According to the confidential memo, Oracle’s routine tactic is to threaten based on incompliance and to maximize potential licensing issues. After that, software licenses and the looming costs of such licenses can be negotiated from such a beaten problem. The result can then be a relatively better than expected amount for the shocked customer, but is not a low amount.
Laundry list of ERP project failures.
Source: Twelve IT Project Disasters Demonstrate There are No “Safe” Choices
Oracle claims that the addition of these and other algorithms typically provide an additional 20% application performance improvement, while simultaneously reducing the memory footprint.
When the new six-month cadence was announced there was some talk about “release fatigue.” Have you seen that in the Java community?
It’s sort of like asking, if your kids had Christmas twice a year, do you think they’d experience “Christmas fatigue?” The parents might, I guess. What I’m hearing people say now is that they are seeing so much evidence that updating to 9 and finding the move to 10 and 11 so smooth, they’re excited about the new cadence and what’s coming down the pike.
These US-based layoffs are part of a broad round of job cuts around the globe this month, said to range from 500 to 14,000 at the database giant. The biz employs about 140,000 worldwide.
All the articles say it’s in the cloud business.
The company said it was saving most of its cloud-native announcements for KubeCon in December, but highlighted its new managed Kubernetes service (OKE, launched in May), platinum-level membership in the Cloud-Native Computing Foundation and growing support of open source projects (e.g., Fn, a functions project; Terraform for Oracle Cloud orchestration) as evidence that it has turned over a new, developer-friendly leaf. Oracle acknowledges a credibility gap with developers, but notes that it is at the start of making a transition similar to the one Microsoft has largely accomplished. As part of this effort, it may pursue acquisitions that give it access to customers that will help change Oracle’s image and shift the culture within the company (perhaps similar to what IBM is hoping to accomplish by buying Red Hat).
Original source: The computational legacy is Oracle’s cloud opportunity today
The outage, which lasted for hours on Prime Day, resulted in over 15,000 delayed packages and roughly $90,000 in wasted labor costs, according to the report. Those costs don’t include all the lost hours spent by engineers troubleshooting and fixing the errors or any potential lost sales.
I assume Amazon has, and will save much more than that by moving off Oracle.
Original source: Amazon move off Oracle caused Prime Day outage in warehouse
Good summary and analysis.
Original source: Oracle OpenWorld 2018 – making the cloud friendly for enterprises that distrust cloud
“Oracle did announce during the earnings call that cloud revenue was $1.7B for the quarter, but failed to break that out between SaaS and the combined IaaS and PaaS, as was previously reported. Also, with BYOL, it is impossible to know if customers are using those licenses in the cloud or on-prem, thereby obfuscating their cloud performance, which is now the number one factor in determining Oracle’s success against its peers. Oracle is claiming customers are deploying BYOL licenses in the cloud immediately, or have plans to do so in the near future, but it is impossible to know for sure.”
Vendors switching from on-prem to public cloud is hella hard, often deadly.
Original source: Oracle Gets Cloudy: What’s Behind Their Change in Financial Reporting?
Should have done cloud earlier.
There’s another angle: when and how does a product manager call/predict a huge shift like traditional, on-premises software to “cloud”?
Original source: Why software giants are failing
“Murphy has told clients that a survey of 154 CIOs revealed negative spending intentions towards Oracle, with CNBC reporting that his note said just 2 per cent of respondents said Oracle was their most integral vendor for cloud computing. In contrast, 27 per cent chose Microsoft and 12 per cent opted for Oracle CTO Larry Ellison’s cloudy nemesis Amazon. The analyst’s note added that CIOs have told the analysts they are migrating off Big Red and onto Microsoft SQL Server, Amazon databases and PostgreSQL.”
Original source: CIOs planning to snub Oracle for other cloudy vendors – analyst
“To sum up, then: Google knew it needed a licence, didn’t get one, and tried to bluff it out.”
Original source: Happy as Larry: Why Oracle won the Google Java Android case • The Register
I’ve never understood what’s going on here. I think it’s that Google decided to arrange Android SDK’s like Java API’s.
Original source: “Google’s use of the Java API packages was not fair,” appeals court rules
I’ve never understood what’s going on here. I think it’s that Google decided to arrange Android SDK’s like Java API’s.
Original source: “Google’s use of the Java API packages was not fair,” appeals court rules
‘“the way Oracle plans on differentiating itself from Amazon is by offering a complete suite of platform services at a higher level than infrastructure services,” Ellison said. Open-source databases like MySQL and MongoDB have become very popular with developers in the cloud era, but there are still lots of companies running Oracle databases on their own hardware as well as companies that want to maintain application compatibility with Oracle but through Oracle’s cloud services.’
