John Chen

Private equity firm Silver Lake has appointed former Sybase CEO John Chen as a senior adviser. Chen had a long tenure at the SAP-owned enterprise mobility and database software and services company, having served as chairman and CEO since 1998.

SAP acquired Sybase in 2010 for $5.8 billion, but Chen stayed on until he stepped down just last Friday.

Chen was widely credited with turning Sybase around, as well as spearheading its moves into the fast-growing mobile enterprise arena.

In an interview with Bloomberg, the 57-year-old tech exec said:

“It’s time for me to relinquish the ownership of this franchise. I always thought about this like marrying off your daughter. You know it’s the right thing to do, you just want to hold on a little more — but it’s time to move on to other challenges.”

Joining the powerful Silver Lake, which is a big tech investor, appears to be that very challenge.

“I am very pleased to join Silver Lake, which is a central player in the global technology industry and really the only firm that works at large scale with a true tech focus,” said Mr. Chen in a statement.

Before Sybase, Chen was CEO and president of Siemens Pyramid, a unit of Siemens Nixdorf. He currently is on the boards of Disney and Wells Fargo. He is a graduate of Brown University and the California Institute of Technology.

“John will play a critical role in evaluating potential new investments and driving operational improvements and other strategic initiatives across our portfolio companies,” said Silver Lake managing director Charles Giancarlo, also in a statement. “His deep roots in the technology sector, with more than three decades of operational experience, as well as expertise on a range of political and economic policy issues, especially in Asia, will be extremely valuable.”

Hurd appeared on CNBC from the Oracle OpenWorld Conference in San Francisco. “There isn’t a customer we have that’s not on both an austerity plan and an innovation agenda at the same time,” Hurd told CNBC’s Maria Baritoromo in what I think was his first televised interview since joining Oracle in 2010.

He said customers are spending incrementally more of their IT budget simply storing the deluge of data they’re gathering, and repeated the company line that the Exadata line of database hardware helps both shrink the amount of data a company needs to store and then turn that data into useful information.

He also dodged a question about what he thinks is going on at his old stomping grounds, Hewlett-Packard, where he was CEO for five years. Asked where he thinks Oracle’s growth will come from in the near future — it has been rather acquisitive over the last year — he said the company will continue with its balanced approach, buying both companies and shares, and finish beating the market. “Whatever the market does, we’re going to beat it.”

Watch it below.

In an hour-long keynote address from the Oracle OpenWorld Conference in San Francisco, Ellison announced four key initiatives bolstering the company’s bona fides in the business of offering computing resources as a pay-as-you-go subscription, but also lobbed some criticism at rivals like Salesforce.com and SAP in the process.

Ellison disclosed four new Oracle products and services, including a new version of its database software dubbed 12c — the C is for “cloud” — that he said is tuned for the multi-tenant environments common in the cloud computing world, where software runs not only across several machines, but different physical locations.

Ellison also announced a new version of Oracle’s ExaData database machine, one which loads numerous databases that a company might use into a single machine. Ellison said the machine is designed to run databases “in memory,” meaning that they rely less on conventional hard drives and more on huge banks of flash memory chips. “You virtually never use your disk drives,” Ellison said. “Everything is in semiconductor memory. All your data is migration off old mechanical spinning disk drives and into memory.”

These “in-memory” systems also use strong compression technology to make the database smaller and thus allow it to run faster, but also cheaper. “Some applications will require a huge amount of capacity, and in some cases you can buy a much smaller machine,” Ellison said.

Oracle also announced two cloud services, one which Ellison described as “infrastructure-as-a-service,” the other a private cloud service where customers will be able to enjoy the benefits of public-cloud service provider like Amazon Web Services but on hardware that is installed on the customer’s property where it would be managed by Oracle employees. Ellison said this offering would be “identical” to Oracle’s existing public cloud service, where Oracle owns, manages and operates the hardware in its own data center and sells its computing capacity as a pay-as-you-go service, “except we run it on your floor.”

Ellison also launched a few jabs, reminding the audience that the first cloud computing company was Netsuite, a cloud-software company in which Ellison is himself a key investor, and that it first launched in 1998. Salesforce.com, run by former Ellison protege Marc Benioff, the largest supplier of cloud-based software, was launched in 1999. Ellison also compared cloud computing to the century-old business model of selling electric power as a service. “It’s a good idea, but it is an old idea,” he said. “The utility model has been with us 100 years or more.” He also said that Oracle’s new hardware is faster than hardware from the likes of IBM and SAP.

The disclosures from Oracle came as The Wall Street Journal reported that the company is close to announcing a deal with the Finnish wireless phone company Nokia under which it would license mapping and location data for use alongside its database software. Ellison also said it is working with the Japanese computing company Fujitsu on a new generation of SPARC chips that will go into a new servers. Oracle took over ownership of the SPARC chip architecture when it acquired Sun Microsystems in 2010.

