News Analysis: Oracle's Cloud Disruption Webinar Recording

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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Oracle’s recent partnership announcements to supply Oracle technology to key cloud vendors such as Microsoft, NetSuite, and Salesforce.com create serious implications for the market. 

 

On June 28, 2013, Esteban Kolsky, Holger Mueller, and R “Ray” Wang discussed the implications  of Oracle’s recent partnerships for:

• Salesforce customers
• Microsoft customers
• NetSuite customers
• Oracle customers
• Cloud competitors such as Amazon, Google, IBM, SAP, VMWare, and Workday

Join us at Constellation’s Connected Enterprise, October 30 - November 1, 2013

Webinar recording (sorry, audio only at this time. If you require the slides, please send your request to Courtney[at]ConstellationR[dot]com)

Webcast Index

00:00 – This webinar is over subscribed!!

01:12 – Introductions of Esteban Kolsky and Holger Mueller w/ host R “Ray” Wang

01:40 – April Fool’s joke gone live?

01:53 – Oracle’s Earnings Call and Larry Ellison’s “Leak”

04:05 – Oracle Microsoft partnershp “When hell freezes over – Oracle Databsae in Azure and Hyper V running Oracle database?”

09:16 – The flavors of Cloud Computing

14:34 – Oracle sneaks out Oracle Database 12c

21:23 – Netsuite’s Partnership With Oracle HCM abnd Deloitte

25:57 – Are we going back to closed models instead of the open cloud?

29:13 – And now a word from our sponsor… Constellation’s Connected Enterprise October 30 to November 1, 2013 San Franicsoc, CA- Register here

30:19 – Salesforce – Oracle “Bromance or Betrayal” the Larry Ellison and Marc Benioff Telenovella

34:06 – Is this about succession planing for Oracle’s Larry Ellison?

35:26 – Why not IBM, Dell, HP? Will we have a walled garden of #cloud?

39:43 – Impact on SAP HANA

42:26 – The story of Tom Siebel’s one trick pony and demise, why the “better together” strategy w/ Oracle ERP

47:08 – Is it the end of multi-tenancy as we know it?

49:35 – What does it mean for customers? Axis vs Allies

54:00 – Event Plug: Oracle Open World is September 22 to 27, Dreamforce is November 18 to 21. Both events are Moscone Center.

54:27 – What customers are saying

58:42 – Q & A

Tweetstream via Storify

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions. However, happy to correct any errors upon email receipt.

Copyright © 2001 -2013 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience

 

Data to Decisions Future of Work New C-Suite Tech Optimization Digital Safety, Privacy & Cybersecurity Innovation & Product-led Growth dell HP netsuite SAP SoftwareInsider salesforce IBM Oracle Microsoft Leadership SaaS PaaS IaaS Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP CCaaS UCaaS Collaboration Enterprise Service Chief Customer Officer Chief Executive Officer Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer Chief Experience Officer

Oracle's Cloud Disruption Webinar Recording

Oracle's recent partnership announcements to supply Oracle technology to key cloud vendors such as Microsoft, NetSuite, and Salesforce.com create serious implications for the market.  On June 28, 2013, Esteban Kolsky, Holger Mueller, and R "Ray" Wang discussed the implications  of Oracle's recent partnerships for: Salesforce customers Microsoft customers NetSuite customers Oracle customers Cloud competitors such as Amazon, Google, IBM, SAP, VMWare, and Workday Join us at Constellation's Connected Enterprise, October 30 - November 1, 2013 http://connectedenterprise.ontrackevents.com/home.cfm Webinar recording (sorry, audio only at this time. If you require the slides, please send your request to Courtney[at]ConstellationR[dot]com)

Webcast Index

00:00 - This webinar is over subscribed!!

01:12 - Introductions of Esteban Kolsky and Holger Mueller w/ host R "Ray" Wang

01:40 - April Fool's joke gone live?

01:53 - Oracle's Earnings Call and Larry Ellison's "Leak"

04:05 - Oracle Microsoft partnershp "When hell freezes over - Oracle Databsae in Azure and Hyper V running Oracle database?"

09:16 - The flavors of Cloud Computing

14:34 - Oracle sneaks out Oracle Database 12c

21:23 - Netsuite's Partnership With Oracle HCM abnd Deloitte

25:57 - Are we going back to closed models instead of the open cloud?

29:13 - And now a word from our sponsor... Constellation's Connected Enterprise October 30 to November 1, 2013 San Franicsoc, CA- Register here

30:19 - Salesforce - Oracle "Bromance or Betrayal" the Larry Ellison and Marc Benioff Telenovella

34:06 - Is this about succession planing for Oracle's Larry Ellison?

35:26 - Why not IBM, Dell, HP? Will we have a walled garden of #cloud?

39:43 - Impact on SAP HANA

42:26 - The story of Tom Siebel's one trick pony and demise, why the "better together" strategy w/ Oracle ERP

47:08 - Is it the end of multi-tenancy as we know it?

49:35 - What does it mean for customers? Axis vs Allies

54:00 - Event Plug: Oracle Open World is September 22 to 27, Dreamforce is November 18 to 21. Both events are Moscone Center.

54:27 - What customers are saying

58:42 - Q & A

Tweetstream via Storify 

Data to Decisions Next-Generation Customer Experience Tech Optimization Digital Safety, Privacy & Cybersecurity Innovation & Product-led Growth Future of Work dell HP netsuite SAP salesforce IBM SoftwareInsider Oracle Microsoft SaaS PaaS IaaS Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP CCaaS UCaaS Collaboration Enterprise Service Chief Customer Officer Chief Executive Officer Chief People Officer Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer

Ruminations on Oracle, Microsoft, Salesforce and Those Deals

1

I wish I could get a penny for each time I was asked in the last week or so what I thought of Oracle’s new GTM (go-to-market) strategy.

I have said this many times but I finally have some time, 30 minutes or so, to sit down and write it (if you read this before 10 AM on Friday June 28th, we are doing a webinar about this – sign up here).

