Kicking off the new year at Oracle

Kicking off the new year at Oracle

Summary: Hands up all those who think Oracle will delight Wall Street when they announce full year results for the year ended yesterday? I'm not betting in any direction but I am betting that the second half of this calendar year will see Oracle facing challenges on a number of fronts.

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TOPICS: Oracle
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Hands up all those who think Oracle will delight Wall Street when they announce full year results for the year ended yesterday? I'm not betting in any direction but I am betting that the second half of this calendar year will see Oracle facing challenges on a number of fronts.

Over burdening legalese

Last week, someone alerted me to this on Twitter:

RT : RT : And the award for "Most Legally Encumbered Hello World Program" goes to Oracle for

Tim's Tweet was retweeted hundreds of times and you can see why:

/*
* Copyright (c) 1995, 2008, Oracle and/or its affiliates. All rights reserved.
*
* Redistribution and use in source and binary forms, with or without
* modification, are permitted provided that the following conditions
* are met:
*
*   - Redistributions of source code must retain the above copyright
*     notice, this list of conditions and the following disclaimer.
*
*   - Redistributions in binary form must reproduce the above copyright
*     notice, this list of conditions and the following disclaimer in the
*     documentation and/or other materials provided with the distribution.
*
*   - Neither the name of Oracle or the names of its
*     contributors may be used to endorse or promote products derived
*     from this software without specific prior written permission.
*
* THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS
* IS" AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
* THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
* PURPOSE ARE DISCLAIMED.  IN NO EVENT SHALL THE COPYRIGHT OWNER OR
* CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL,
* EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO,
* PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR
* PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF
* LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING
* NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS
* SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
*/

/** * The HelloWorldApp class implements an application that * simply prints "Hello World!" to standard output. */ class HelloWorldApp { public static void main(String[] args) { System.out.println("Hello World!"); // Display the string. } }

Oracle isn't alone in dumping piles of legal 'stuff' on already over burdened CXOs. At SAPPHIRE Now I heard about contracts running hundreds of pages much to the horror of some inside SAP. Even so, Hello World, Oracle style should give a taste of how far some vendors will go. This is becoming an increasingly difficult area for customers to traverse. It is wholly at odds with the simpler world of consumer technology but serves a powerful purpose in the hands of enterprise vendor lawyers: protecting revenue streams from a shrinking marketplace while SaaS vendors snap at their heels.

Oracle as hypocritical on sustainability?

Yesterday, CFO fielded a webinar on sustainability. Whatever you think about the content or the fact Oracle is skewing the discussion to focus around the finance department, it was remarkable for two reasons:

First, In a related article on Oracle's website it says:

Oracle’s biggest impact is to drive benefits to customers through its products. While IBM seems to think the route to a “smarter planet” is through high-priced consultants, Oracle’s route is through the delivery of actual hardware and software solutions that can dramatically improve sustainability performance and compliance.

That's gotta hurt but is it a tenable argument? I could equally argue about costs of software AND consulting from Oracle - that comes later in this piece.

Second: while the CFO webinar talked at length about the need for sustainability reporting as part of the pack of information that stakeholders of all persuasions want to see, Oracle has a different take. Last September, InfoWorld reported that:

Oracle's board of directors has weighed in against a shareholder proposal calling for the creation of a board-level committee on sustainability, according to the proxy statement for the vendor's upcoming annual meeting...

..."What I'm trying to do is get these companies to acknowledge that it is the directors' fiduciary duty to ensure the company's policies are sustainable," [John] Harrington [sustainability activist] said in an interview Wednesday.

But Oracle's board unanimously opposes Harrington's motion, saying that while it "takes environmental sustainability very seriously," the company's current efforts around the topic are satisfactory.

Sustainability is a volatile topic that seems to go in and out of favor. Some are concerned that the public interest in this topic is waning yet it seems enough of Oracle's customers want a solution set for the company to have developed product based on Hyperion. That is slated for GA in the second half of 2011.

More broadly, sustainability is one of those topics where it makes sense to eat your own dog food as a way of demonstrating good corporate citizenship. Put more prosaically, it's good PR. We shall have to wait and see whether Oracle changes position. In fairness, Oracle produces a sustainability report on OpenWorld (PDF) but that's the limit of what I can find. Taken in the round and in the absence of positive statements to the contrary, does Oracle's current position strike you as vaguely hypocritical?

Lawsuits and costs

While most attention to failed projects focuses on SAP, Oracle is racking up its own share of legal actions being brought or threatened by disgruntled customers. AIB in Ireland posted a writ claiming €84 million ($119 million) earlier in the year. In March, Dr. Babur Zahiruddin makes the more serious assertion that links kick backs to another failed Oracle project in Pakistan. The only project related costs mentioned are $6 million.