But the questions stemming from the dispute don’t stop with the decision by Judge James Kleinberg ruling that Oracle must abide by the terms of promises it made to HP in 2010 when it settled an unrelated lawsuit concerning Oracle’s hiring of former HP CEO Mark Hurd.

First off for HP is the question of whether the damage to its Business Critical Server business unit, which sells the Integrity line of servers that use the chips, can be reversed. The damage is plain to see in HP’s financial results. For the first six months of the year, sales are off by $275 million, in a business unit that last year saw sales north of $1.1 billion. The uncertainty brought about by the lawsuit has hurt sales, and HP has made it clear it expects them to remain under pressure.

But it’s not lost sales that are hurting HP the most: A half-billion-dollar drop in sales at a company on track do $123 billion this year isn’t much to get excited about. It’s the profits. Legal filings made public over the course of the suit showed that HP derives a healthy portion of its profits from ongoing service and support contracts with companies that buy its Integrity servers. While HP doesn’t routinely break these numbers out in regulatory filings, documents showed that in 2010, HP derived about 15 percent of its profits on an EBIT basis (Earnings Before Interest and Taxes) on business related to Itanium.

Reversing the trend will be hard. For one thing, the legal fight isn’t over. Oracle has promised both to appeal the decision and to continue to press its counter-claims against HP in court, so the uncertainty among HP customers will continue, though as HP’s enterprise chief Dave Donatelli put it to me in an interview in June, the first step toward saving the BCS business is winning the lawsuit.

HP does have a plan to move Itanium customers onto more mainstream servers. It’s called Odyssey, and it involves building a new generation of Business Critical Servers on a more mainstream platform, probably Intel’s Xeon. Over time — and it would take several years — Integrity customers could be persuaded to move in this direction. Exactly how HP preserves the highly profitable service and sales contracts upon which it has relied all these years isn’t entirely clear. One key piece of the strategy would likely involve the creation by HP of a version of its Unix operating system, called HP-UX, that runs on Intel’s mainstream x86 chips.

For Oracle’s part, while its appeal is pending it will have to rejigger its plans and issue an update to its database software for Itanium systems. Existing customers had nothing to worry about in the first place. But it now faces the prospect of paying out a significant damages award to HP. Even if it is as high as $4 billion as many reports have suggested — and it likely won’t be — Oracle’s balance sheet, flush with almost $31 billion in combined cash and short term investments, can take the hit.

But why let it go that far? HP CEO Meg Whitman has referred to the historical relationship that existed between HP and Oracle as “one of the great partnerships in IT history.” And Oracle CEO Larry Ellison has said he likes Whitman.

There have been at least two rounds of settlement talks held before and during the trial. Now that the primary issue of the trial — whether Oracle was bound to stick to an agreement it made in 2010 — has been decided, perhaps there’s ground upon which to build the foundations of a third way out of the dispute.

Oracle’s point that the Itanium chip is nearing the end of its life has more merit than either HP or Intel would care to admit. There may indeed be a few more generations left of Itanium, but nothing can change the fact that the world of enterprise computing is turning its back on Unix and non-x86 chips. The research firm IDC noted in May that the size of the market for non-x86 servers as a percentage of the overall server market has declined to the lowest it has ever seen.

Both HP and Oracle have to respond to this. HP’s response is Odyssey. Oracle, which owns the legacy Sun Microsystems business of SPARC-based servers running Solaris, has its Exadata, Exalogic and Exalytics hardware systems, all of which are based on Intel x86 chips. As the migration away from Unix plays out, customers of both HP’s Integrity line and Oracle’s SPARC systems are going to be forced to choose a way forward.

Depending on the case, both Oracle and HP will be jockeying for this emerging segment of post-Unix customers. One would think they’d want to do so with the maximum amount of customer goodwill. These are specialized customers — shared customers were the basis of the partnership in the first place — who don’t make their computing choices lightly and who tend to stick with one vendor for a long time. For them, the sight of these two tech industry heavyweights fighting so bitterly must be getting tiresome.

Earlier this month, the company surprised analysts by reporting quarterly results that were better than anyone expected, and with the revelation that Oracle is now the second-largest provider of software-as-a-service after Salesforce.com, it has challenged the conventional wisdom that it was more of an old-school software company.

But that’s not the most interesting thing I noticed in looking over Oracle’s most recent financials. I saw that a lot of operating expenses were lower — $174 million lower, to be exact — in Oracle’s fiscal 2012 versus fiscal 2011. It looked to me like the Mark Hurd playbook is alive and well. It was the first thing that came to mind when I sat down with the Oracle president (and former CEO of both Hewlett-Packard and NCR) at Oracle’s offices in New York for his second on-the-record interview (here’s the first) with AllThingsD. A transcript of our conversation is below:

AllThingsD: Mark, Oracle had a pretty good quarter, when people expected it to be tougher. Software sales are up, hardware is down. But when I went back and looked at the results, I saw something that looked familiar: Shrinking expense lines in things like marketing and general and administrative. I thought that looked a bit like the old Mark Hurd playbook from HP, and NCR before that. Is that part of what’s going on?