Original source: As it shifts cloud focus to platform services, Oracle tries to hold on to its database legacy
“In addition Jakarta EE naturally shortens to “JEE” (or even “EE”) and jakarta.servlet.http looks pretty similar to javax.servlet.http.”
Original source: Java EE Becomes Jakarta EE
“In a nutshell, Oracle Autonomous Cloud Platform will aim to automate patching, tuning and even data integration across its portfolio. Oracle’s return on investment pitch is that its autonomous platform frees up technology talent for higher-value tasks.”
Original source: Oracle expands its autonomous technology across its cloud platform
“Oracle’s positioning is that its later start to the cloud has provided the chance to learn all the lessons of the first-generation providers.”
Good, deep (for word count) overview of Oracle’s cloud stuff.
Original source: Oracle to market: We’re Cloud 2.0
Oracle’s view is simple: SaaS suites win in the long term.
Oracle reports its PaaS and IaaS revenue together, which makes understanding its IaaS growth difficult. FY16 to FY17 revenue increased from $0.9bn to $1.4bn, equivalent to 60% YoY growth. The company claims to have added 14,000 IaaS and PaaS customers to OCI since its inception, almost all of them existing customers of its licensed software. Oracle’s overall revenue in 2016 was $37bn, so IaaS and PaaS still represent a small slice of the pie.
The report has, of course, more detail on the portfolio, e.g.:
A challenge Oracle faced from the beginning was its tardiness to the market. Sure, it could copy and perhaps improve upon existing public cloud offerings, but it would have to do it faster than the rest of the market. AWS, for example, has over 70 services, so there is a lot of ground to cover. Over the past year, Oracle has released 50 services and features – starting from bare-metal compute and storage, the company has added virtual machines, databases, database clustering, load balancers, audit capability, compliance, monitoring, logging, authentication and new images. From a single datacenter in Phoenix, it has expanded to Ashburn, Virginia, and Frankfurt; it is targeting London for early 2018 and APAC further down the line. It has also released and open-sourced a new serverless capability called Fn and a Docker-native platform called Fn Flow for composing serverless applications. The company hopes to distinguish its serverless offering by making it cloud-agnostic, although Java is first among equals in terms of supported languages. Oracle realizes that its capability isn’t as broad as AWS’s, but its rate of development shows it can achieve a lot in a short amount of time.
In 451 Research’s Voice of the Enterprise: Hosting & Cloud Managed Services, Organizational Dynamics 2017 report, 44% of 515 respondents stated that they would pay a premium for an enhanced SLA on performance/uptime; 34% stated that they would pay a premium for enhanced customer support. The median premium for these enhancements was about 20%. Buyers see value in services way beyond just the basics. The challenge for Oracle is convincing customers that it offers the best capability for the best price – there are others in the market with stronger credentials and reputations. stronger credentials and reputations.
Source: Oracle stays the course on IaaS
Oracle all over that public kubernetes service.
“Licensing. Why’d it have to be licensing?”
Jon Hall, who always has good things to say about traditional IT Service Management butting up against Melinum IT, points out an all too common hassle with new ways of packaging and running IT: accounting for traditional licensing. Here, he points out a likely licensing counting problem with Docker-ized applications, e.g., with Oracle licensing when it comes to the recent, official Docker images with Oracle software in ’em:
But theres a serious gotcha here: as any Software Asset Manager could point out, these actions could have just cost the company a pretty staggering amount of money. How? By falling foul of Oracles notoriously complex licensing system.
Oracle licensing is bloody complex, and its entirely possible that a goalpost or two might have moved by the time you read this.
The Register closes out it’s reporting on the rumor that Oracle was considering buying Accenture:
…spokeswoman Deborah Hillinger has since denied that an acquisition will take place, claiming: “The Accenture rumour is completely untrue. Never even considered it.”
Meanwhile, Dennis covers the many reasons why the deal wouldn’t make sense in the first place. The margin argument is always a good, quick one:
…consultants are not normally selling software solutions, but are selling the bodies and expertise needed to make the chosen solution work, the second part of this model. When you look at how that translates into revenue and profit, it quickly becomes apparent that while the implementation contract may well be 5, 6 or even 10x the software cost, the margins are much smaller per dollar spent by customers. To give you a flavor of what this means, in its latest filing, Accenture recorded operating income of 13.7%. For its part, Oracle reported operating income of 32%. As you can readily see, there is no comparison between the two companies, despite the fact Accenture has been acquiring and developing its own software for solutions outside the ‘mainstream’ of solutions that Oracle sells.