First, this is Oracle’s strategy and the rest of the participants have different reasons to agree to it: Microsoft cannot, reportedly, get SQL Server running well enough on Azure and needs a powerful database; Salesforce’s future (as it has in the past) depends on negotiating good licensing rights for the Oracle database that powers their solution and platform; Netsuite – well, it’s eighty-percent owned by Oracle’s CEO Larry Ellison.

Dispel any myths you may have about a collusion or cartel being formed between the many different vendors – this was mostly done for the benefit of Oracle.

Oracle came from a pretty — well, not-so-good year.  Following billions of dollars in acquisitions of cloud properties, more invested in becoming a cloud player, time and efforts in bringing Fusion applications to market, and a failed attempt at becoming cloud-ready doubts and questions continue to emerge around them.  Listening to the last quarterly call (also end of the fiscal year call) showed that there is no love lost between Wall Street and Oracle – and they had to do something.

From that perspective, this was a brilliant move: it brings the largest players in the cloud world to collaborate / co-opete (hate that term, but it applies) with Oracle in an attempt at taking over the world of cloud.

However, this is a bad move for customers (at least the ones that are not too busy deploying a “private cloud” – which its a misnomer that means “lazy CIOs” – to notice).

First, it sets back the movement to build an open cloud infrastructure for customers by potentially nine years, if not longer (that is the length of the deal with Salesforce, the de-facto cloud standard until now).  By locking in the largest cloud proponents into their “cloud-in-a-box” strategy (which, although not mentioned continues to exist as a strategy heavy on end-to-end engineered systems and private clouds) Oracle has essentially become the provider of cloud solutions for the next decade.  And, by extending existing licenses to operate in that cloud, it continues to lock-in customers for another ten years into an archaic and abusive licensing model (which, is the same used by most of the other vendors – so it is not exclusive to Oracle).

The potential to break away from this model and use an open, public cloud to leverage the best solutions out there into an integrated, pay-as-you-go, value-based solution quickly dissipates.

Second, it positions Salesforce as the most important solution for cloud out there.  This is not a big problem for those people who believe that Salesforce was already a cloud provider, but in fact their approach of delivering SaaS and PaaS layers together in their applications is not very “cloud like”.  Although their strategy to continue to grow Force.com (which I have referenced in writing several times before) and their platform business was a good show-of-force towards embracing an open cloud model, I am not sure yet how this deal will slow down or derail those efforts.  This still remains to be seen (and not a lot about it is coming out from Salesforce’s camp); my main concern is that this will considerably slow or stop Salesforce’s efforts to implement a three-tier open cloud model, and being the leader in cloud it would put a severe barrier on the way to that model for other vendors and customers..

Third, Microsoft and Oracle, indirectly, concede it has been a hard road to cloud (and one that is not yet finished).  Although initials reactions (for Microsoft) would be that bringing in a third-party database into their cloud makes it more open and extensible, in reality they are merely conforming to Oracle’s view of the cloud as another expansion layer in their move to rule the world.  In the five or six years Microsoft has been trying to bring Azure to life (which is only slightly longer than the time that Oracle has spent trying to bring Fusion to life) there have been few true successes (ibid for Oracle and Fusion).  The migration from existing enterprise software vendor to the cloud can be best exemplified by the results both of them experienced, and the willingness to embrace a “private cloud” solution to bypass many of those problems.

The biggest problem, aside from the potential headaches it brings to each of these vendors customers trying to figure it out, is that it creates a two-cloud system for enterprises.

On one hand, the continuation of the triumvirate’s control of the not-so-open cloud strategy, which in spite of being a good-enough first step to embracing an open cloud model is not a final solution, delays investments and plans to embrace a totally open cloud model.

On the other hand,it positions the vendors that have been building in that open cloud model (of which probably Workday and Sugar CRM are the most notables in the CRM world) in a situation where they need to figure out a way to positions themselves in a separate world (or concede defeat and embrace Oracle’s private cloud model).  Either way, adoption of these solutions by enterprises committed to the Oracle vision for the world is becoming more challenging.

Finally three closing thoughts, although i could go on forever – but feel free to contact me for more discussions:

1. This does not mean that Oracle will give up selling RightNow, Inquira, and the other acquisitions they made around CRM.  They expect to make a lot more than $900 million (what Salesforce is paying) over the next nine years selling those products.  As a matter of fact, expect a more aggressive selling strategy from Oracle in the next year for those products.
2. Salesforce will not embrace Oracle 12c to run their solutions.  If you ever built a product, especially about fifteen years ago as Salesforce did, you know that changing databases is not that simple.  The amount of work they have done in customizing, optimizing, and extending what their current database can do is never going to be replaced by a new out-of-the-box solution.  There is so much work to do (my best guess would be a complete rewrite of all applications and platforms, a different architecture, and a brand new deployment model) to do that, that it is not  feasible for Salesforce to do it.
3. There is little more to this deal than a move to lock-in existing revenue and licensing models by three of the largest holders of enterprise software licenses (well, there is great marketing – but that is another topic).  There is no innovation, no integration, and certainly no willingness to help their end users innovate and improve how they approach enterprise software.  There is another decade of licensing solutions in a way that benefits vendors over users, and of securing revenue levels as we have seen in the past decade.  And for three publicly-held companies, that is never a bad thing.

One more thing.  There is a little discussed aspect to this, and something that I am not very clear on yet – but it could be an incredible thing.  Until now Salesforce had been forced to curtail the power of Chatter due to licensing restrictions (especially when it came to accessing and contributing knowledge and data for non-Salesforce users).  A little bird told me, and it was not on Twitter, but I have not confirmed that this deal gives Salesforce the ability to offer a full chatter solution to all of their users (whether corporate or not).without regards for licensing.  If this is true, this is a fantastic deal for Salesforce and one that could certainly accelerate adoption of Chatter (although,on the counter side, it would be within this “private cloud” architecture).

Many questions remain in all aspects, but we now need to wait how the deal progresses before we can answer them.  From where I stand, today, this is a good deal for the three vendors, a poor and uncertain long-term picture, and a lot of uncertainty and confusion from customers in the next six months as these deals get put into practice.