Mark Hurd: I think it was a good quarter for us. The quarter behaved well across virtually every metric. Our pipelines were up. Our conversion rates, which is our ability to convert pipeline into orders, was strong. I think, to your point, we managed our expenses. I think, in the context, if you look at the quarter, we added 3,300 people to our sales organization. And those are really the quota-carrying people, plus the technical people who support the sales people. And we did that while keeping our sales and marketing expenses relatively flat year over year. I think anytime you can realign your capital so you can get it into R&D, or into sales, as we have, it tends to show up. We’ve got more opportunities than we can deal with right now, so we had to increase, and it’s a great thing for us.

And that increase is taking place at a time when some people expected you to cut back. Are you trimming in some places and adding in others?

We’re doing exactly what you’d expect us to do. We’re looking at everything in the company, and trying to ensure that we have our investments in the right place. It’s a team sport. We’ve done a lot of work across Oracle to be prudent in some areas with expenses. But at the same time, we’re investing. Our investment in Research and Development is up. As as you’ve seen, our investment in sales and technical people is up. We’re investing into the business because we think we’ve got a great hand and we want to go play it.

Are you investing in Europe, too? Everyone is concerned about their exposure there, given all the sovereign debt problems and the economic troubles there.

We invested during the year across all the geographies. We grew our U.S. sales organization. We grew our European sales organization. We grew in Latin America, and we grew in Asia. And we grew across most pillars of our business. We made material investments in our applications business, and our cloud applications business. We made investments in middleware — we think we have a very strong suite of middleware, and we want to increase our sales force there. We made investments in business intelligence. We think we have a strong offering with Exalytics, and we want to boost our efforts there. And we’ve made investments in engineered systems, and they’re showing up. If you look at the quarter, we booked almost as many systems in Q4 of 2012 as we did in all of 2011. So I think that’s a compliment to both the product and the capacity of the sales force.

Let’s talk about your engineered systems business, because I think that’s the newest piece that people are just beginning to understand. These are the Exadata, Exalogic and Exalytics systems you’ve been talking about. You’ve got the legacy Sun hardware business on one hand, but what’s fundamentally different about the engineered systems versus the traditional systems?

When you look at Sun, it’s a server line that has the SPARC chip and the Solaris operating system, and it has a very long history. So there’s a couple things we’ve done. Exadata is really a little different than a traditional Sun server. It’s a combination of five different technologies. It has a lot of DRAM memory in it. It has a lot of flash memory in it. It’s got incredible compression technology. We can take a database and shrink it and make it one-tenth the size that it was before. We network it with Infiniband, which gives us 10 times better performance inside it. When you shrink the database by a factor of 10, and run the data inside the computer 10 times faster, you’re doing what you did before 100 times faster. A report that used to take 100 minutes to generate now takes one. And, by the way, you can turn that into a cost benefit or a performance benefit. By that I mean, if you’re happy with 100 minutes, you need only one-tenth of the computer. Or you can run 100 reports in the time it used to take you to run one. It also really combines a server, storage and a database. It’s all of those things, and that’s why we call it an engineered system. And just as important as all of that is the fact that we put it together for you, we provision it for you. Our engineers take the Exadata and integrate everything, which normally you’d have your own people do.

And then you have specific flavors of these systems that are designed for specific industries, say retail or finance or health care?

Depending on how far up the stack goes. Think of Exadata up through the database layer. Exalogic goes up through the middleware layer. Exalytics takes the foundation of Oracle’s business intelligence suite. So they’re three different engineered systems that are built around different parts of the Oracle software stack.

So where does that leave the traditional Sun hardware business?

I think when you speak of Sun, you think of the T Series computer line and the M Series computer line. Larry [CEO Larry Ellison] has done a lot of investments in that core line. So in the traditional server line we’ve done new SPARC silicon, the T4, we’ve brought out a new version of the Solaris operating system, all in an effort to drive better performance and total cost of ownership. And we think now, as we push new releases of SPARC, we think we’re going to have the highest-performing silicon in the computer industry. No one argues that Solaris is the most advanced operating system of the Unixes that are available today. Now we’ve also done something new. We’ve introduced a SPARC Supercluster, and that’s all those different pieces in Exadata, built on a SPARC chip and running Solaris. So if you’re an older Sun-SPARC customer and want the benefit you get from Exadata, but you don’t want to switch over to Intel and Linux, which is what Exadata is built on, you can get them and keep SPARC and Solaris. We’re investing into the Sun base.