We discussed this rumor on last week’s Software Defined Talk episode as well.
A bit of a jumbled article for general audiences
, but some more numbers of tech companies’ cash on hand and numbers around 2016 acquisitions:
The value of software deals in 2016 topped $115 billion for acquisitions closed or pending, according to data gathered by Bloomberg. That’s up about 19 percent from 2015.
Overall in 2016, the value of merger-and-acquisition business software deals totaled $117.6 billion.
That doesn’t include the blockbuster tech deal of the year: Microsoft paying $26 billion for LinkedIn. LinkedIn does not fit neatly into the category of business software because of its professional networking tools that are used by workers outside of business hours.
Tech companies have lots of cash abroad. If the Trump folks reduce the tax down to 10%, the theory is many companies would bring that cash “back home” and could use it to buy things, and likely pay our dividends and do share buy backs:
Oracle and Microsoft have more than 80 percent of their cash, near-term cash and short-term investments in foreign subsidiaries, according to recent filings.
Who knows? It’s all a bit of a lamp-post analysis, but, sure: ¯_(ツ)_/¯
Oracle claims the company isn’t closing the Santa Clara facility with this reduction in force. Instead, “Oracle is refocusing its Hardware Systems business, and for that reason, has decided to lay off certain of its employees in the Hardware Systems Division.”
Those hardware employees appear to have been Oracle’s failing SPARC hardware department staffers. In mid 2016, Oracle claimed its new SPARC S7 processor would be offered on Oracle Cloud. The cloud is Oracle’s new revenue hope since its new software licensing revenue plummeted by 20 percent in its last quarter ended December 15. At the same time, Oracle’s hardware revenue had fallen 13 percent.
As for Oracle, the enterprise software vendor wants to use Apiary’s technology set to make its existing API Integration Cloud more robust. Oracle’s API product focuses primarily on services that help companies monetize and analyze APIs. Apiary provides more of a front-end platform for designing, creating and governing APIs. From Natalie Gagliordi f at ZDnet
- $8.55M in funding, over three rounds
- Founded April, 2011.
Apigee was acquired, by Google, last year for $625m. Of course, they were public with (let’s hazard a guess) many, many more customers and revenue: $92.03m in FY2016, to be exact.
Back in September 2015, Carl Lehmann at 451 Research said they had 33 employees (up from 22 in Dec 2014) and estimated their revenue at $2-3m. Carl says, now, it’s “likely below $5m in annual revenue.”
What Apiary does
Apiary’s promise is to be quick and easy when it comes to managing the full life-cycle of API design. As their CEO, Jakub Nesetril, put it when I interviewed him in 2015:
It all starts with that first meeting when you’re thinking about building an API and you’re either kind of, you know, you’re inside meeting room ideating on a white board and then taking a photo of it and sending it to a co-worker, or summarizing it down into an email and sending it down to somebody else, saying hey, I just thought would could build something like this. That white board should be. And, if you do that it becomes, you know, we do a lot to try to make it super simple. We have a language that is like really, really simple for developers to write and we can write down a quick API in five minutes. It’s marked down, it’s like very organic, it’s very simple for developers.
What it creates for you, is creates this kind of common space, common language kind of when you talk about it that’s machine readable, human writable so it’s super simple but it’s also machine writable, and machine readable. The important aspect of it is that we take your white board, we take your … we build a language that we have API blue prints. It’s a… We take that API blueprint and we immediately create a API prototype, the moment you hit your first button. So, from day one when you’ve proposed your first API idea, your first resource you know, your first data structure. You have an API that’s sitting out there on the internet, somebody can query it and guess what, if they decide that the API is broken, that they would like to have a different resource, they would like to change the of a certain data structure, they would like add to it, whatever. They can go in, edit that out, click the save button and boom the API prototype is updated immediately.
Load in some enterprise governance and access controls, and you have something nice and useful. See him explaining more in this 2013 InfoQ interview.
Carl at 451 summarized the meat of what they do back in that 2015 report:
Apiary structures its API lifecycle management platform into five phases. The design phase includes the means to ensure API design consistency using a style guide, a collaborative editor and an approval process. The prototype phase includes productivity capabilities such as auto-generated code and a feedback loop for quality assurance. The implementation phase enables agile-inspired and test-driven development practices, helps deploy server code, and provides for framework integration. The delivery phase includes tools for automated documentation, offers code samples, guides the release of final client code, and offers SDKs. The feedback phase includes debugging, support and usage metrics.
