Oracle's Integration Play: Beyond Databases

When Oracle acquires companies -- a frequent occurrence -- it takes products and increases investment in them, it does not decrease them, executives claim.

Oracle co-presidents Charles Phillips and Safra Catz had a tough act to follow after last night -- with their boss Larry Ellison issuing a challenge to IBM and Sun's Scott McNealy delivering a nostalgic look at the past and future of the company he co-founded.

But they tried, talking about about what they described as the "backstory" of Oracle's integration strategy. In doing so, Phillips and Catz also offered a look at Oracle's thinking behind not just its acquisition of Sun, but of all of its acquisitions to date.

Oracle (NASDAQ: ORCL) has long been thought of as a database company. But with applications, middleware, developer tools and a virtualization platform, it today offers much more than just a relational database.

A large part of that comes as a result of the company's 59 acquisitions, which so far have yielded some 3,000 products, Phillips noted. And when Oracle gobbles up companies, it takes products and increases investment in them -- it does not decrease them, he added.

"We'll do what we've always done: make the products better," Phillips told the audience. "After 59 acquisitions, we think we have a track record of doing this."

The comments were as close as Phillips came to addressing the Sun audience directly -- particularly users of the Sun-backed MySQL database software, the future which has been the subject of much speculation following Oracle's bid to purchase Sun.

Concerns over what might become of MySQL have even prompted European regulators to investigate the merger.

But Phillips aimed to drive home the notion that Oracle is serious about improving on all of the products it acquires, noting that it has an annual R&D budget of $3 billion and more than 20,000 developers, a figure that will be increased once Sun comes on board.

Buying software like cars

Catz added that Oracle's integration play began when it did its own internal IT transformation -- which helped it realize the pain most enterprise customers face in their own IT deployments.

"We realized most of the hard work is with you [users]. Us and all the other software vendors were sending you little pieces of technology all these years, and it was at your site [that] you had to make it all work together," she said. "What we thought was this didn't make sense. Long-term, companies like us had to take more responsibility to make it work together."

Catz likened the situation to buying a car: If consumers bought automobiles like most enterprise users bought technology, they would have to order thousands of little pieces, have them shipped individually to their homes, and have to hire a mechanic and welder to assemble it.

Then, just as users are ready to pull out of the driveway, a warning light would go on for a patch, she said.

Oracle has racked up $40 billion in acquired R&D in the recent years, and those acquisitions are about integration. "We're making sure we have the parts to send you a complete solution so you don't have to do it on site," Catz said.

The keynote itself was less combative than Ellison's. Instead, the two executives brought a variety of IT professionals on stage to show how they are using Oracle products in their businesses, with the common theme of real-life scenarios. Much of the talk centered around getting data out of what had previously been isolated silos of data.

HP: Think datacenter automation

That theme continued into the following presentation by HP Executive Vice President Ann Livermore, who followed Catz and Phillips.

Livermore showed no hard feelings after being jilted in favor of Sun in Oracle's Exadata server strategy.

Instead, she delivered what was mostly an HP sales pitch, noting that HP (NYSE: HPQ) and Oracle have 140,000 joint customers and 40 percent of all Oracle database deployments are on HP systems.

And as Catz and Phillips discussed, she focused on the sprawl taking place in datacenters, where resources are locked in silos for one app or one business only.

At the same time, she said many datacenters are overprovisioned, hard to properly utilize and difficult to manage. As a result, 70 percent of IT budgets go to maintenance while only 30 percent goes into innovation.

"What we want to do is help you flip that ratio. This is true with physical systems, virtual systems, or some combination of the two," Livermore said.

"Our vision is to reunify and optimize the datacenter and do this in a holistic approach with an integrated infrastructure we call converged, and the operation of the infrastructure we call converged, based on standards and highly automated, using software to automate a lot of the tasks," she added.

With 60 percent of outages in datacenters caused by human error, she added, anything that can be automated should be.

Article courtesy of

Tags: database, IBM, virtualization, HP, Enterprise

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