Cloud leads the agenda at Oracle OpenWorld 2012

OVUM VIEW

Summary

Oracle’s showcase event for customers and partners is a key time in the company’s annual cycle for new product launches and previews, and for insights into its forward directions. Oracle OpenWorld 2012 contained four major headline announcements: an update for the Oracle Exadata engineered system, the next version of Oracle Database, additions to Oracle Cloud, and further detail on Oracle’s social strategy. The agenda was, however, pervaded by cloud computing in all its forms, as the company continues to ready itself for an era where clients will increasingly look to both private and public clouds as the basis for delivering business technology solutions. The other notable aspect of the event was the strong client interest in solutions (again cloud-delivered) for human capital management, where Oracle is already seeing significant uptake, and for customer experience management, where the company is making a big play for future growth.

Engineered systems gain performance boost

Oracle announced a major update to its engineered system for database applications (covering both transactional and analytics workloads), branded as Oracle Exadata X3. This makes extensive use of PCI flash cards (up to 22TB per Exadata rack) for both read and write operations, which when coupled with Hybrid Columnar Compression (HCC) technology enables all active data for most applications to reside in flash. The hottest data can then be moved to the fastest DRAM tier, which has been expanded to 2TB or 4TB in the new version. The added performance comes at no additional cost over the former Oracle Exadata X2 system, and Oracle also announced a smaller one-eighth rack configuration for Exadata, to provide a lower cost entry point. Ovum estimates that the customer adoption of Oracle Exadata systems is split roughly 50:50 between data warehousing applications and mixed use for transactional workloads and consolidation. Importantly, customers who have purchased previous generations of Oracle Exadata systems can also mix older and newer hardware in the same rack, with the same software running across both.

Oracle Database 12c features redesigned architecture

The second significant announcement concerned the next release of Oracle’s flagship database product, Oracle Database 12c. Although not yet officially launched to general availability (it is expected in calendar Q1, 2013), Oracle executives made much of a significant rearchitecting of the database to optimize it for use in cloud environments. The core principle for this is the introduction of database containers into which individual databases can be “plugged”. This can be thought of as database virtualization, and means that resource allocation and administration of the database environment can be done at the container level to improve efficiency, while still maintaining the isolation of individual databases. This will reduce overall management costs, reduce time for provisioning, and increase the opportunity for consolidation, but does not require changes to existing applications. For cloud environments, this will in effect mean that multi-tenancy can take place at the database level, rather than at the application level, which Oracle asserts will provide improved scalability and resilience.

Extended services for the Oracle Cloud

Oracle is continuing to steadily build out the range of services available through Oracle Cloud at all layers of the stack. At the infrastructure level, Oracle made two new announcements: first, the availability of Oracle Private Cloud, a managed IaaS option whereby Oracle owns and manages the infrastructure that sits behind the customer’s firewall and is paid for on a subscription basis, and second, that it will make its common infrastructure services available on a standalone self-provisioned basis. At platform level, Oracle’s cloud services are designed as a standards-based environment for developing and deploying rich applications based on standards (Java, SQL, HTML 5 Web), and it announced further services in this area (Developer Services) for application lifecycle management, services for document sharing and shared workspaces (Collaboration Services), and for data analysis, dashboard creation, and publishing (Analytics Services). In the SaaS domain, following its acquisitions of Taleo and SelectMinds, Oracle is seeing strong traction in the HCM and talent management segment, with much of this new business (Ovum estimates around 80%) being deployed as SaaS. At Oracle OpenWorld, the company announced the preview of additional SaaS services for financial planning and budgeting, and for financial reporting, both of which are likely to be attractive within the office of the CFO, particularly where rapid deployment is required.

A social platform for customer engagement

Social and customer experience are the other two categories where Oracle has made multiple acquisitions over the past 18 months, and the company provided further details about its strategy in these areas. Running as a sub-conference within Oracle OpenWorld, the Customer Experience Summit showcased what is now an extensive platform, addressing marketing, commerce, sales, and service. Threaded through all of these, and indeed the whole of Oracle Fusion Applications, are social capabilities, with Oracle stressing the benefits of a social platform rather than deploying individual social solutions. However, this is still a young and dynamic market, and Ovum believes that customer buying patterns may not yet be aligned with the longer term strategy that Oracle has put in place. One example is the requirement to sell solutions into the CMO and the marketing organization, where Oracle’s messaging needs further development. Another is in the enterprise social collaboration arena, where much of the early adoption has been employee-driven rather than corporately driven. We therefore expect to see further tuning of the customer experience and social platforms over the course of the next year.

Evolving enterprise IT on the customer’s terms

The audience at Oracle OpenWorld is largely an IT one, and the messages are therefore tailored to meet its needs, with even keynote presentations featuring more on technical innovation than on how technology is enabling business strategy and transformation. Oracle’s messages of customer choice and simplicity are, however, resonating well. The delivery of enterprise IT is evolving toward a hybrid cloud and on-premise model, but customers want to do this on their own terms, with significant differences across and even within organizations. Line-of-business executives may want rapid deployment of new capabilities in some areas, for which SaaS is ideal, yet still be content to rely on previous generations of technology for core transactional systems. At the same time, the IT organization knows that it must seek increased agility and efficiency to support and integrate these use cases.

Oracle is attempting to support this choice at all levels of the stack, from infrastructure through to applications, and by and large is doing a good job of it. A consequence of this strategy is that the company’s portfolio can appear mainstream and conservative, rather than being at the bleeding edge of innovation, but for the majority of enterprises, dictating their own pace is exactly what they want. Oracle learnt this lesson five years ago, which led to its Applications Unlimited strategy, and this will stand it in good stead as it supports its customers in the social, cloud, and mobile era.

APPENDIX

Author

Tim Jennings, Chief Analyst, Enterprise IT

tim.jennings@ovum.com

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