Paul,
Just a few months back you were pessimistic about the entire industry...
http://www.zdnet.com/blog/murphy/depressing-jobs-advice/1841?tag=content;search-results-rivers
LOL... So much for your July prognostication, hehe.
While I agree with your optimism for the industry.. I can't fully agree with your growth projections. I do see Oracle making some growth, though, just not a quadrupling.
Also, Sun and IBM are now the ones playing nice... I think that is a good play, now that IBM and Sun have come out with new high end models... HP is IMO the vulnerable one... in the shrinking high end(but profitable) market. I suspect that this next decade... HP will be the one having major problems.
HP has sacrificed alot in the long term for short term profits over the last few years. Their R&D is barely more than Oracle's... (IBM's 3 year R&D is more than HPs and Oracle's combined over the last 3 years) and they have gutted their service units.
The two big positives coming out of Oracle’s OpenWorld conference in San Francisco this week were both follow throughs on earlier commitments: on the structure, completeness, and roll-out of the Fusion applications environment, and on the integration of hardware and software through engineered solutions (i.e. computing appliances) in everything from single slot Xeons for foggy thinkers to the eight rack T3 tornado climax cloud - and, no that name’s not gibberish, it’s Oracle’s Exalent venture in market mocking wording.
More good news was hidden among the hype: Victoria Falls servers now, Solaris 11 in preview, Red Hat sidelined, stronger competitive positioning vis-a-vis both HP and IBM, new emphasis on operational simplicity and reliability (e.g. bringing networking and storage back into the box), and the working out of the Fujitsu relationship.
More subtly, I think there were back channel hints about yet another license simplification effort and, more importantly, clear indications that at least a few marketing people have figured out the obvious: IT may argue about price and throughput but users really only care about system response - so the T3’s whomping of both x86 and Power7 on throughput and cost is much less important in the appliance market than its advantages in providing consistent sub-second response for application users.
To the extent that there was bad news it came from the Java people - where direction setting seems almost as confused as the environment itself, and not a single Oracle employee came anywhere close to admitting that the decision to use Java for the Fusion apps made sense before Oracle bought Sun, but doesn’t now.
And of course there was lots of interesting minutiae, most of it positive - but some of it also amounting to a depressing commentary on the inadequacies of Sun’s marketing people in the face of concerted media attacks. Some of Oracle’s sales people have discovered, for example, that the cryptology processors embedded in CMT make sense and should be mentioned to customers - as in duh! and only four years late.
So what elephant in the room didn’t get named? Growth: Ellison has said Oracle should grow, over the next five years, into something roughly IBM’s size in revenue terms, but while the entire conference was about this, nobody spoke directly to the challenges involved in quadrupling revenues for an already large company.
At the grossest level the answer is, of course, obvious: they plan to sell the existing customer base whatever that base wants while betting the company on growing their applications market through appliance computing - thus the new OLTP appliances support SQLnet, a kludge embarked on when Microsoft omitted TCP/IP in Windows 3.
Most analysts answer the growth question by assuming failure: by assuming, that is, that management can’t grow the company enough internally and will therefore have to make a couple of Sun sized or larger acquisitions. I think that’s pessimistic: the growth opportunities in appliance computing are enormous and while it might make sense to grab a few good people or high potential technologies (like an advanced, non Intel, handheld) through acquisitions, buying into dying businesses like SAN storage or Global IT Services is a game for losers.
(One caveat: if Hurd gets both halves of Novell, he’ll give Ellison the opportunity to go after IBM in the courts and the press - and that might be worth the money.)
Unfortunately the major sales challenge is the same one Sun faced: the absence of an adequate, customer side, fifth column - unlike Apple, Oracle doesn’t sell directly to the end user and there are just aren’t enough people with strong pro-Sun/Oracle prejudices in buying positions around the world to give Oracle the market growth it needs.
Basically the problem is that the mid size businesses that would benefit most from throwing out the Wintel/DP environments they have in favor of the appliance computing packages Oracle wants to sell, don’t have enough people in place who know what these are, how they might work, or why their employers need them - on the contrary, the decision influencers in place generally have their careers tied to older and less effective technologies to the point that they’ll willfully ignore more modern alternatives while lying to both themselves and their employers to protect the beliefs their jobs depend on.
This is the problem disruptive technologies always face - and, of course, dissonance theory predicts that commitment to failing technologies produces howling mobs desperate for disinformation; or, in this case, a market for the journolists working from the same talking points, quoting the same press releases, and spouting garbage like this:
Their appearance came as a surprise to many observers who did not expect the T3 processors and resultant systems to see the light of day following Oracle’s takeover of Sun.
to denigrate everything Oracle at every opportunity.
Sun’s marketing people tried appeasement, and failed - of course. So what would work? Obviously better marketing - and along those lines I have a suggestion for Ellison et al that might help: add a formal HR placement function to your certification processes, and deliver that service through an arms-length placement agency whose recruiters use appliance computing, can spell both lynnix and Solaris correctly, and at least split their sales effort between user management and IT.
The corporate goal would be to see this agency establish small franchisees in each major market and use them, in conjunction with existing local Oracle sales coverage and training programs, first to add work experience to certification, second to place evangelists in customer organizations, and third to provide a highly visible, Windows document focused, reference site for Sun Ray, Oracle Office, and appliance computing.
The bottom line on this idea is that implementation would be good for everyone - and not mainly because the placement business can be highly profitable, but mainly because it puts the right people with the right skills in the right places to drive the customer decisions shaping Oracle’s growth.