That brings me to another interesting point. Without diving too deep into the circumstances around the departure of Keith Block, he got caught in court documents saying some things about Sun products; and earlier, there were some statements made by Larry about letting the business around some older commodity products — Sun products, products where the profit margin is lower — shrink. Obviously you’re not going to defend what Block said, but at the same time, you’ve got Larry saying that it’s okay with him if the sales of certain hardware products fall to zero. Putting myself in the shoes of a longtime Sun customer, I wonder if you can unpack those two ends of a spectrum for me?

The best thing to do is tell you what we’re doing. We’re interested in selling intellectual property that differentiates Oracle in helping our customers run their IT better. That’s what we’re focused on. Those things manifest themselves in the T4 chip and Solaris 11 and SPARC Supercluster, and Exadata and Exalogic, and so on. A product that we bring to the customer that merely passes through our distribution channels and passes through our books, we don’t think we add a lot of value to that. We continue to do it mainly, though with less emphasis, because the customer has asked us to do it. Our view is that Oracle adds value where we can bring to bear differentiated intellectual property that gives people a better, more advanced solution that helps them do something cool and exciting.

Let’s talk about the cloud. Larry said Oracle is on track to be the No. 2 software-as-a-service (SaaS) provider after Salesforce.com, after all those acquisitions you’ve made. Oracle has always been kind of a traditional on-premise software player. How do you see the cloud strategy shaping up?

Let me first say this: You have to separate “cloud” from SaaS. First, there’s an incredible amount of Oracle technology running in the cloud: Oracle databases, Oracle middleware, Exadata, Exalogic. … So if you asked us to give us to give you cloud revenue, it would be huge. But that’s separate from SaaS. Just to be clear: We are No. 2 today in SaaS; we have roughly a billion dollars in SaaS revenue. And we’re just getting started. Our stuff is only just now hitting the market. We will have most of our Oracle portfolio running as SaaS on the Oracle cloud by the end of the calendar year. And when you look at our cloud, it’s best on our technology, running our apps. And by the way, that other SaaS company you mentioned — I can’t remember their name — their stuff is built on Oracle. And it was built three decades ago, in the ’90s. Our stuff is fresh, it’s new and modern and built on Fusion middleware.

Speaking of acquisitions, are you still in the hunt? You did Taleo and RightNow and Collective Intellect recently in the SaaS space. Are you still looking around?

We’ve said we’ve got a balanced capital allocation strategy. We’ve been big buyers of our stock. We’re increasing our dividend. And we’re continuing to look at deals that make sense. Larry has said that sometimes the best growth in Oracle’s history has been during economic downturns. And it’s because so many properties become available.

Did you kick tires on Quest Software?

I can’t comment on M&A matters.

When I talked to Meg Whitman at HP earlier this month, she talked about her desire to have a better relationship with Oracle, and how HP and Oracle crafted one of the “great partnerships in IT industry history.” It sounded a little like an olive branch to me. You’re unique in that you sat on both ends of that partnership at various times. Do you share her sentiment?

I can’t comment on that.

You’re coming up on two years at Oracle. Tell me a little about the division of labor. You work with Larry and CFO Safra Catz. How does it work?

It’s just like Larry said at D: All Things Digital. [See the full video here.] He does a lot on products, as he said. I run the revenue, and Safra runs most of our operations. And then, to be blunt, the three of us come together on the strategic issues, and we talk about the issues that cross the areas.

Perhaps more than any other tech figure in Silicon Valley, Larry Ellison — now also trying to become the proud owner of Hawaii’s Lanai — is, for lack of a better word, the man.

It’s a bit about endurance (he’s been at it since 1978, when he founded Oracle), a bit about success (the database giant still remains a very powerful force in the industry), a bit about spoiling for a fight (Hewlett-Packard, SAP, any small cloud company that irks him) and a lot about style (America’s Cup sailing, his gazillionaire Ironman persona and, for goodness sake, he is planning on buying an entire Hawaiian island, presumably for a lair). Ellison has the kind of long-term and powerful perspective that is rare in the app-happy Web 2.0 era of small ideas and too-big valuations.

In other words, he’s the real deal.

So please pull up a chair and enjoy what turned out to be one of the highlight interviews of the 10th D: All Things Digital conference, which is essentially Ellison very, very unplugged:

]]> http://allthingsd.com/20120621/larry-ellison-tells-it-like-it-is-the-full-d10-interview-video/feed/ 0 http://allthingsd.com/20120614/its-time-for-an-internal-memo-dibble-takes-over-all-tech-at-yahoo/ http://allthingsd.com/20120614/its-time-for-an-internal-memo-dibble-takes-over-all-tech-at-yahoo/#comments Fri, 15 Jun 2012 05:06:21 +0000 Kara Swisher http://allthingsd.com/?p=220638

Even though he is interim CEO, Ross Levinsohn just made a significant change in Yahoo’s tech organization, putting David Dibble in charge of both central technology and core platforms.

Previously, Dibble had been running technology and operations.

The move puts everything from Yahoo’s vast databases to its infrastructure that serves consumers to its advertising products under Dibble.

