is well underway and represents the next major milestone in the five-year roadmap Oracle has laid out for releasing new innovations for the SPARC platform. Oracle’s T4 server is a breakthrough product, providing single thread capability to enable optimized performance for a wider range of enterprise applications.

The new systems use “critical thread API”, or the ability of the Solaris operating system to recognize critical threads in applications and assign them, by themselves, to a single processor core. This allows the critical threads to run at the very highest performance levels without competing with other less critical threads. This delivers faster overall performance by accelerating the more critical components in threaded applications.

In a Q&A on Oracle’s website, the company’s VP of hardware development gave some more information on Sparc T-4 features:

We wanted to get more single thread performance into the SPARC T-series systems sooner rather than later. So we developed a new core for the SPARC T4 that brings together the combination of throughput performance through threading as well as really high-speed single thread performance. It’s really breakthrough technology for us. Referring back to the timeline for development that we have, we developed that core and that technology back in 2006/2007 and we’ll be delivering that to the market in 2011.