Stay tuned.

disclaimer: Microsoft, Oracle, Salesforce, and SugarCRM have all been or are customers.  Netsuite has never been a customer, but has always graciously invited me to their event and covered expenses for the past three years. Workday has never been a customer, nor are they likely to become one in the short term.  Any other vendor mentioned could or could not have been a customer – but at the end of the days it does not matter… these are my opinions and they are not influenced by any vendor or customer – even if they don’t renew contracts or terminate current contracts earlier.  They will remain my opinions even when I am broke and bankrupt.

News Analysis: Adobe Acquires Cross Channel Marketing Expert Neolane For $600M

Gavin Heaton

Founder
Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. ...

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On June 27th, Adobe announced a letter of intent to acquire Neolane for $600M.  Neolane is a privately-held, French headquartered marketing automation software company with 47 of the top Fortune 500 companies as customers.

Marketers now think less about "digital marketing" and more about how to market in a world driven by digital engagement, interaction and commerce. The shift to digital has seen 20% of ad spending move to the digital domain, and is expected to reach over $50 billion in the US by 2015. And with 64% of advertisers planning to increase their paid social media ad budget and strong overall ad budget growth expected through 2015, the need for cross-channel analytics and automation is becoming pronounced.
 
For existing customers of Adobe, this has become a whole lot easier from today. With the announcement that Adobe is to acquire Marketing Automation leader, Neolane for $600 million in an all-cash transaction, real meat has been added to the Adobe marketing automation bone.

Forming part of the Adobe Marketing Cloud, integration plans will begin from today with the transaction expected to close in Q3 2013.
 
Marketers may not realize it yet, but the only way that they can deliver on their customers expectations is to begin investing not just spending. And a core part of this investment through 2015 is to establish scalable marketing platforms, that deliver right time insight, robust analytics and cross-channel capabilities.
 
What this means for Adobe. 

Powerful segmentation, cross-channel segmentation augments the Adobe Marketing Cloud.
The consumer master data record was one of the major benefits of the Neolane platform.  Combining anonymous and known data will connect the dots between customer data, activity in channel and behaviourwhich is where the Adobe Marketing Cloud’s sweet spot lays.
 
The fact that Neolane also operates from a single, unified code base has obvious integration appeal from Adobe’s point of view. This should allow a more rapid integration of the Neolane functionality into the Adobe platform.
 
Neolane’s strong client base also provides Adobe with a stronger route to market in EMEA.

The Neolane team will continue to report into CEO Stefane Dehoche. Stefan will report into Brad Rencher.

What this means for Neolane.
Neolane’s strong business performance in 2012 - with 40% consolidated growth - largely led by North American market push - will benefit from the acquisition. This deal extends the Neolane footprint providing access to the Adobe partner network. This will help the push into the large/enterprise segment and see the Adobe Marketing Cloud go head to head with Salesforce, IBM and Oracle.
 
What this mean for customers.
In Constellation Research’s Scaling Up with Marketing Automation Software - market overview report, Neolane was consistently ranked among the leaders in the industry. The gaps in their offering dovetail neatly with the strengths offered in the Adobe Marketing Cloud and combined, they represent a powerful change in the industry landscape.
 
Combine this acquisition with the recent Marketo IPO and Oracle’s purchase of Eloqua, and it shows not only consolidation across the market but a strategic strengthening of the offerings in the marketing platform space. With this deepening will also come a maturing in the market both in terms of platform buying and process automation.

Customers can expect:

• One record to rule them all. Connecting the dots between known and unknown customers delivers significant value not just to marketers but to a whole business. Bridging the various social, digital, customer service and sales profiles that are required by the modern enterprise has contributed to the fragmentation of roles and the wasting of budgets. The use of a customer master data record opens the door to the “whole of customer” view which is not just an aspiration - but is like the marketer’s ring of power.
• Lead nurturing and scoring to reduce funnel leakage. In complex sales cycles, the buyer's journey can take months or even years. Reducing funnel leakage through automated scoring of prospects against customer segmentation data and audience profiling provides light touch marketing that can increase lead quality and improve yield on marketing campaign investment over time. The new Adobe Marketing Cloud - combining the strength of Neolane with Adobe Analytics (f.k.a. Omniture) - provides marketers with the decision-ready analytics that help optimize cross-channel marketing programs
• Consistency of user experience to drive adoption: Business users already familiar with the logic, systems and interface of the Adobe Marketing Cloud will be able to transition easily to the integrated suite. Existing internal supporters of the platform become change advocates and further spur internal adoption and rollout through enterprise marketing teams. This, in turn, will lead to accelerated ROI
• Connecting the Creative and Marketing Clouds to bridge the worlds of design and execution: The widespread use of Adobe Creative Cloud in the execution of marketing campaigns has the potential to make the job of marketing execution much more streamlined. And in a world of right time and near-real time marketing, combining the creative and marketing clouds could provide not only market leading responsiveness - but game changing competitive advantage
• Accelerated return on investment to improve value in marketing efforts: With change champions and wider acceptance within the user community, organizations see accelerated return on investment (ROI) as use cases proliferate and uptake is spurred.

What this mean for consumers.
Today’s connected consumers don’t care about a business’ digital strategy. They don’t care about your mobile strategy. What they care about is the products and services that are delivered and the consumable experience that is packaged as part of that delivery. The promise of marketing platforms is that some of the clunkiness of branded experience will disappear - and that the experience will become seamless and ubiquitous. Removing the friction in the customer experience is transformative.
 
The Bottom LIne: Expect more convergence in marketing, customer experience, and digital business transformation
For some time we have been tracking the shift away from the B2B and B2C classifications of marketing to what is essentially peer-to-peer (P2P) marketing. While this is essentially an innovation driven by consumers, this kind of acquisition helps marketers to respond to that market demand.

Like all acquisitions, the success of this will be driven by the ability of Adobe to integrate the substantial benefits and features that Neolane offers. As the deal closes and new combined product roadmap begins to take shape, this combined offering represents significant upside not only for existing Adobe and Neolane customers, but for businesses seeking greater value from their marketing investments.