He is not, as some at Yahoo have perceived the new role, in charge of consumer product development itself. That role still remains with several execs, including Shashi Seth and Mickie Rosen. Yahoo is reportedly looking for a more senior product exec, as well as a new ad head.

But — since it’s Yahoo — the shift is not sitting well with some at the company, since it gives the man in charge of IT a much more expanded role in areas beyond his usual purview. One person likened it to “having an architectural firm run by a plumber.”

Ouch! Still, Dibble is well-regarded as an operator and a technologist and considered one of the more no-nonsense execs at the company.

As part of the move, another longtime Yahoo exec, Mark Morrissey, moves under Dibble as chief of operations for engineering. He used to report directly to the CEO and has held a number of jobs at Yahoo, including working on its search alliance with Microsoft.

Here’s the internal memo about the changes:

Yahoos:

Nothing will enable us to win as much as our ability to execute at the highest levels. We have incredible talent here. We have one of the largest audiences in the world, and we have a myriad of experiences that engage and delight users globally. It’s imperative that Yahoo! execute and operate in a world-class manner. When combined with a true focus on our priorities, growth and prosperity will be the natural outcome. Alignment of our organization and talent against a clear set of actions and goals is essential. To further enable our efforts, I’m pleased to announce the following organization alignment, effectively immediately.

We are bringing together our Central Technology and Core Platforms into one team that will be led by David Dibble. This provides the consumer business units with a single technology team responsible for platforms, technology infrastructure, engineering, science, and operations. It also unifies our key talent behind major projects including Rewire, Alpha, Agile, video technology, mobile technology, personalization and ad targeting, security, and sales tools.

Great technology relies fully on great execution. Great content cannot flourish without great technology. World-class experiences are fully wedded to flawless execution. David has proven to be a world-class operator with a team that operates at remarkable levels at massive scale. Thus, I’ve asked that David also take on broader operating responsibilities for Yahoo!

As executive vice president of technology and operations, David will lead diverse, dynamic, cross-functional program management initiatives and hold teams accountable for key deliverables, including uniting stakeholders in a cohesive product development lifecycle process. This ensures we have the right business case and strategic underpinnings to make our next generation products successful, and that teams are aligned on strategy, objectives, and goals from product conception through launch and subsequent iterations. Product-specific engineering teams for Connections and Media will continue to report into those business units and work closely with the combined group.

Additionally, I am thrilled to announce that Mark Morrissey becomes chief of operations for engineering, reporting into David. In this expanded and pivotal role for our company, Mark leads teams focused on product operations and lifecycle, service engineering, and priority program transitions. He is point for continuing the engineering Alpha initiative and Rewire, our effort to increase datacenter efficiencies. Critical to our future will be Mark’s role in driving our product operations and lifecycle. We must dramatically accelerate how we conceptualize, develop, and go to market with our products. We also must ensure that the company as a whole is fully aware and does their part to capture the potential opportunity. We need to assure the highest quality performance, maximize our marketing efforts and drive both user engagement and monetization. Mark will ensure that we have an agile, yet complete process.

John Kremer continues to lead business operations and the execution of the Alpha initiative, reporting into Mark. John is the executive lead for change management and ensuring the Alpha initiative is executed across the organization with quality and cohesion.

Please join me in congratulating David, Mark, and John. The leadership team and I are committed to making things easier, removing obstacles to our success and enabling Yahoo! to accelerate. I appreciate everything you contribute to the company daily; your passion, drive, and determination are inspiring. Together we are creating the future and defining what it means to be the world’s leading technology powered media company. Much like you, I’m playing to win. We’re in the midst of a revival!

Ross

]]> http://allthingsd.com/20120614/its-time-for-an-internal-memo-dibble-takes-over-all-tech-at-yahoo/feed/ 0 http://allthingsd.com/20120525/dell-is-on-the-acquisition-prowl-again-now-looking-at-quest-software/ http://allthingsd.com/20120525/dell-is-on-the-acquisition-prowl-again-now-looking-at-quest-software/#comments Fri, 25 May 2012 15:49:06 +0000 Arik Hesseldahl http://allthingsd.com/?p=212481 Those always-chatty bankers are at it again. Today they’ve told Bloomberg News that Dell is one of several companies in talks to acquire Quest Software.

Quest is a 25-year-old company that last year reported $857 million in sales and a $44 million net profit. Its speciality is creating management systems for enterprise software.

One product is called SharePlex, and it’s described as an Oracle replication product that promises to make a live copy of an Oracle database without slowing down its operation and availability. Another product for the Oracle environment is Toad, a tool that automates a lot of the maintenance tasks associated with running an Oracle database. Toad appears to be a flagship product as there are a few other versions of it for Sybase and SQL Server. Quest also builds tools to manage and maintain some Microsoft products like SharePoint and Exchange.

