
Oracle to Amazon: It’s on - yogo
http://gigaom.com/2013/12/26/oracle-to-amazon-its-on/
======
mackey
I worked for Oracle for a little while after getting acquired.

For a developer, there are so many obstacles you need to overcome to ship
anything on time there or of quality. Everything is bad, from the developer
hardware/tools to the red tape.

The bug tracking system looks like an HTML 1.0 web page. The "database
version" is a required field, even though the product you work on doesn't even
use a database. I seem to remember having problems linking to issues, because
the the URL was just a hashed session so you couldn't even bookmark things.

You want to use that open source library that everyone else is using and does
exactly what you need? All you need to do is fill out a bunch of on-line forms
where you explain the material impact of using this library and how much money
your BU makes and how this affects the bottom line. Once you get through all
that, your request needs to travel all the way up the food chain to the office
of the CEO which can take months of harassing administrative assistants of
very highly payed people for that to actually happen. This doesn't even take
into account the legal approval steps that need to happen which also takes a
while.

While this is going on, you have to work with your 3rd party library and hope
that it gets approved or risk months of wasted work. In the end, you notice
that other people don't even try and use 3rd party libraries because it's so
frustrating. In the end they just try and re-invent the wheel, and because a
certain percentage of your team has to be in a "low cost center", the library
ends up sucking.

Recap: Amazon has nothing to worry about, because nothing innovative or
powerful is going to come out of Oracle.

~~~
tlogan
I agree that development is challenging in Oracle - depending on org you end
up working for.

But, you might have basic misunderstanding of Oracle as a whole and position
in the market. Oracle is an excellent acquisition and integration machine:
They did excellent job with BEA, PeopleSoft, Sibel, GoldgenGate, etc. That is
the key of Oracle: very well tuned system (marketing, support, sales,
engineering, DDR, etc.) which can make a lot of money in enterprise
environment.

~~~
mackey
"Excellent acquisition and integration machine"? From who's perspective is
this? The customer? The employees?

From employees perspective:

At least in my org, integration is still sputtering along almost 2 years after
I have left. Oracle bought another company shortly after us that we had to
integrate with, in addition to Oracle proper. Over the last 2 years, most of
the more competent engineers have left because they couldn't take the work or
environment anymore. The end result was more work for everyone else and
inability to find new employees due to the hot market. New feature development
are practically non-existent.

On the non-technical side, there was nothing excellent about integration. We
lost vacation time/holidays. We didn't have wireless for probably 6 months at
the office because our wireless wasn't "secure enough". Everything worked less
well than it did before, from phones to the network.

From the customer perspective:

For the customers that don't care about whatever product you are integrating
with, they haven't seen many new features because everyone is focused on
integrations. There are now less people that understand the product focused on
you.

For the customers that do care about the integrations, at least in my org, the
integrations have been so shaky I can't help but think there will be some
buyers remorse. And again the quality of people supporting you is now lower.

------
ChuckMcM
I did not realize that Oracle was in this much trouble. In my experience
companies that are circling the drain put out press releases that say "Hey
<leader of some technology that is hip> we're going to take away all your
business with our version of your same technology that we just figured out how
to build, sort of." Stepping into this mess is not something the Oracle
organization has the DNA for.

I grant you my experience with them is dated (they were a huge part of the
NetApp push into data base markets) but they were all about the 'added value
option' and high touch management / maintenance. Not something cloud compute
is about.

To my way of thinking it seems like step one here, would seem be build a PUE <
1.05 data center with 10MW of provisioned power. Have they done that?

~~~
adventured
Oracle isn't in any trouble, clearly. Their biggest problem appears to be
figuring out how to spend the $39 billion in their bank account, while they
print another $11b per year.

They have the financial resources of Google, dwarfing Amazon in that regard. I
don't think any of this will be decided by who has large data centers - that's
a commodity that can be acquired at will when you're talking about companies
with tens of billions in the bank. This will all come down to execution.

~~~
aquadrop
I don't think Oracle dwarfs Amazon at all. They are comparable in size an
Amazon is growing fast. And Amazon have 5+ years of experience in the field,
they have special hardware, they know how to do it cheap and well. You can't
get that fast, even if you have spare billions. This race will be tough for
Oracle and they might need a few years to catch up with Amazon.

~~~
adventured
It'll be exceptionally tough for Oracle. Who said otherwise?

And Oracle does dwarf Amazon, significantly, in terms of financial resources.
That's not a subjective opinion, it's an easy direct comparison.

Amazon has $7.6 billion in cash, a pile that is contracting rather than
expanding, and they have to fund the continued expansion of their retail
business, investing billions into _new_ fulfillment and automation. Meanwhile
it's highly unlikely Amazon is earning much profit out of AWS itself. Amazon
produces some cash flow, but they do not produce net income, and do not
compile much cash to their balance sheet from operations.

Oracle has $39 billion in cash, net income of $11 billion, and even more cash
flow. Out of $37 billion in revenue, Oracle generates $14.6b in operating
income; Amazon generates approximately zero operating income.

To put it all in perspective, Oracle generates more net income per quarter
than Amazon has in its entire history. Oracle generates more cash per year to
its balance sheet than Amazon has in the last ten years.