The Money – grabbing part of the $3bn pie
Forrester threw out some API management market-sizing back in June of 2015 (there’s likely something more up-to-date behind their paywall):
We predict US companies alone will spend nearly $3 billion on API management over the next five years. Annual spend will quadruple by the end of the decade, from $140 million in 2014 to $660 million in 2020. International sales will take the global market over the billion dollar mark.
With Oracle’s foot-print in all of enterprise applications and IT (they own Java and share much of the JEE market with IBM), there’s likely some genuine synergies to be had. That is, Oracle could be in a position to boost Apiary sales way above what the tiny company could do on its own.
To be clear, as pointed out above, Apiary doesn’t do all that Apigee does. Apiary is just for the development/design time part of APIs, also providing documentation.
That’s helpful for sure, but I’d guess most of Forrester’s $3bn estimation is likely in actually running and managing APIs. And, in fact, it’s probably more realistic to put Apiary in the development tools/ALM TAM, which is probably in the low, single digit billions. That said, I’m guessing Forrester would put Apiary in their API management bucket; after all, it has “API” in it!
Once again, the key metric of new software license sales was off—falling 19% to $1.35 billion compared to last year, and missing analysts’ expectations of $1.44 billion.
On the other hand:
“Our cloud revenue will be larger than our new software license revenue next fiscal year, when the transition will be largely complete.”
“Our cloud applications goal is to be the world largest and most profitable SaaS company. We are growing our cloud business much faster than Salesforce.com, and we can beat them to the $10 billion mark, but it’s going to be close,” Ellison told analysts on the call.
Database-as-a-service, which basically runs a company’s database on a third party’s cloud, is a fast-growing category for Oracle, according to the company. In fact, Oracle co-CEO Mark Hurd said that business was up 700% year over year, hitting $100 million in quarterly revenue.
Also: sweet flip phone!
Lydia has a great overview of the newest Oracle run at IaaS:
The next-gen cloud currently consists of an SDN (capable of both Layer 2 and Layer 3 networking, which is a differentiator), block storage, object storage, and bare-metal servers (thus the initial moniker, “Oracle Bare Metal Cloud”). Virtual machines (VMs) are coming later this year, with containers to follow early next year. Based on a detailed engineering briefing that Oracle provided to myself and my colleagues, I would say that smart and scalable choices seem to have been made throughout. However, I would characterize this early offering as minimum viable product; it is the foundation of a future competitive offering, rather than a competitive offering today.
She goes on the characterize it as bare-metal and point out that composting of price is not how this market works: you compete on capability. That seems to march Oracle’s core belief system.
And now the entire enterprise Java world is upside down, because a single company loses interest.
A summary of the slowness of JEE 8, highlighting Oracle’s disinterest.
There was a bit of a stink recently that Oracle was backing out of JEE support, the layer above the core of Java that provides a lot of common APIs, services, and frameworks that orginizations use to make applications.
“Almost all work from Oracle on Java EE has ceased for more than six months with no end to the inactivity in sight. Unless things change soon Java EE 8 won’t be delivered in anywhere near the time when it was initially promised if it is delivered at all.”
It’s open source with implementations of it being closed source (in the form of Java application servers like JBoss, WebLogic, WebSphere, etc.). These are the stacks that many, many orginizations use: it’s a sub-set of the application infrastructure and middleware market which Gartner estimated to be around $23.8bn in 2014. So: lots of use out there.
Whatever that “backing off plan” may have been, Oracle seems to be backing off those plans and is back on the open JEE
Very recently, however, amid intense pressure from the community, IBM and Red Hat, The Register understands Oracle executives realized that the proprietary API route would be a disaster: it would cause too much damage to the ecosystem, and there was no guarantee people would use the new closed-source API.
With Matt Ray in Australia we discuss the character of the tech scene over in that neck of the woods. We also talk about Oracle’s new positioning as one-stop cloud shop, The Gang of Four/FANG type thinking, and balancing small company culture vs. selling to The Enterprise.
SPONSOR: Interested in speeding your software’s cycle time, reducing release cycles, and a resilient cloud platform? Check out the free ebook on Cloud Foundry or take Cloud Foundry for a test drive with Pivotal Web Services. See those and other things at cote.io/pivotal.
- If you like video, see this episodes’ video recording.