More recently, Oracle is being sued by Montclair State University for a claimed botch up of a PeopleSoft implementation. What makes this case interesting is the relationship between software and implementation costs: '$4.3 million for software and support' and '$15.75 million for a fixed-fee contract for implementation services.' It is claimed that once Oracle was kicked off the project, Montclair found itself needing to stump an extra $10 million. If correct then that puts the project implementation costs at six time licensing costs.

I'm sure my enterprisey colleagues will be sighing at these numbers but not surprised. But is this sustainable in the 21st century? I can't see it when alternatives are emerging that ditch the upfront license in favor of cloud-based subscriptions.

Fusion, Fusion, wherefore art though Fusion?

Last week Josh Greenbaum went off on a rant about lack of access to information about the progress on Fusion. Hardly surprising as he is not one of Oracle's currently 'favored sons' as I call those analysts who have inside knowledge of Fusion progress but are gagged from speaking publicly. To be frank, the situation has become comical. And not for the reasons you'd usually associate with me about pay-for-play among certain analyst groups.

If you know where to look, there are plenty of clues about what's going on. Certainly enough to satisfy inquiring minds or provide a headstart into further inquiries. A great place to go trawling is among the Oracle ACE blogs. If you look carefully at the eligibility rquirements for being an ACE, principle among them is to write an Oracle related blog. Unlike the analysts, these are not censored in any way. In fact if you look among them, they are not formally corralled at all.

It is my understanding that ACE Directors are funded in a similar way to how SAP funds its blogger program. They get invited to events, have access to most of the right people and are comp'd for travel and expenses. What's not to like about that?

The reality is that Oracle's funding of the ACE program comes via development while the analysts are funded via AR. Development have a keen interest in understanding what people in the field think. So, it is both logical and sensible that Oracle maintain a program that is unfettered by petty rules over what can and cannot be said, even though Oracle may well look on ACE blogs as amateur affairs. AR sees analysts as a thinly disguised extension of marketing that has to be tolerated at best and which has to be controlled through 'review.'

I'd argue that the quality of information available from at least some ACE sources is likely to be superior to that from the marketed-to analyst community. And to put a cherry on this part of the argument, is it any surprise that Vinnie Mirchandani was pleasantly surprised (sic) at the open dialog he had with Steve Miranda - who works in Oracle development. But what of Fusion?

As I and many others have said before, this program suffers from severe project creep. Debra Lilley, UKOUG Chair and ACE Director warned of the dangers of further slippage as it relates to Oracle support:

I am not pushing people to move to Fusion, I really do believe most should upgrade to R12, but I do always say you need to know all the information to make the right decision for your organisation.

Oracle risk customers going elsewhere for support, and I don't think that is the right answer either. Perhaps Oracle, you should waive year two of the extended support fee. Not because people haven't upgraded, but because you have not given them the product in time for them to make the choices you gave them.

Let's be clear. Ms Lilley is not slow at voicing her displeasure when Oracle doesn't get it right but she is a huge fan of what Fusion promises. I can't see anyone having difficulty with that position. Her balance should be both applauded and welcomed.

From the soundings I have recently taken, there is a concern that Oracle's lack of transparency and signposted direction could mean a run into the arms of third party maintenance providers as Ms Lilley indicates. A bonanza for Rimini Street? I doubt Oracle will let it go that far but that's what the rumor mill is contemplating.

Concluding thoughts

It is easy to be sucked into the Oracle reality distortion field, dominated as it has been in recent years by glittering financial results. But if the factors I have outlined are anything to go by, the reality when viewed from my cheap seat perch is somewhat different. Oracle is vulnerable. While Fusion is slowly gaining a core group of impressed customer fans, there are plenty of other things going on that make the company look like any other old software company that is mired in the success of the past and the complexity of the here and now.

How it responds going forward will tell us a great deal about how resilient and sustainable Oracle's business model and technology vision really is.

Disclosure: Debra Lilley and I both serve on the Board of Advisors for Constellation Research which in turn lists Oracle as a client. Board advisors have no commercial relationship with Constellation.

Topic: Oracle

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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3 comments
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  • RE: Kicking off the new year at Oracle

    Well just goes to show You can shut out the truth that computers are a waste of time
    Luddite24
  • Over burdening legalese

    I'm not trying to defend Oracle but the source code legal notice is just a standard and you will find it in open source programs as well to make such big noise about it is a bit naive. Inspite of all that you have written I find Oracle application more standard compliant than other vendors and that makes a big difference.
    rjgeek
  • They missed something from the Hello World program

    The thousand lines of code and dozens of objects that are necessary to write a hello world program in Fusion middleware.
    jorwell