Quest’s market cap was just north of $2 billion as of yesterday. On today’s word of deal talks, its shares surged by 95 cents, or nearly 4 percent, to $26.13. It has been the subject of regular speculation all year that it might be taken out in an acquisition and as a result its shares have inflated by about a third during that time.

The purported offer from Dell is one of several coming in response to Quest’s agreement to be acquired by Insight Venture Partners in a deal to go private at $23 a share. The deal’s terms provide for a “go shop period” that allows the company to basically shop around for a better offer. It may get one. J.P. Morgan values Quest at $28 a share based on its sales and cash flow alone.

Also, Quest is right in the wheelhouse of the sort of things that Dell is trying to emphasize as it seeks to transform itself into an enterprise hardware, software and services concern, and de-emphasize its reliance on its traditional PC business. By at least one metric, that strategy is working — a little. Dell’s consumer PC business, for which it is best known, amounts to about one-fifth of revenue, while its enterprise-oriented businesses amount to about 50 percent. The wrinkle is that the enterprise bit includes PCs.

]]> http://allthingsd.com/20120525/dell-is-on-the-acquisition-prowl-again-now-looking-at-quest-software/feed/ 0 http://allthingsd.com/20120319/vaunted-yahoo-techie-departs-for-microsoft-surprised-me-neither/ http://allthingsd.com/20120319/vaunted-yahoo-techie-departs-for-microsoft-surprised-me-neither/#comments Tue, 20 Mar 2012 03:29:01 +0000 Kara Swisher http://allthingsd.com/?p=188072

One of Yahoo’s most respected researchers, Raghu Ramakrishnan, who is the author of one of the most famous database textbooks, “Database Management Systems,” has left the Silicon Valley company to join Microsoft. He was also critical to the development of much of Yahoo’s personalization technology.

Sources said the chief scientist for search and cloud platforms at its Yahoo Labs unit will be a fellow on the software giant’s SQL team.

Ramakrishnan, who has been at Yahoo since 2006, is one of many key researchers to depart before what is expected to be a gutting of the company’s research division in upcoming layoffs and other cuts by new CEO Scott Thompson.

None of this exodus of high-level research talent comes as a surprise. Prabhakar Raghavan, the well-respected head of the Yahoo Labs unit and also recently its head of strategy, has recently left the company to take a job at Google.

Ramakrishnan came to Yahoo from a professorship at the University of Wisconsin-Madison. According to his bio from Yahoo, he was the “founder and CTO of QUIQ, a company that pioneered crowd-sourcing, specifically question-answering communities, powering Ask Jeeves’ AnswerPoint as well as customer-support for companies such as Compaq.”

A Yahoo spokesperson declined comment (but, trust me, it is true).

]]> http://allthingsd.com/20120319/vaunted-yahoo-techie-departs-for-microsoft-surprised-me-neither/feed/ 0 http://allthingsd.com/20120315/exclusive-bermanbraun-buys-most-of-shelby-bonnies-whiskey-media/ http://allthingsd.com/20120315/exclusive-bermanbraun-buys-most-of-shelby-bonnies-whiskey-media/#comments Thu, 15 Mar 2012 16:30:32 +0000 Kara Swisher http://allthingsd.com/?p=186692

In a deal that was just signed, longtime Silicon Valley exec Shelby Bonnie has sold his social publishing start-up, Whiskey Media, to Santa Monica-based entertainment and interactive production company BermanBraun.

As part of the deal, BermanBraun will get three key sites of San Francisco-based Whiskey, including video entertainment-focused Screened, tech-testing site Tested, and Anime Vice, which covers anime and manga comics. It will also acquire Whiskey’s content-publishing platform.

Two other sites owned by Whiskey — games-oriented Giant Bomb and comic-book database Comic Vine — will be sold to another media company, which is rumored to be CBS Interactive.

Heaped on top of the niche content, aimed at passionate fans, Whiskey mixes in a lot of social networking, as well as user-generated content, along with its professional fare.

Terms of the deal were not disclosed.

But the major reason for the acquisition is that BermanBraun — which also makes popular sites for large portals such as Microsoft’s MSN (the Wonderwall celebrity site and Glo, aimed at the women’s lifestyle arena) and AOL (upcoming sites on weather, men and pets) — needs to be able to scale its online content production. The Whiskey platform should be able to allow it to more easily grow and create new sites more quickly, as well as mine data across them.

“With the addition of Whiskey’s first rate team and powerful, state of the art publishing, data and social tools platform, we will be able to further enhance our user experience and engagement, and provide our advertising partners with unparalleled data insights,” said Lloyd Braun and Gail Berman, who run BermanBraun, in a statement. “One of the other great parts of this acquisition is that we will have Shelby Bonnie in our lives. We have enormous respect for Shelby personally and professionally, and his insights, relationships and acumen will be invaluable to us.”