- Oracle’s Shooting for Cloud Relevance – Pretty good article on the overall landscape. Best of Breed vs. Integrated Stack clouds: “any large-scale hardware vendor without a successful public cloud business will have a severely challenged business model.” Since then, EMC has collapsed into Dell, HP has shut down its public cloud, VMware is being criticized by financial analysts for having its business “eaten alive” by the public cloud, and Citrix split itself apart at its shareholder’s behest”
- Amazon misses earnings, still ridiculous – “Amazon Web Services’ fourth quarter revenue grew 69 percent year over year, generating $2.41 billion in sales. But the crazy growth of its cloud is slowing down a bit: two quarters ago, Amazon posted 82 percent growth in AWS revenue; last quarter, sales grew 78 percent year over year. Still, $2.41 billion beats analyst estimates of $2.38 billion.”
- Public cloud market share from Synergy
- 54m Prime members – “Prime has 54 million U.S. members, up 35% from 2014. The report also showed that 47% of Amazon’s total customers are Prime members. These latest numbers follow the recent news that 38% of American households are members”
- Gang of Four: Apple / Amazon / Facebook / Google (Scott Galloway, Founder of L2) | DLD16 – rapid-fire chart porn.
- GitHub hipsters annoyed by “The Enterprise”?
- Micky Mouse cutting a razer-thin bean.
Bonus Links, not covered in show
- Andreessen buying TWTR with PE? – Brandon’s gonna be excited!
- AWS Certificate Manager – New AWS service for free Amazon-provided SSL certs for ELB and CloudFront
Ramping up cloud: “Oracle talks a great cloud game – it says it has in the last six months added nearly 1,500 new software as a service (SaaS) customers and more than 2,100 platform as a service (PaaS) customers.”
” Our announcements are always a minimum of six months ahead of the technology.”
“But microservices want to bring you into tomorrow,” says Winterberg. “Microservices add a bit to the category concept, defining a service over all application layers, including the UI. So people already doing SOA may gain a kind of new freedom by adopting microservice ideas.” That freedom includes technology independence and an alternative to aging technologies, because individual services within an application can be gradually swapped out for those based on more-modern technologies, without having to replace the entire application. “Classic SOA is more platform driven, so microservices offer more choices in all dimensions,” says Winterberg.
The picture that emerges is not of microservices as an alternative to SOA, but rather as a way to restore flexibility that may have been lost in SOAs that became too rigid and monolithic.
It looks like that whole “work/life balance” thing is freakin’ people out:
This is the first generation in the history of America that hasn’t said it wants a better life than its parents. It wants more flexibility. It’s going to be a different sets of things and fundamentally people who are less loyal. This is really bad news.
I’m sure they’re all “next stop: OMG! Grexit!”
All your data are belong to us.
Oracle announced that it’s putting OpenStack into Solaris, which is good fun. James Niccolai asked for my thoughts on the topic for his story. I hadn’t been briefed, so it was just speculation, but here’s the full text of what I sent over:
Solaris was always – and no doubt still is – technically advanced. For example, the zfs filesystem, dtrace, and zones were always tasty looking for Linux folks. At the end of the day, Solaris is a rock-solid UNIX system that got run over by Linux becoming equally rock solid: but Solaris is still what it’s always been, a solid operating system. Layering OpenStack over Solaris is a good step for Oracle who’s always been dodgy all the way up to Larry on cloud. I’m eager to see how the OpenStack community reacts to this – it’ll be all over the map (the first salvo will be to question Oracle’s genuineness, followed by “yeah, but how much will be open source?”), Oracle having a mixed reputation in the open source world, unfortunately. To pick one technology of interest: Docker is of course a darling of the cloud world for the last 6-7 months. Docker is built on Linux containers, which are painfully similar to Solaris zones. And since Docker is OpenStack…you can start to imagine that you’d be able to do Docker/container magic with Linux containers and/or Solaris zones. Then there’s zfs which has all sorts of file system magic: seeing how that gets applied to the OpenStack world will be interesting.
Finally, Oracle’s database and ERP portfolio is widely used in IT departments now. If Oracle gets to the point where you can run its database and ERP apps on OpenStack (even if it’s Oracle “proprietary” version vs. the Red Herring of “OpenStack mainline”) then that’s a big deal for the OpenStack world.
“We intend to compete aggressively in the commodity infrastructure-as-a-service marketplace,” he said. “We’re not going to have that alone … our intention is to sell our customers IaaS and the same customer a highly differentiated platform-as-a-service which will let us get better margins and a highly differentiated suite of applications for the cloud.”