Cloud could deliver a silver lining for Oracle

Oracle may well be about to prove itself a winner in offering a range of public and private cloud solutions to companies searching for less confusing and more secure ways of using the development

ORACLE'S HEADmay be in the clouds, but its feet are firmly on the ground as it looks for fresh revenue growth in extensive new cloud-based services, and powerful hardware designed to manage "big data".

At its most prolific annual OpenWorld user conference in years, the company this week laid out an ambitious and comprehensive range of cloud services that covers virtually every angle from which a customer might wish to utilise cloud computing.

Chief executive Larry Ellison said Oracle would offer a complete “stack” of cloud offerings, giving customers access to its muscular hardware (Infrastructure as a Service, or IaaS), a working environment, based on its long-in-development Fusion middleware, on which to run applications (Platform as a Service, or PaaS) as well as a broad range of applications running in the cloud (Software as a Service, or SaaS).

In his second keynote speech on Tuesday, Ellison said, that with this broad cloud offering, “it all comes together, it all has to be together for the cloud to work”.

He said Oracle had hundreds of customers using its cloud-based Fusion applications to manage areas ranging from human resources to sales and marketing, finances, accounting and customer relations, and would have thousands by 2013.

He also introduced a social media service that can be integrated into large company’s applications, which he claimed was different from anything else in the market.

“All of our applications are socially enabled,” he said.

It’s all a big turnaround for Ellison, who only three years ago dismissed cloud computing as a fad and “gibberish”. The company has until now, also failed to provide convincing applications in the exploding area of social media.

Company president Mark Hurd – the former chief executive of HP, who was controversially dismissed by HP’s board – was also highly visible at the event, giving two keynotes, and meeting journalists.

Hurd said the broad range of products introduced at the conference was evidence of ongoing innovation within the company. Oracle’s RD spend, expected to hit $5 billion this year, has been productive, he said.

“More R&D spend doesn’t necessarily mean more innovation. [But] if you look at the yield out of R&D here, you see incredible yield.”

He noted that the company, which has its core strength in database technology but has expanded into nearly all areas of enterprise computing thanks to a large appetite for acquisitions, “wants everything to be best-of-breed at every level of the technology stack. We want to be leader in market share at every level.”

Many of Oracle’s new offerings are designed to manage “big data”, the endless stream of information companies take in from sources such as mobile and online services. Hurd said data was growing at a rate of 35-50 per cent a year for most Oracle customers.

Customers need to be able to manage this increased flow while also consolidating their information technology and reducing operating costs.

Hurd said Oracle was the only company that could address companies’ austerity and innovation agendas simultaneously.

At the heart of Oracle’s cloud services is its public cloud and private cloud offerings, which Oracle executives said would encourage companies to move to cloud computing by letting them start with transferring just one or two areas of their IT environment to the cloud.

Oracle will also provide, manage and run its private cloud infrastructure for clients, on their own premises.

“We’re the only cloud provider that gives you a choice of deployment,” said Ellison on Tuesday.

He said customers can test software and services in a public environment, then move them to private cloud infrastructure for reasons ranging from security or privacy concerns, or governance requirements.

According to analyst Gartner, some 78 per cent of enterprises are looking at developing a private cloud by 2014.

Ellison said he thought a good portion of Oracle customers currently running Fusion applications on the Oracle public cloud would migrate to private cloud.

The demand for private cloud services has been greater in North America, he said, but he expects it will be evenly split eventually with the Europe, Middle East and Africa (EMEA) and Asia Pacific regions.

He expected slightly stronger demand in the EMEA region than in Asia Pacific.

Oracle executive vice-president of product development Thomas Kurian said the majority of Oracle customers run a “hybrid cloud”, with some applications on their own systems and some on a public cloud.

The company also announced a new version of its flagship database product, to be called Oracle 12c (for cloud), which it says can consolidate numerous databases into a single database with many “virtual” component databases, for easier management in a cloud environment.

A new X3 version of its Exadata database machine runs databases in faster and more reliable semiconductor memory rather than disk-drive memory, significantly compresses data to reduce storage requirements and also runs 100 times faster than the previous X2 version, Ellison said.

Oracle’s major investment in this broad cloud portfolio has required it to build new data centres, said Abhay Parasnis, senior vice-president of Oracle Cloud.

“We are on a very aggressive rollout in terms of our global data centre footprint,” he said, noting Oracle was adding two more data centres in Europe to bring the worldwide total to 10.

Though primarily focused on large enterprises, Oracle hasn’t taken its eye off the mid-sized company market, which it defines as firms with fewer than 1,500 employees or below $500 million in sales revenue or operating budget.

Through its Accelerate programme, it makes the same products available to this vast mid-size businesses through the cloud, according to Steve Cox, vice-president of Oracle Accelerate.

After Oracle, a technology juggernaut since incorporating most of its rivals in the past decade, missed estimates in its last earnings report, the market has been looking for signs that the company has a roadmap for generating revenue across its many business divisions.

It may well be the cloud that delivers this silver lining.

If Oracle can deliver the many pieces of this cloud picture as promised, it would likely find a strong market from companies searching for less confusing and more secure ways of moving to cloud computing, several analysts said.

Bank sends managers to get their heads in the cloud: AIB tech team at openworld looking for ‘what comes next’

AMONG THE estimated 50,000 people attending this year’s OpenWorld event in San Francisco are two delegates from AIB, here to find out more about “trends in the industry and what’s coming next”, says Mark Patterson, AIB infrastructure manager, who also gave a talk.

Attending OpenWorld enables them to network with colleagues, get immediate help on problems, and talk to solution providers on the show floor, says Kevin Callanan, AIB database manager.

Senior executive management has also asked the two to brief them on past OpenWorlds, he says.

“We’ve had benefits from coming in the past. For example, we got a better understanding of the trend towards consolidation.”

As a result, AIB has moved from using several separate software applications in-house, to developing a private cloud which they hope to complete by next year.

It consolidated its database platform, halving the number of servers and databases needed.

“They now all run on Oracle, where previously we had a mix of providers.”

With its latest product announcements at OpenWorld, Oracle “can now be a one-stop shop for database services. That will enable us to deliver databases much quicker, at less expense and we only have one vendor to deal with,” says Patterson.

Callanan says the whole Oracle 12c database model introduced at the conference “is the model where we’re going with the cloud. It’s future-proofing our strategy, and we now have a fully mapped-out plan for the next four to five years.”

He also says a shift to using Oracle hardware last year had brought “significant cost savings”.

Overall, says Patterson, having easier-to-manage databases and IT “frees us up to deliver our existing environment better, and our customers should see a better impact.

“AIB is transforming and has new banking strategies and IT is key to delivering them.”