Marketing Transformation Matrix Commerce Next-Generation Customer Experience New C-Suite Revenue & Growth Effectiveness Innovation & Product-led Growth Data to Decisions Tech Optimization Future of Work Digital Safety, Privacy & Cybersecurity adobe Marketing B2B B2C CX Customer Experience EX Employee Experience AI ML Generative AI Analytics Automation Cloud Digital Transformation Disruptive Technology Growth eCommerce Enterprise Software Next Gen Apps Social Customer Service Content Management Collaboration Leadership Chief Customer Officer Chief Marketing Officer Chief Experience Officer

The What? When? Why? and How? of Enterprise Collaboration

Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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Here is my interview with BizTech 2.0 TV, where I discuss enterprise collaboration.

0:00 - 1:53 : Evolving from generic collaboration to making social features part of the way people work. Choosing the right tools and learning when and how to use them.
1:54 - 3:24 : Using collaboration tools internally among employees
3:25 - 4:19 : Extending collaboration externally to partners, customers, etc.
4:20 - 5:40 : Why (and how) should an organization get started using collaboration in the first place? CxOs should outline what problem they are trying to solve first.
5:41 - 6:47 : Breaking down silos, sharing information across your organization - connecting employees - working together for the success of the business
6:48 - 7:57 : What challenges prevent success with collaboration tools? Integrated corporate directories, on-premises vs. cloud
7:58 - 9:00 : The marriage of social and big data. There is more noise in social than there ever was in email. Analytics can help recommend the right people, pages, communities, and provide sentiment analysis.

Future of Work Innovation & Product-led Growth Tech Optimization AI ML Machine Learning LLMs Agentic AI Generative AI Robotics Analytics Automation Cloud SaaS PaaS IaaS Quantum Computing Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP CCaaS UCaaS Collaboration Enterprise Service developer Metaverse VR Healthcare Supply Chain Leadership Chief Customer Officer Chief Executive Officer Chief People Officer Chief Marketing Officer Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer Chief Digital Officer Chief Analytics Officer Chief Operating Officer

Act III - The cloud changes everything - Oracle and NetSuite with a Touche of Deloitte

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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Continuing the spree of expected announcements, it was the unveiling of the Oracle and NetSuite partnership today. True to the leak from the Q4 earnings call last week Thursday, this week we saw Oracle partnering with Microsoft on Monday, Salesforce.com on Tuesday and now NetSuite on Wednesday. What will Thursday bring?

We have shared our takeaways from the Microsoft and salesforce.com partnership announcement already so let's dissect this one:

Takeaways from News Facts

Oracle and NetSuite announced a strategic alliance focused on plans to deliver integrated HCM and ERP Cloud Services for mid-size customers.

My POV
Surprisingly this partnership is all about HCM - and no mention of any Oracle technology products. Something that was more or less expected after the earlier announcements of the week. But then using Oracle technology at NetSuite does not come at a surprise, as the company has been closely held by Larry Ellison and has been using the Oracle tech stack extensively in the past. Instead the focus on HCM is an exclusive enterprise application focus. 


But ultimately the HCM topic is also not surprising since HCM took a lot of space at the last NetSuite user conference, only that back then NetSuite planned to partner with a number of different HCM vendors, tribeHR being the most prominently featured one. And this may still be the direction going forward - only that now there are Oracle HCM products in play. 

Traditionally NetSuite has focused on small and medium businesses (SMB) - not the focus for Oracle HCM indeed Oracle partners with NetSuite for SMB business. We will have to see how the Oracle HCM offering can scale down both process and cost of ownership wise.

Deloitte plans to work with Oracle and NetSuite to develop a practice with highly skilled practitioners specializing in tools and implementation services to help customers adopt the soon to be integrated SaaS technologies faster and more seamlessly.

MyPOV
And then there is the touche by Deloitte - pun intended - which has one of the largest HCM practitioner and consultant teams - providing the necessary implementation services for the combined offering. This puts Deloitte in the driver seat as in regards of getting a piece of the implementation business for the new combined offering. I would expect Deloitte to provide also a significant number of hands to build the integration. This will aide Deloitte's credibility and help NetSuite on the resource side, where I see their product development team stretched quite thin (see findings from SuiteWorld here).  

Additionally, Oracle plans to develop a product integration and go-to-market strategy with NetSuite for Oracle HCM Cloud and NetSuite Cloud ERP to deliver a single, integrated solution that seamlessly connects HR and finance systems for mid-size customers. 

MyPOV
And finally true to yesterdays announcement with salesforce.com, which pleaded for the pre-integration of SaaS solutions, created and maintained by the vendors - the same is provided in the NetSuite and Oracle HCM case. 

Takeaways from Alliance Section

Mid-size customers can gain a competitive advantage by quickly implementing SaaS solutions at a lower cost.

Oracle HCM Cloud including Global HR and Talent Management, combines advanced technology, tight integration, best HR practices, and social capabilities.  From recruiting and managing talent, to accurately forecasting future workforce needs, Oracle HCM Cloud enables companies to proactively manage HR operations while focused on strategic business initiatives.

NetSuite Cloud ERP offers an integrated solution that connects a business across financials, sales, service, and fulfillment.

MyPOV
No surprises here. Just expected NetSuite to also mention manufacturing, which was a big push back at SuiteWorld

For large organizations where Oracle HCM is already deployed, two-tier deployments of NetSuite in smaller subsidiaries will easily connect with its Corporate HR system.

MyPOV
This is to be interpreted that the two tier ERP pitch with NetSuite being used for smaller subsidiaries of larger corporations, who run Oracle in the large organizations - is alive and well. But it also makes clear, that HCM in the case will be run centrally and globally. Certainly a cost advantage, but as mentioned, we will have to see, that Oracle HCM is not a to expensive solution to implement for the smaller subsidiaries. And then it may pose some interesting integration challenges between Oracle HCM and NetSuite in the subsidiaries. 

Deloitte has a business-driven HR approach, global reach, functional depth and SaaS experience to accelerate both the business value associated with HR and ERP transformations, as well as process and technology cost saving efficiencies.

