Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Oracle Looks to Conquer the Cloud as OpenWorld Conference Gets Under Way

As conferences go, Oracle’s OpenWorld is pretty big. It literally stops traffic. It’s one of a handful of events that not only fills San Francisco’s Moscone convention center but actually spills into the streets, blocking downtown’s Howard Street and earning the ire of local drivers.

The company says it expects to see 50,000 attendees this year, and is featuring more than 2,500 sessions presented by more than 3,500 speakers across 14 individual venues. And forget about booking a hotel room in San Francisco this week: People attending OpenWorld have booked nearly 98,000 hotel nights.

So what’s on the agenda? Expect to hear a lot about the cloud. Oracle’s latest update to its core database software, known as 12c, will be unveiled. It’s the first major revision to Oracle’s database software in about five years. The “c” naturally stands for cloud, which Oracle is going to be embracing in a significant way at this event.

The speeches kick off Sunday night with the first of two keynotes from Oracle CEO Larry Ellison. Co-President and former Hewlett-Packard CEO Mark Hurd is speaking twice as well, once on Monday and again on Thursday.

Oracle is likely to continue to challenge the notion that it’s on the defensive from companies like Salesforce.com. Ellison has publicly disparagedSalesforce and another cloud-based software company Workday, both of which compete directly with Oracle.

Salesforce (whose recent Dreamforce conference also blocked traffic) has built what’s forecast to be a $3 billion annual business selling customer relationship software that runs in the cloud, and its CEO Marc Benioff is a former Oracle exec and Ellison protégé. Workday, due for a $400 million initial public offering soon, is run by Aneel Bhusri and Dave Duffield, the founders of PeopleSoft, a company Oracle acquired in a hostile takeover. It offers a breed of software known as human capital management software used by HR departments at big companies.

Ellison and Benioff have feuded — sometimes publicly — over their competing visions of the cloud and how software should be delivered to large companies. Benioff is fond of saying that if a company ever takes delivery of a server at a loading dock, they’re not running the “true cloud.” Ellison — who also has a significant hardware business to consider — argues that big customers need a mixed approach: Where some will be happy farming out the work of managing the hardware to someone else, others will want to own it outright, while still others will want to mix and match. He’s also fond of pointing out that Salesforce is a big customer of Oracle’s database.

Oracle isn’t the only company arguing for the mixed cloud approach. IBM and Hewlett-Packard and Dell — hardware vendors all — tend to see the cloud in this way, as does Microsoft, which offers its products in both hosted and on-premise varieties.

Still, there’s no mistaking Oracle has come to embrace the “software-as-a-service” model long personified by Benioff and Bhusri as well as Netsuite, a cloud software player run by former Oracle exec Zach Nelson and in which Ellison is an investor. (Nelson is speaking at Openworld, too.) Oracle is pivoting toward delivering all of its software as a service, allowing customers to choose which approach best suits them. On Oracle’s last earnings call, Hurd made a point of calling out a long list of customer wins for cloud-based CRM and HCM offerings: Accenture, Adobe, Cisco Systems — where Benioff is a new director — Colgate-Palmolive and Proctor & Gamble are all running Oracle applications in the cloud.

Indeed, Oracle has said it is now the second-largest company offering software-as-a-service behind Salesforce itself. It reported $1 billion in bookings for cloud software in June. Expect an update on the size of that business in Ellison’s remarks.

Much of that growth has come from Oracle’s aggressive pace of acquisitions. It has been gobbling up cloud-based software companies such as RightNow and Taleo.

And Oracle’s service offerings don’t stop at software: They extend to hardware, too. Customers can purchase ExaData and ExaLogic hardware and then run them inside an Oracle-owned and -maintained data center. The point is to get the hardware up and running quickly without having to bear the time and expense associated with setting it up.

So, if you care about the cloud — and nearly everyone in enterprise IT does these days — it’s going to be an interesting week.


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