Lots of Questions at Oracle OpenWorld

Lots of questions involving some big directional shifts and product announcements at Oracle OpenWorld. Will Larry address these Wednesday?

Questions from Oracle OpenWorld (OOW) - I like a challenge and today's OOW event made me do a lot of thinking. Here are some of the big ideas and announcements Oracle's discussed. I post this as you might find my questions interesting.

I caught Thomas Kurian’s keynote this morning at Oracle OpenWorld. Thomas outlined a number of advancements in Oracle product development to several thousand attendees.

Thomas showed how Oracle would support ‘cloud’ computing via the use of efficient and powerful servers, pre-configured with Oracle tools. This machine, Exalogic Elastic Cloud, is in Oracle’s terms, an integrated middleware machine. Oracle executives indicated that a large website, like Facebook, could operate on just two of these machines networked together (up to 8 can be networked currently), with each machine possessing the power of around 100 traditional servers.

An Exalogic machine

An Exalogic machine

That announcement, the presence of these machines at the show and more are convincing proof points that Oracle intends to be a full technology stack player – from computers to applications. That strategy is totally appropriate for Oracle customers that will continue to have their own data centers, operate their own private clouds and want to find more efficient hardware and systems software to use. Some portion of the IT market will want this capability as not all firms are ready to move major applications to public clouds or entrust key applications to third parties (e.g., Salesforce).

Here though are some questions I had after this talk. If I had these questions, I would guess some of you might too. They are:

- Private clouds may be cheaper, greener and more efficient than the conventional data centers companies operate today. But, are the large scale operations from cloud providers like Google and Amazon even more efficient, more effective and greener still? Doesn't Google also use Oracle's database? Oracle’s on the right side of these issues but I’d like more proof points to find how just how much better Oracle or other providers solutions are.

- Private clouds are not always the same as those offered by third parties, especially third parties selling applications with their cloud capabilities. Usually a private cloud transfers some or all of a company’s data center capabilities to a provider or moves many data centers into a single cloud provisioned environment. These private clouds can take advantage of scale, virtualization and more to create more efficient processing environments. That consolidation can usually be accomplished without moving to a new platform if certain conditions exist (e.g., the application software licenses permit usage on a virtual environment). When these moves can be timed with a move to a more efficient, less power hungry and more powerful server, then additional economies are possible. That’s all goodness. But, this gets academic when a software user decides to utilize application software running on someone else’s cloud (not theirs) and not caring one bit about the usual data center concerns (e.g., backup, recovery, security). These customers value not only lower cost but also the ability to move IT people out of systems administration activities and into more strategic applications development roles. It’s this part of the Oracle story I didn’t hear today and I’d like to get more on it.

- I can also see Oracle’s tools and Exalogic technology becoming a hit with BPO (business process outsourcing) providers as it lets them dynamically manage multiple applications for multiple clients on one powerful machine. But, how big is this market anyway?

- The Exalogic machines are big – there were several on display in front of the keynote auditorium area. It’s impressive that two of these can handle something like Facebook but I wondered whether the typical JD Edwards customer would find this machine overkill? Exalogic positions Oracle well against firms like IBM on the high end of the market but I’d like to learn how it plays with other Oracle users.

- Thomas stated that Oracle is building ‘elastic and scalable capabilities’ with its cloud offerings. I would like to know if that applies to their software licenses as many software licenses I see have a cost structure that is elastic and scalable as long as costs continue to go up. Revenue recognition and VSOE make it tough for a software company to scale down costs or return unused license monies. This is one of the big draws of SaaS solutions, like NetSuite and Workday, as the costs can go up or down. I’d like to know if the new Oracle pricing works both ways as well.

- Oracle made a pile of announcements regarding Fusion applications. I’d highly recommend you read: http://www.oracle.com/us/corporate/press/173456

- Thomas Kurian indicated that these new applications come with multi-tenancy built-in. I’d like a lot more information on this capability. Does this mean that one cloud site, like Oracle’s own site in Austin, will be able to apply application software updates to hundreds of different customers simultaneously and that all customers are using the same version and copy of the software at the same time? I hope so. Application software maintenance activities are some of the most expensive TCO cost activities in an application software lifecycle.

- When Oracle states that: “customers will be able to extend the value of their applications environment by using Oracle Fusion Applications components side-by-side with their existing applications portfolio” does this mean that the new apps are bolt-on products that complement existing on-premise apps? That’s okay but that wasn’t clear. Or, are these apps the beginning of a tidal wave of application components that will eventually replace the on-premise applications? That’s okay, too. Oracle states that: “Delivered as a complete suite of modular applications, Oracle Fusion Applications coexist with existing Oracle Applications. As one module, a product family or the entire suite, customers can choose to leverage the advances pioneered by Oracle at a pace that matches business needs for a new level of performance”. If I read this correctly, Oracle intends to sell on-premise, cloud-based and hybrid products. They appear to want to play in all spaces. The question I have is that software optimized for a pure SaaS cloud environment (where there is only one technology stack, one database, one set of systems management tools, etc.) would appear to be thinner, faster, and easier to develop new releases than a product designed for all sorts of technical environments. In Oracle’s quest to get business in all application markets are they sacrificing some product development/enhancement nimbleness and speed to create a singular product that works in all modes? If their product is truly robust, this may not be too big an issue.

- Thomas and another Oracle executive showed a number of personalization tools (e.g., Fusion Composer) that permit business process changes and meta-data extensions. I thought the demo was compelling but I’d like to see how well these tools stack up against the PaaS (platform as a service) capabilities found in Force.com and NetSuite’s SuiteBuilder.

When I attend a software user conference, I often wonder if I’ll walk away wondering why I went and did I learn anything new. I did learn a few things here today and I believe there are several questions I still need answers for. Lots of content and announcements often creates lots of questions and I actually welcome that.