MyPOV
Ok - this translates into a preference for Deloitte doing the first integration work, but I am sure if customers insist on an other SI, that would not hinder a deal from being closed. SI differentiation - even with an early placement in a partnership like this - remains a challenge for the SIs. 

Takeaways from the quotes

"Driving the development and retention of the right talent, and getting strategic data around HR practices can help mid-size companies transform their business operations," said Oracle President Mark Hurd. "NetSuite and Oracle are now working together to provide access to Oracle's leading enterprise-level cloud-based HR & Talent Management solutions that are integrated with NetSuite's Cloud ERP suite applications. With Deloitte implementing these integrated solutions, mid-size companies can quickly gain access to an incredible new level of HR management that can help impact their bottom line."

MyPOV
No HCM event without retention and flight risk mentioned in 2012 / 2013. There is a touche of Deloitte in this - but no exclusivity statement. 
Side comment for the PR pros - this press release comes from NetSuite - so it's unusual for the partner to be quoted first, usually the issuing entities executive has the first quote. 

"We are excited to work with Oracle to bring customers an integrated solution that combines NetSuite's solutions that automate business processes with Oracle's suite for managing people processes," said Zach Nelson, CEO of NetSuite. "Customers will benefit from the commonality of the products' underlying Oracle-based architecture and the enormous investment in R&D and customer service that both companies bring to the table."

MyPOV
While Hurd did not use integration, Nelson uses it once, like Benioff yesterday. Nothing compares to Ellison who used it three times in its quote yesterday. But yes integration is key and customers expect it these days, out of the box. 

Interesting Nelson states the commonality - which is hard to see today. For a business user that usually means user interface - but these are differing quite extensively today. If both Oracle and NetSuite wanted to change that - it should have been announced. Behind the scenes commonality usually means architectural harmony - and though both NetSuite and Oracle HCM are build on the Oracle technology stack - some harmonization in utilized products and versions would have to occur. This is equally a point both companies should have mad clear today. 

"Mid-sized companies are looking for solutions that allow them to be nimble and respond quickly to market opportunities," said Jim Moffatt, CEO of Deloitte Consulting LLP. "This newly integrated solution will help these organizations deliver better service at a lower cost, ultimately giving them an edge in the war for talent and a true competitive edge."

MyPOVIt's somehow ironic, that the two product executives - Hurd and Nelson - leave it to the service executive to stress lower cost of ownership and better service from an integrated solution. In the past these service provider involved offerings usually have not materialized in too much business for the involved service provider - but we will see how well this works for Deloitte in this case. Let's not forget Deloitte has been partnering with Workday for a while.

Absence of technology and hardware

To some point surprisingly there is no reference to any Oracle technology products. In my view that's not a bad thing, as the expectation is, that NetSuite is using these to the best of their capabilities already. So mentioning here may have been degrading to their reputation. But there is also the possibility that the technical nature of the integration is not sufficiently hashed out yet.

I noticed gladly that the Twittershere and pundits did not lament the lack of hardware related commitments in this announcement - as it is the same as with salesforce.com - if needed NetSuite will use Exaxxx to their advantage. No need to add to this press release. 

Workday angle

A lot has been written and said about Oracle doing all these partnership to isolate Workday. Not so much in my view. Workday has not focused on SMB like NetSuite and the companies did not partner for any offering. And I don't see how it is easier for NetSuite to sell against Workday given the partnership with Oracle for Oracle HCM. Customers will decide which of the two is the better HCM product - Oracle HCM or Workday - irrespective of NetSuite. What NetSuite and Oracle could do (like SAP and Infor, too) - is to provide enterprise process level differentiators out of the box, that combine HCM and other enterprise processes. Workday would have to enable the same via interfaces. 

But HCM is hot and drives enterprise automation

Across enterprise automation - HCM  is certainly the hottest area. We know that since SAP and Oracle invested into buying SuccessFactors and Taleo. So vendors without a HCM strategy - need a HCM story quickly. See salesforce.com yesterday, see NetSuite today. And market pressure most be so high, that NetSuite could not afford to wait for their many partnerships announced at SuiteWorld, to come to fruition. And certainly integrating six and more partners is also a bigger product investment.

MyPOV

While Oracle is now being understood as a provider of cloud technology, today's announcement makes Oracle also a provider of critical SaaS functionality. If you will, the partnership week started with technology only (with Microsoft) to a mix (with salesforce.com) to an applications only (with NetSuite. The salesforce.com partnership certainly can question Oracle's investment in CRM products. But don't expect for a second that Oracle would stop CRM investments. Instead Oracle is working hard to provide the next generation of CRM tools in the area of customer experience and marketing. 

For NetSuite this alliance fills the current void in the HCM area, that was something the company only was able to close through partnership - given the recent love and with that investment focus of manufacturing.

So overall again a good move by Oracle and a good outcome for Netsuite. We look forward to learn more on the nature and extent of the integration and of Deloitte's role in detail. 

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Act II: The Cloud changes everything - Oracle and salesforce.com

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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This morning, as expected, the next partnership announcement of Oracle came out, after Monday's partnership announcement with Microsoft (our analysis here and here), it was Salesforce.com's turn today. It was expected to happen this week as Oracle's CEO Larry Ellison pre-announced these partnership during Oracle's Q4 earnings call last week. 

Here are the takeaways from the short press release: (all emphasis added)

MyPOV
Ellison and Benioff mention integration four times in their short statements, Larry beating Benioff 3:1, not surprisingly as Oracle has been honing the integration message much longer than salesforce.com. But we think that both CEOs are on the right path - customers expect simplicity (Benioff), rapid low cost implementatoins and out of the box working integration (Ellison).

Oddly Parker Harris gets an unusual 3rd quote in the short press release, as these are usually balanced afairs - but he raises the key value drivers that in our view have led to this partnership: More efficiency and ultimately lower Total Cost of Ownership (TCO) to run a cloud infrastructure.

So why?

Oracle must have something, that these days every cloud company seems to want - a reliable database, an attractive technology stack and first of all a very attractive TCO. 