Bonnie, who was once CEO of CNET, which he helped found, added: “I have had the pleasure of knowing both Lloyd and Gail for years and they are two incredibly high integrity people who bring passion and creativity to the interactive space. As we see a dramatic changes in the whole media landscape, success will demand new skills and talents. BermanBraun’s content skills and vision joined with the Whiskey platform will create a combination that I believe is without equal. I couldn’t be more excited for the combination.”

Here is a video interview I did with Bonnie in mid-2010 about Whiskey:

]]> http://allthingsd.com/20120315/exclusive-bermanbraun-buys-most-of-shelby-bonnies-whiskey-media/feed/ 0 http://allthingsd.com/20120312/breaking-yahoo-sues-facebook-for-patent-infringement/ http://allthingsd.com/20120312/breaking-yahoo-sues-facebook-for-patent-infringement/#comments Mon, 12 Mar 2012 20:15:52 +0000 Kara Swisher http://allthingsd.com/?p=184932

In what is either the boldest gamble of its history or the most boneheaded, Yahoo has filed a massive patent infringement lawsuit against Facebook.

The attack by the Silicon Valley Internet icon against perhaps the most powerful consumer social networking site today — also based in tech’s heartland and also an important partner of Yahoo — is sure to be a controversial one, pitting Yahoo against a company that has surpassed it handily in recent years in regards to popularity among consumers.

“Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” Yahoo’s lawsuit reads, in part.

That includes, Yahoo alleges, Facebook’s popular News Feed, advertising methods, privacy settings and more. The company adds that Facebook has been “free riding” on Yahoo’s intellectual property and that royalty payments alone will not suffice.

So what does Yahoo want for this alleged free ride? Triple damages and to enjoin Facebook from operating by using said patents.

The 19-page lawsuit over 10 patents — related to advertising, privacy, customization, messaging and social networking — comes as Yahoo is seeking to right itself under new CEO Scott Thompson.

Multiple sources said he is primarily driving this new aggressiveness from Yahoo.

Since Yahoo told the New York Times that it was considering such a move last week, the issue has been widely debated within the company, with many top techies there opposed to it, due to the company’s longstanding ethos of using patents for defense rather than offense.

Thus, the decision to move was closely held, sources said, with only Thompson and legal chief Michael Callahan largely working on it.

Still, patent lawsuits have become ever more prevalent among tech companies, as they seek to battle for advantage in a rapidly changing competitive landscape. Apple, Google, Microsoft and others are involved in several legal actions, although they are largely related to mobile technology.

Yahoo’s lawsuit is the most prominent in the social networking arena, a sector that has seen a huge explosion of late. Its timing could not be worse for Facebook, since it is in a quiet period for its upcoming IPO, which is expected to value the company at close to $100 billion.

Yahoo has done this kind of thing before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock.

Yahoo is shaking Facebook down for much more here and with much higher stakes for both companies. If successful, Yahoo could seriously damage Facebook’s initial public offering; if not, Yahoo will cement its growing reputation as a company with nothing to lose, whose value is built not on its current business, but on non-operating assets.

More importantly, at least initially, the move did nothing to boost Yahoo’s moribund shares — the stock was down about one percent to $14.49 in after-hours trading.

More to come, but here is the entire document below. The lawsuit has been filed in San Jose, Calif., federal court.

Lastly, the official PR back-and-forth:

Said Yahoo, in its statement:

“Yahoo! has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed. These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.”

Facebook, obviously, disagrees, and also threw in a jab about the lack of discussions over the issue between the pair:

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.”

I’ll admit to also being puzzled about the strategery here, but I am sure there will be much more to come.

Until then, read on:

Complaint

And here is what I wrote last week on the subject:

Apparently, Yahoo’s new motto: If you can’t beat ‘em — and it can’t — sue ‘em.

That would be Yahoo — the perpetual 98-pound weakling of the Internet these days — threatening powerful Facebook, which had cleanly bested it by attracting hordes of users with a plethora of popular products and services.

Yahoo has already lost its audience to Facebook, which was most recently followed by its frittering away a commanding lead in display advertising, too.

That would also be the Yahoo whose most recent success in improving its increasingly tenuous connections with customers was, in fact, by deeply integrating Facebook’s social hooks into its Web properties.

That would be the Yahoo which has failed time and again to innovate its own offerings so drastically over the years that it has now apparently decided that its first and best strategic move under Thompson’s rule is a shakedown.

Such a cynical move on rights Yahoo has long held seems more a play for the cheap seats of Wall Street, given that the company needs to look like it is doing everything it can to turn things around right now as it faces a proxy challenge.

First, it ended difficult talks with its Asian partners, Alibaba Group and SoftBank, over selling back lucrative stakes there.

Now, according to sources, Yahoo’s Thompson has actually been trying to make very nice with activist shareholder Daniel Loeb of Third Point — on-the-down-low chitchats that might have played a part of this latest unusual move.

At least Kodak had a good excuse. The once iconic camera company had recently been trying to take advantage of its trove of patents as a way to stave off declaring bankruptcy.

