A Tale of Two Oracles

SAN FRANCISCO (Oracle Open World 2011) — The CRM community waited nearly three days for the focus at Oracle Open World 2011 to turn to applications … and then it waited a little longer. Despite a Wednesday morning keynote by Steve Miranda, Oracle's senior vice president of applications development, most of the discussion centered on the company's server technology.

That technology—Oracle Exadata, Exalogic, and the newly announced Exalytics analytics server—represents impressive devices in their own right, the flagships of Oracle's new Engineered Systems initiative. Often compared with Apple's technology approach, Engineered Systems means direct control over the hardware and software stack components to eliminate compatibility issues and versioning hiccups.

But, at least at first, Oracle appeared to be letting its applications message grow silent in favor of the metal-and-silicon story. “I think that the focus on hardware was misplaced—you almost have the feeling that Sun acquired Oracle and not the other way around,” said Paul Greenberg, president of consultancy The 56 Group. “That said, we can't really compare Oracle to any other company out there. They are an in-the-weeds technical company focused on a fully integrated hardware and software system they want to provide to larger enterprises. They are no longer particularly innovators. But, as [senior vice president of Oracle CRM] Anthony Lye has always said, they are fast followers—adopters of the existing technologies out there that they can build on.”

More than one pundit cited Oracle's position of following. “This is the first Open World I've been to where Oracle isn't leading the applications market,” said Ray Wang, founder of Constellation Research Group. “Its core skill set is integration and acquisition of technology and helping clients realize savings from that. Innovation is increasingly happening on the customer side, and Oracle is another step removed from that.”

The focus abruptly shifted Wednesday, when Oracle CEO Larry Ellison announced a pair of application-based innovations: Oracle Public Cloud and the Oracle Social Network. The latter is essentially a formal name for the large family of Fusion Apps collaboration tools, but the former marks a major new direction for Big Red. “Both announcements are important releases for Oracle,” Greenberg said. “The Oracle Public Cloud is standards-based and has SaaS, PaaS, and Infrastructure as a Service, as well as interoperability with Amazon or Microsoft.” OPC uses the same software as existing Oracle applications and can move databases to and from any other open standards-based environment in the Cloud or on-premises. “This is not only a great feature, but it also is the answer to the Salesforce Data Residency Option (DRO).”

Wang believes OPC could intrigue Salesforce.com especially because its multitenant applications environment depends on Oracle technology. “Salesforce's Apex and Force code is really old and needs a rewrite,” he said. “Salesforce needs to stop kicking the can down the road and come up with a new system that doesn't run on an Oracle database.”

Meanwhile, Ellison may have opened the door to his competition again, ironically by closing it. Marc Benioff, founder and CEO of applications rival Salesforce.com, was scheduled to speak during Open World's Wednesday events, but Ellison canceled the engagement the night before. Benioff moved the planned event to a nearby hotel and kept rolling. In past years, Benioff has been hosted by Oracle at Open Worlds with little drama. By attempting to deny Benioff a platform, Ellison provided free publicity to Salesforce and generated buzz and speculation. “Nobody would've cared what I had to say today,” Benioff said during his event. “They [Oracle] should have ignored me.”

The dustup marked a low point in what has typically been a friendly rivalry between the two captains of industry and former colleagues. “They've had a good relationship over the years, with a few rough spots,” Wang said. “Marc took advantage of the recent situation, but you don't move somebody's million-dollar keynote. It was a bad move by Ellison.”

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