The recent acquisition of Sun by Oracle has raised a lot of speculative discussion about the latter vendor’s strategic pursuits. The move may or may not result in a power triumvirate of HP-IBM-Oracle. But Oracle expanding its portfolio to include hardware could be a game-changer.
Oracle has a dubious record with hardware plays. The nCube investment (circa 1988) and network computer idea (circa 1996) both presented interesting vision, but didn’t deliver tactically. NCube video-on-demand (circa 1994) ceded to decommissioning the product (circa 2001).
While many are focused on the state of Sun’s numerous DBMS partnerships, I’m more interested in the fate of Storage Technologies, which was acquired by Sun (circa 2002). Do a little research and you’ll see that EMC stores the lion’s share of DBMS data across enterprise data centers. If Oracle keeps the Storage Tech products it might shave some revenue from EMC and gain an even larger wallet share with IT organizations. Oracle’s intentions are equally unclear around the Exadata product, which had previously relied on the HP partnership that’s certainly strained. With the acquisition of Sun, Oracle is more able to go head-to-head with the likes of HP’s Neoview and Teradata.
Clearly the company has the option of producing a database appliance on its own. Personally I’m waiting to see the level of fear, uncertainty, and doubt Oracle stir up into the data warehouse appliance market. Oracle hasn’t differentiated its DBMS in years. The differentiation has always been about the company’s size, the number of Fortune 500 customers, and its broad array of application offerings, and that they work on every conceivable hardware platform. Focus on non-database products has fanned the flames of the market’s perception that databases are a mere commodity.
I can only imagine what’s going on in Oracle’s slideware development organization right now. Here are some of the messaging scenarios that are likely to be on the table:
Scenario 1: “Through our acquisition of Sun, we can now deliver a more fully-functional database appliance.”
In reality, the whole point of an appliance is to reduce complexity and configuration effort. Prepackaging Oracle on a hardware platform already occurs with companies like Sun, HP, and Dell. This isn’t simpler or better.
Scenario 2: “Oracle can now be your de-facto desktop and development tool provider.”
This one could actually be true. Oracle can leverage Sun’s vast software capabilities in two significant ways. With Sun’s desktop office suite, StarOffice, Oracle could provide a captivating alternative to the Microsoft Office monopoly. Any executive would find it difficult to ignore an Oracle office option, particularly in cases where they’ve made significant investments in Oracle as the corporate database standard. Plus, Oracle can monetize open source software by dramatically improving support revenue from these customers. Microsoft does not deliver customer service and support the way Oracle does—and enterprise clients expect more sophisticated and consistent support than the channel usually delivers.
Scenario 3: “Our Java-based toolset covers the spectrum of development needs without forcing your reliance on a specific vendor. Whether it’s middleware, server development, or reporting, we have the tools to support a multi-tier network enabled environment. You can now come to a single company for a single set of tools regardless of your platform type, desktop, server, or operating system.”
For IT organizations that still rely on custom development, this may dramatically reduce the number of suppliers they need. Over the past few years the number of middleware and application tool vendors has diminished—with Oracle being the buyer of many of them. Most IT organizations prefer fewer vendors. Whether open source or proprietary, the combined Oracle-Sun toolset offers Oracle a significant revenue stream in the support arena.
I’m fascinated that little or no attention has been paid to the software assets that Sun has. This combined with Oracle’s DBMS, middleware, and application toolsets offers an unexpected alternative to the ongoing IBM and Microsoft battles for enterprise development. Moreover, with Sun’s Java leadership and the popularity of Java in consumer electronics, Oracle can now enter into the world of consumer software, a la Apple. The opportunity for Oracle to support media companies that sell directly to the end consumer is wide open.
If it’s not careful, Oracle’s future may be in milking the legacy product cow instead of exploiting its newfound software assets. The real question is, is Oracle a company of innovators or bean counters?
It’s rare these days to find clients who haven’t already decided on a standard BI platform. Most of the new BI tool discussions we get into with clients are with companies who’ve decided that it’s time to broaden their horizons beyond Microsoft.
The dirty little secret in most companies is that the BI reporting team has morphed into a de-facto enterprise reporting team. Why is this?
When it comes to reporting, there’s a difference between the BI team and the rest of IT. The fact is that BI teams are successful not because of the infrastructure technologies, but because of the technologies in front of the users: the actual BI tool. To the end user, data visualization and access are much more important than database management and storage infrastructure. So when a new operational system is introduced, users expect the same functionality, look and feel as their other reports.
An insurance company we’re working with is replacing its operational systems. The company’s management has already decided not to use the vendor’s reports—they’re too limited and brittle. They expect these reports to dovetail into the company’s information portal and work alongside their BI reporting. Companies are refreshing their operational platforms every seven to ten years. It’s now 2009, and the last time they refreshed their operational systems was in reaction to Y2K. It’s once again time to revisit those operational systems.
If you look at the challenges BI tool vendors are facing, there is limited growth in data warehousing. Most companies have standardized their BI tool suite. Absent disruptive technology or new functionality, there’s limited growth opportunity for BI tools in the data warehousing space.
But for every data warehouse or data mart within a company, there are likely dozens of operational systems that users need access to. The opportunity for BI vendors now is delivering operational information to business users. This isn’t about complex analytics or advanced computation. This is the retrieval of operational information from where it lives.
Photo by jakeliefer (via Flickr)