~~~
mackey
I don't have any experience with Amazon, but at least with Oracle we found it
very difficult to actually get them to use some of those "financial resources"
for even basic things. I would imagine Amazon is willing to do whatever it
takes to make the best possible product/ecosystem. I don't have the same
confidence that Oracle will.

------
mbesto
> _the real dough lies in Software as a Service (SaaS) and what Ellison called
> a “highly differentiated” Platform as a Service (PaaS) that will provide it
> Oracle-like margins on enterprise applications._

I call bullshit. No one is making "Oracle-like margins on enterprise
applications" in the cloud...yet...not anytime soon in this competitive
market.

This is the opportunity in IaaS/PaaS as I see it: every large company in the
world typically outsources their operations systems infrastructure. Here's an
example - a company based in Europe that does €7b in revenue. Let's call them
Big, Co. They have a myriad of technology partners - Oracle, SAP, HP,
IBM...you name it, they have it. Anyway, one of their partners, Atos, provides
infrastructure services for them based in Austria. So, let's say the CIO
decides that the HR department is going to use SAP HCM to support HR. Some
manager at some level calls up Atos and says "Alright we need 6 HP ProLiant
servers, Oracle 10g installed on 3 of them, and SAP HCM installed". This
process takes months. To everyone in the web world who's unfamiliar with
enterprise - this is the equivalent of installing a LAMP stack on EC2. So you
can see the disparity between the two (months vs minutes). The problem is -
none of the enterprise technologies (Oracle 10g or HP ProLiant blades for
example) are sold as commodities...they're "professional" and "enterprise
grade". So here's the opportunity - do what Amazon did for the web in the
enterprise. So, let's say you want SAP HCM, well that's simple, have support
spin you up a server with a pre-installed set of technologies (like a LAMP
stack!) and then let some implementation managers go and install it. Here are
the problems for Oracle (and pretty much anyone at this point):

1- Cross-platform ecosystem is shit when it comes to APIs (integration is
normally much bigger of a challenge than the implementation itself)

2- Oracle isn't good at integrating all of it's "parts". They have a strong
hardware/OS company (Sun), a strong db brand (oracle), and very strong best in
breed software (Peoplesoft, etc), but they've been working in silos their
whole lives. It isn't their strong point to do integration (just as SAP has
been abysmal at acquisitions)

3- The margins absolutely suck in SaaS. Look at Salesforce, Workday, Amazon,
etc. They are all negative or razor thin. Oracle and SAP are used to 85% gross
margin on software. This will take a lot to gut (mainly from stockholders)

~~~
dj_axl
> Look at Salesforce, Workday, Amazon, etc. They are all negative or razor
> thin. Oracle and SAP are used to 85% gross margin on software.

Workday has a profit margin of 62% versus Oracle's profit margin of 82%. It's
less but it's not that big of a gap.

~~~
mbesto
Huh? Workday has never turned a profit... and AFAIK do not report gross
margins (for support contracts) the same way SAP/Oracle do...

[https://www.google.com/finance?cid=401330883723564](https://www.google.com/finance?cid=401330883723564)

------
rb2k_
The main problem that I see with this:

\- most people dislike Oracle

\- most people like Amazon

So I think at least initially, it will be about "approachability" rather than
price and technical equivalency.

Everyone programmer can usually spin up an ec2 instance after about 10
minutes. With Oracle, I have the feeling that just registering to see
documentation will probably be more than 10 minutes and you'd end up in a
database somewhere to receive emails/phonecalls a few weeks later.

~~~
possibilistic
I agree with your sentiment. I would have trouble putting trust in Oracle.

But regardless of my feelings, only the people making the decisions on where
to spend the money matter. Oracle has made it their business to be very good
at converting those people.

------
moomin
I think new entrants to the space have no idea how hard it is to take on
amazon here. Microsoft are getting a clue fairly rapidly, Google seem to have
just decided to cede the space.

~~~
ChuckMcM
Can you say more on : _" Google seem to have just decided to cede the space."_
?

My take on it was that Google's pride in their own engineering would not let
them do that. They seem to be in it for the long haul here.

------
rch
Remember when Ellison said he was just going to outcompete Salesforce
(mid-2000s)? Interesting how that worked out:

[http://www.salesforce.com/company/oracle.jsp](http://www.salesforce.com/company/oracle.jsp)

------
mitchty
Oracle and affordable in the same sentence?

Sure Ellison, sure.

~~~
freehunter
I don't know of any company (mine included) that uses Oracle because they
_want_ to. I always hear talk about reducing our dependency on Oracle at the
same time we're moving more and more mission-critical and high-performance
applications to RAC and Solaris.