At OpenWorld in 2012, when Oracle unveiled 12c, this slide caused some uproar in the database community:

There was a reasonable debate if the use case was realistic etc - but at the end of the day, if with 12c savings from the confusingly multitenancy labelled feature are only 20% of what Oracle claimed, then Oracle 12c is a huge TCO saver. The famous no-brainer to implement. And very compelling for Oracle customers (like salesforce.com) or vendors with a database problem when turning to the cloud (like Microsoft). 

And while the rumor is out there, that this is a 9 year deal and salesforce.com is paying something in the area of 300M US$, it's still a good deal financially for salesforce.com. Quick back of napkin calculation: 9 years are 108 months, let's make it a 100 months for easy math, meaning salesforce.com pays about 3M US$ per month for using Oracle's Database, and more. Assuming it would just be the database - not a bad number, if you look at the alternative (see below). And salesforce got more - Java Middleware, probably some Exadata and possibly even the usage of the Fusion Apps. 

The alternatives for Salesforce.com were limited

Of course salesforce.com could have staid where they are today. But then it would have surely spend more on running its current cloud technology stack. And the Oracle part of that would be aging quickly. And salesforce.com has always been on the lastest Oracle database releases as soon as they could be confident to run the release. And there is a benefit to be current.

From the scale that salesforce.com runs - with north of 1B transactions - the only option would have been IBM. But similar to Microsoft  which faced a similar due diligence questions - it ended up with Oracle. Like in yesterday's post - the praise goes to Andy Mendelsohn and his team.

Market implications

Oracle gets a design and marquee win - the largest SaaS vendor in the market. And a potential reseller or joint sales engagement partnership at SAP customers, where salesforce.com is very successful at selling into. At the same time Oracle is the database of choice in all large clouds, but one (Google). 

Salesforce.com can put away some key technology decisions, they are taken for the next 9 years and likely longer. And it gets an cloud ERP option to counter enterprise scale arguments in competitive engagements with SAP. Personally I would expect the salesforce.com account manager to have the roadmap for the joint salesforce.com CRM and Oracle Fusion App in every slide deck when competing with SAP. 

Customer implications

When two larger cloud players agree to better integrate their products their customers win. When they choose solid technology as their foundation, and when the products of that foundation get hence more usage - customers win again. 

It will even give SAP and Infor customers (just to mention the other 2 players out of the Top 4 enterprise application vendors) - more options on what to deploy for their enterprise automation products. And an overall positive trend when the CEOs of two key cloud players see lower operating cost and pre-built integration as key trends they need to address going forward. 

MyPOV

We have seen act II for the Oracle composed The cloud changes everything piece. Who would have thought the sudden amicable relationships respectively for Oracle and Microsoft and salesforce.com would come up - ever. Even though behind the scenes these companies have long standing support and development relationships. 

The cloud seems to make a lot possible these days. 

Have a look at my colleague's take of this, Frank Scavo - here - he sees the great detente. And I always enjoy Dennis Howlett's take on this over at Diginomica.

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How Design Thinking Can Make You a Better Leader

This is a summary of Tom Kelley's keynote speech at Constellation's Connected Enterprise 2012, Beyond Innovaton: Design Thinking. Register for this year's Connected Enterprise for more inspirational keynotes: REGISTER

We're all familiar with design thinking whether we know it or not. As citizens of  the 21st century, we have all touched, seen, purchased a product created via the design thinking process. Design thinking is a method of production that employs design principles to turn out products that are notoriously intuitive, attractive, functional, and ergonomic. Apple products, for example, are a product of design thinking. 

Great. So design thinking turns out amazingly functional products. But can the same principles responsible for great products also produce great leaders? 

According to Tom Kelley, co-founder of IDEO design consultancy, yes, they can.

Applying design thinking to leadership

Creativity, according to Kelley, is a trait essential to success in any industry. In 2012, a survey of chief executives revealed creativity to be the most important trait of leaders today--and everyone possess it. While everyone possesses creativity, only 25% of survey respondents feel they have reached their creative potential. This means the business world is sitting on a creativity reserve of 75% of the whole! Enter design thinking. Design thinking enables leaders to unlock creative confidence to become more effective leaders. Leaders with creative confidence possess, both, the ability to conjure new ideas and the courage to test those new ideas. When a leader unlocks their creative confidence, the effect is contagious--teams led by creatively confident leaders are empowered to be creatively confident themselves. The infectious nature of design thinking transforms teams into agile, open, and innovative groups - thereby making their leader a great one. 

Cultivating creative confidence in 3 easy steps

Creative confidence is the ability to conceive creative ideas coupled with the confidence to act upon those ideas. Here are Kelley's three steps to cultivating and instilling creative confidence. 

1. Always start with empathy. A classic design thinking practice. Approach every situation with empathy for context to ensure you're on the path to solving the right problem. Tom suggests you focus on analyzing the behavior of an individual rather than a group. 

2. Take time to daydream. Ever heard of the shower theory? Your most striking moments of genius can come to you when you're completely relaxed and disconnected. Tom keeps a whiteboard marker in his shower so he can capture ideas during these moments. He suggests taking five minutes every day to daydream. 

3. Defer judgement - of others and self. As a leader, hone your encouragement and constructive criticism skills. The last thing you want is to discourage your team from bringing you new ideas. If an idea seems half baked, "master the art of squinting" - squint to uncover the bones of a good concept, and allow your team to flesh out the rest of the idea. Encourage where encouragement is merited--you'll see more ideas. 

Now go forth. Create, ideate, encourage, and lead--innovatively. 

Watch Tom Kelley's full keynote address at Constellation's Connected Enterprise 2012

Tom Kelley - Connected Enterprise 2012 from Constellation Research on Vimeo.

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Oracle and Salesforce.com: The Great Detente

President, Computer Economics and Strativa, Inc.
Computer Economics and Strativa, Inc.

Frank Scavo is skilled at formulating and communicating IT strategy, developing the business case for new systems, and facilitating the selection of enterprise systems, such as ERP, CRM, and supply chain management. He is also an expert in benchmarking IT spending and staffing levels for end-user IT organizations. Frank was one of the first tech bloggers, beginning in 2002 with his launch of the Enterprise System Spectator providing independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them. Frank has been quoted as an IT expert in numerous business and industry publications such as the New York Times, Wall Street Journal, Computerworld, CIO Magazine, ZDnet, eWeek, Datamation,…...

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Salesforce.com and Oracle today announced a "new strategic partnership." For their mutual customers, the announcement represents a welcome thawing of relations between the two companies. But it remains to be seen whether it represents a strategic change of direction for Salesforce.com.

Not a Radical Departure for Salesforce.com

The press release is quite short, just five paragraphs, outlining five points of partnership:

• SFDC will standardize on Oracle Linux.
• SFDC will deploy Oracle's Exadata engineered systems in its data centers. 
• SFDC will deploy the Oracle Database and Java Middleware Platform as part of its cloud infrastructure.
• Oracle will integrate salesforce.com's cloud apps with Oracle’s Fusion HCM and Financial Cloud.
• Salesforce.com will also implement Oracle’s Fusion HCM and Financial cloud apps for its own internal use.

So, what exactly in this announcement represents a fundamental change in direction for Salesforce?

• SFDC's infrastructure is already based on Linux, so standardizing on Oracle Linux is a minor change.
• SFDC's applications already make use of Oracle's database as the lower-level physical data store.
• The press release provides no detail on how SFDC will make use of Oracle's Exadata boxes. If they are merely used to replace commodity storage devices, there would not be any change to the basic architectural design of SFDC's infrastructure.
• Oracle's integration of Fusion HCM and financial system with SFDC is merely an application integration initiative. 
• SFDC's implementation of Oracle Fusion HCM and financial applications is a routine "win" announcement. 

The second bullet could potentially be the most radical departure for SFDC. Oracle's new database release, 12c, could provide the capability for SFDC to run multiple pluggable databases (one for each customer) within a single container database. This would represent a fundamental shift for SFDC away from its single multi-tenant database architecture in favor of Oracle's pluggable database approach.

Nevertheless, the fact that there is no mention of 12c or pluggable databases in the press release makes me seriously doubt that SFDC intends to fundamentally change its platform architecture. I have a question pending with SFDC on this point and will update this post if and when more information becomes available.

Thawing of Relations

What I do find significant in this announcement is that Oracle and Salesforce.com have apparently buried the hatchet, at least for now. For their mutual customers, now and in the future, this is good news.

Customers are not well-served by vendors sniping at each other, and the verbal tiffs between Benioff and Ellison over the past few years, frankly, have become annoying. Hundreds of customers have interfaced Oracle Applications with Salesforce.com's cloud apps. But until now they have done so without the explicit support of Oracle. Customers will be pleased if the two companies can cooperate in providing standard integration. Hopefully, both parties will start acting like adults and doing what is in their joint customers' best interest.

Workday Is Odd Man Out

If there is a competitive target in this announcement, it has to be Workday. SFDC will implement Oracle’s HCM and will integrate its Sales Cloud with Oracle’s HCM and also with its Fusion Financials product. This puts Workday in an awkward spot in that Workday leverages Force.com for its platform-as-a-service capabilities. It will be interesting to see how Workday reacts to this détente between Oracle and Salesforce.com.

While the use of Oracle Fusion within SFDC doesn’t mean much to SFDC customers, it does give bragging rights to Larry Ellison against Workday. Interestingly, NetSuite's CEO Zach Nelson was recently taking pot-shots on stage at Workday during NetSuite's Suiteworld conference. At the time, I took it as a sign of Workday's competition with NetSuite in financial applications. Now I see it as part of a wider competitive alignment. Both Zach Nelson and Marc Benioff are Oracle alumni and both have close ties to Larry Ellison. The three now seem to be joining in solidarity against Workday and validating that Workday is a threat to all three.

Regardless of the competitive posturing by these major enterprise technology providers, the Oracle/Salesforce detente is welcome news for customers.

Update, 11: 30 a.m. PDT. Dennis Howlett spoke with Aneel Bhusri, co-CEO Workday, who says that he doesn't anticipate any impact from the Oracle/SFDC announcement.

Update, 12:15 a.m. Salesforce.com replied to my inquiry indicating they are unable to provide additional details at this time on the announcement.

Related Posts

Oracle Fusion Runs Into Oracle Apps Unlimited
Oracle's Behavior Undercuts Its Own Cloud Accomplishments

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News Analysis: Oracle’s Cloud Strategy - Revisionist History or Cloud Genius?

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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This is a joint post with my colleague Holger Mueller who looks at IaaS/PaaS and Future of Work technologies for Constellation Research.

At a press conference on June 24th, 2013 with Microsoft’s CEO, Steve Ballmer, and Oracle’s President Mark Hurd announced a cloud partnership where Azure customers will be able to run Oracle Database (no version mentioned, but Constellation expects this to be 12c), Oracle Weblogic, and Java.

Oracle also announced availability of Oracle Linux for Azure customers. Constellation believes that the deployments of the Oracle 12c, Weblogic and Java stack pieces will be deployed on Oracle’s Linux.  Should this be true, the approach makes sense, as this is a tested and proven hardware and software combination. Further, Microsoft has already begun to run parts of Azure on Linux.

The partnership alliance poses significant implications for both vendors and more importantly customers moving to the cloud for three reasons:

• Java comes to Azure, a sign of pax in the .NET vs Java wars. For Applications to run on Azure, they needed to be built in CLR generating programming languages. Now, with the licensing of Java by Microsoft as part of this partnership, Java applications will run on Azure. This opens doors for Java applications on the Azure cloud, as well as general more portability for Java applications. And Azure becomes a friendly cloud for the 9 million+ Java developers out there.
  
  Point Of View: Microsoft and Oracle strike a win-win here.  Microsoft gains more language derived potential for expanding Azure and Oracle adds a marquee cloud stack to support Java.  Given the substantial overlap of enterprise customers on both Microsoft and Oracle, customers will benefit from more cross cloud compatibility for Java while supporting Azure for IaaS.