~~~
mitchty
We're migrating away from Solaris here, and more to their grid stuff. My point
is more the cost is insane. That and the level and response I get from
"support" personnel can vary from decent to "what do we pay you people for".

I've had better support experiences when I can dig into the source, say linux
or a kernel module, or a driver and figure things out on my own while I wait
to get punched through various level 1/2/3/etc.. support people. I vastly
prefer open source for this reason alone, with oracle stuff, its basically a
black box that barely works if you look at it wrong. This is with everything
fully automated mind you, I still see jenkins test failures where installs
will not work seemingly at random. I can debug or retry the job and it'll
work. Its my most hated piece of software right now.

------
jbuzbee
I was expecting to read that a new round of lawsuits had been filed as it
seems that is the only way these big companies "compete" these days. At least
they are trying to compete on an actual product instead of just suing using a
bunch of patents they bought for that purpose. Of course if competing fails,
you can expect the lawsuits to follow...

------
dredmorbius
Of course, Sun had its own Cloud offering pre-aquisition (SunGrid). Though it
didn't seem to be particularly successful / popular at the time (I had a
journalist reach out to me to ask if I actually knew of anyone using it at the
time of the merger).

Many of the staff and execs left shortly after -- Lew Tucker in particular,
February, 2010.

~~~
dekhn
At the time I believe it was called "utility computing". I think they were a
few years ahead of the curve, and far too dependent on their own hardware
platform, for it to be a viable product.

Amazon hit at the right time: virtualization as a concept was being adopted by
developers, storage needs were going through the roof, classic storage systems
weren't scaling at reasonable costs.

Amazon's other strength is that they can use the massive revenue they have
sitting around for short periods of time to build out their computational
infrastructure (turning their operational revenue into capital spending). IaaS
took off; SaaS somewhat, and PaaS almost not at all (except in a few well
defined areas).

I can't really see what oracle woudl bring to the game. It looks to me like
they are just making a play to take their existing customers and move them to
their data centers.

~~~
dredmorbius
I'm not discounting your criticisms at all. Yes, data processing services have
existed for a long time -- EDS offered this as a business model on mainframes
rather famously. And while good at it, they were also highly despised for
their contractual and service terms. I worked in the 1990s at a site making
use of Everyone Dresses the Same, and there was a _tremendous_ amount of
friction, as well a strong internal incentive to get away from the service,
however contractual obligations largely prevented this. A cautionary note to
those presently looking at cloud services, though the lock-in's much smaller.

Sun faced multiple challenges, largely being a legacy product with legacy
offerings in a world where price point was key, their service commanded a
premium, and much existing infrastructure wasn't positioned to properly
capitalize on it. That's just off the top of my head, though I'd be interested
in seeing what other factors accounted for the failure.

Oracle has the kiss of death for far too much in my book. I'd consider any
offering it presented with extreme reluctance.

~~~
yankcrime
There were two offerings as far as "SunGrid" was concerned - either the
public-facing 'retail' iteration powered by N1GE which was launched as
network.com ("$1 per CPU per hour!") and also a B2B commercial version which
offered a lot more flexibility, i.e run your Linux distribution on Sun's
hardware. The latter was built at scale using AMD Opteron-based SunFire V20z's
for compute, for example.

The former certainly suffered from platform constraints and a fairly rigid
'stack', but the latter was far more flexible and various teams within Sun
worked closely with several potential customers on the proof of concept.
Unfortunately this fell apart thanks mainly due to the commercials and some
concerns with how the platform was configured within the context of security
and ensuring appropriate segregation of data.

~~~
dekhn
Ah, the SunFire. It's hard to compete with the rest of the world when you
design a custom internal bus for your x86 product.

I like that the last sentence you wrote could easily describe today; many
customers still care very much about the security context and the data
segregation.

------
jtchang
While I'm not exactly a fan of Oracle I wouldn't dismiss them so easily.

Due to business reasons there are lots of applications that companies would
rather not put outside their own network. Some that come to mind include HR,
payroll, and billing.

Maybe Oracle can capture some of that value in the form of data center as a
service?

------
Patryk
It's intriguing how often HP's public cloud offerings are omitted from the
conversation. I would think there would be a lot of interest especially
because they're a heavyweight yet are using open standards (i.e., OpenStack).

No disclaimer: I don't work for HP (but I have used hpcloud)

------
kylelibra
Seems like this can only be good for consumers.

~~~
adventured
Assuming it doesn't lead to a wave of lawsuits and general anti-consumer
behavior as Oracle tries all means at its considerable ($11b profit, $39b
cash) disposal to 'compete.'

------
ashayh
From my anecdotal experience, the majority of companies and projects using
oracle products, do not actually need them, and could easily get by on free
databases.

------
actionscripted
Me to OP: what's on?

~~~
drivers99
[http://www.urbandictionary.com/define.php?term=It%20is%20on](http://www.urbandictionary.com/define.php?term=It%20is%20on)

"This phrase is used after a bet has been made."