• Azure will run Oracle Weblogic and the Oracle Database. Microsoft will support Oracle Linux in Azure as the foundation to run the middleware and the database stack.  Though the press release and the press conference did not specify which Oracle database, Constellation speculates this is for Oracle Database 12c. In addition, Oracle announced license mobility for customers who want to run software on Azure and bring Oracle Linux to Azure..
  
  (POV): Interesting enough when Larry Ellison spilled the news for this announcement during the Q4 Oracle earnings call, this was not about the Oracle Database, but very specifically about Oracle 12c. It’s not clear why 12c is not specifically referenced in the press release – but with the ORacle 12c general availability slotted for June 25h, 2013, this moment may not have been the time to steal the thunder.  Of note, it is not only the database, but also the Weblogic application server which will be deployed on Azure. This comes as a surprise at first, but given the work Oracle has done to integrate the former BEA flagship product with 12c and Java – it was a question of taking whole technology building and avoiding too many interfaces. Why run Java apps through Biztalk to an Oracle database?  Constellation views this as a smart move by both companies, as it allows Azure customers to utilize more of the Oracle products, that are more and more entwined due to the Fusion and Exaxxx products.

• The hypervisor is where Microsoft and Oracle draw a line in the sand. Oracle will support Microsoft’s hypervisor Hyper-V to be the demarcation line between higher level application code and the Oracle products that now run in Azure.  The combined offering will be running on Hyper-V, which creates some headaches for Oracle on the hypervisor level as Constellation predicted, and will be supported by Oracle support as running on Windows Azure. .
  
  (POV): This poses some engineering work for the Oracle hypervisor teams, but nothing impossible to achieve. And the benefits are tangible, Hyper-V built applications will now be able to run on the Oracle Database (12c, and on Oracle Linux). This will give a lot of performance critical (think Dynamics) applications that were limited by SQL Server scalability before, new breathing room.  Microsoft was able to protect higher level applications of its technology stack with this agreement and at the same time Oracle benefits from a whole ecosystem of Hyper-V compatible applications. The cost of supporting Hyper-V for Oracle, which is tangible, is however dwarfed by this additional market potential. And it gives Mircosoft an important leg up against VMware’s vSphere.  Constellation believes this has significant implications in the cloud stack wars among Amazon, Google, HP, IBM, and VMware.  In unusual candidness for these  Oracle listed the current and future deliverables for the alliance in an blog post here.

Why did this happen?

As previously mentioned, this would have been a very good April Fool’s headline – even back on April 1st 2013. So this alliance comes as a surprise pretty much to all industry observers, at least we have not seen anyone claiming to see this one coming.

Constellation can only speculate what has driven Oracle and Microsoft to become frenemies and co-opitors. But the usual drivers are customers and technology. Customers could be the biggest driver for this alliance (e.g. a large public sector client that has standardized on Azure but requires Oracle, maybe for security or scalability reasons).  Why? Oracle has achieved significant and game changing elasticity through the de-coupling of metadata and user storage in Oracle 12c. In the due diligence process Microsoft must have looked at this design point and it must have been clear, that SQL Server would not be able to match this. It will be interesting to see in the months to come, what the real drivers to this alliance have been.

Lastly it necessary to mention that primarily Microsoft, but to a certain point also Oracle are interested in differentiating their cloud offering versus Amazon’s AWS and Google’s GCE. And this alliance certainly helps in this process.

Implications for the market

Over the past decade, Oracle has emerged as the laggard in the cloud market.  VC’s had advised their startups not to build on Oracle to avoid the cost overhead and legacy database technology.  Yet Larry Ellison remains the rare master of Sun Tzu’s Art of War strategies.  In this latest effort, he shows his determination to serve as the arms dealer for cloud infrastructure.  Announcements on partnerships with Amazon,  Dell, now Microsoft and soon with Salesforce.com and NetSuite show his determination to remain relevant in the cloud, albeit very late to the party.

The irony is that it all comes back to the original view of Ellson – that the cloud is nothing else than servers connected to the internet. And to a certain point that is what the Oracle Linux machines with running Oracle 12c, WebLogic and Java will do. Only they will be more elastic than other commercial database offerings, but we will have to see what happens on more detail at the 12c announcement tomorrow.

For the overall cloud market this forms a positive development as amongst the dedicated cloud stack vendors – AWS, Google, Microsoft and Oracle – this forms a level of reuse and commonality that previously has not been thought to be possible. Java applications now run on all of the four aforementioned cloud stacks. The Oracle database runs in all but Google. As does Oracle Linux (we assume that’s also how AWS deploys Oracle). So we are not at all at a time of interoperability – but this alliance is certainly propelling the cloud further in these terms.

The Bottom Line: The Irony is the Database Back Again?

At the end of the day two veterans of the enterprise software industry, Hasso Plattner and Larry Ellison are re-inventing their companies through database innovations. It looks like enterprises still want and need to store data reliably and efficiently. May it be in memory with HANA or may it be with better overall elasticity for 12c. No mention of cloud. Remarkably both innovations would have been beneficial for their respective companies even in a pre cloud era. So yes, the database is back. And with that a chance to rebuild and re-invent the whole enterprise technology stack upwards.

Our POV: The Cloud Wars Have Just Begun, Customers Poised To Win

This is the positive announcement expected over the weekend. The cloud sure makes strange bedfellows, and is the real driver and winner. Both Messrs. Nadella and Hurd clearly identified that. With the addition of Java to the overall mix, more interoperability has been achieved than customers would have expected and overall this is good news for the cloud, and more importantly, for Microsoft and Oracle’s customers and partners.

Before customers can rejoice, availability, pricing and customer successes must come first.

Your POV.

Ready for the Microsoft – Oracle Alliance?  Will you run Oracle in Azure?  Are you waiting for SQL Azure?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Resources

• Oracle 12c: End of multitenancy as we knew it
• How the cloud can make unlikeliest bed fellows

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 -2013 R Wang and Insider Associates, LLC All rights reserved.
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