That didn’t work for Kodak, and it will also not work for Yahoo, whose only real option is to try to innovate its way out of the mess it has landed itself in.

You know, with good ideas.

Instead, the company’s leadership has opted for a road that could rain down trouble and paint Yahoo as a company bereft of talent to win any other way.

And while a range of intellectual property lawsuits have broken out all over the digital sector, involving Apple, Microsoft, Google and many others, such a strategy for Yahoo could be dangerous if it fails in its legal effort to take advantage of its 1,000-plus patents, including those related to search and advertising.

Others — including such tech luminaries as LinkedIn’s Reid Hoffman, who co-owns the seminal Six Degrees patent for constructing a networking database and system — hold a number of critical social networking patents, too, so who knows where this thing will go.

Nonetheless, Yahoo has decided to emulate those companies with one of the few valuable assets it might have, waging its little war, right as Facebook is in the midst of its initial public offering period.

Yahoo has done this before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock (which it then, of course, sold too soon).

That certainly could happen here, with Yahoo managing to grab a chunk of Facebook’s pre-IPO stock.
That would mean that Yahoo’s most valuable asset would be those shares, as well as its stake in Asian companies it bought a while back for a bargain and now makes up a bulk of the company’s valuation.

As to Yahoo’s core business — investors consider it almost entirely worthless.

And let’s not forget: Facebook could also sue right back, which it very well might do. Or, perhaps, cut off agreeable ties that have aided Yahoo in recent years.

In other words, in poking Facebook, Yahoo might now learn what it is really like to be de-friended.

]]> http://allthingsd.com/20120312/breaking-yahoo-sues-facebook-for-patent-infringement/feed/ 0 http://allthingsd.com/20120228/so-its-the-kodak-strategy-for-yahoo-the-last-refuge-of-the-vaguely-patented/ http://allthingsd.com/20120228/so-its-the-kodak-strategy-for-yahoo-the-last-refuge-of-the-vaguely-patented/#comments Tue, 28 Feb 2012 14:00:19 +0000 Kara Swisher http://allthingsd.com/?p=178658

It was Yahoo legal head Mike Callahan who had the thankless task yesterday of calling Facebook’s general counsel Ted Ullyot to tell him the Silicon Valley Internet giant was intent on pursuing patent lawsuits against the social networking giant.

The charge was being led by Callahan, as well as Chief Product Officer Blake Irving and, especially, Yahoo’s new CEO Scott Thompson.

Much of Yahoo’s senior leadership had no idea of the impending move until Callahan informed them it was about to happen at meeting Monday.

Facebook had known of the patent concerns of Yahoo for some months — the issue had also gotten some coverage in the media — but had not engaged formally on the topic, several sources said.

So, the suddenly aggressive call also apparently blindsided Facebook, even though it had been aware of the possibility of such an outcome.

Thus, it had little time to respond, since Yahoo was also simultaneously briefing the New York Times, according to numerous sources at both companies, and then released an astonishing statement to the newspaper:

“Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property. We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights.”

Apparently, Yahoo’s new motto: If you can’t beat ‘em — and it can’t — sue ‘em.

That would be Yahoo — the perpetual 98-pound weakling of the Internet these days — threatening powerful Facebook, which had cleanly bested it by attracting hordes of users with a plethora of popular products and services.

Yahoo has already lost its audience to Facebook, which was most recently followed by its frittering away a commanding lead in display advertising, too.

That would also be the Yahoo whose most recent success in improving its increasingly tenuous connections with customers was, in fact, by deeply integrating Facebook’s social hooks into its Web properties.

That would be the Yahoo which has failed time and again to innovate its own offerings so drastically over the years that it has now apparently decided that its first and best strategic move under Thompson’s rule is a shakedown.

Such a cynical move on rights Yahoo has long held seems more a play for the cheap seats of Wall Street, given that the company needs to look like it is doing everything it can to turn things around right now as it faces a proxy challenge.

First, it ended difficult talks with its Asian partners, Alibaba Group and SoftBank, over selling back lucrative stakes there.

Now, according to sources, Yahoo’s Thompson has actually been trying to make very nice with activist shareholder Daniel Loeb of Third Point — on-the-down-low chitchats that might have played a part of this latest unusual move.

At least Kodak had a good excuse. The once iconic camera company had recently been trying to take advantage of its trove of patents as a way to stave off declaring bankruptcy.

That didn’t work for Kodak, and it will also not work for Yahoo, whose only real option is to try to innovate its way out of the mess it has landed itself in.

You know, with good ideas.

Instead, the company’s leadership has opted for a road that could rain down trouble and paint Yahoo as a company bereft of talent to win any other way.

And while a range of intellectual property lawsuits have broken out all over the digital sector, involving Apple, Microsoft, Google and many others, such a strategy for Yahoo could be dangerous if it fails in its legal effort to take advantage of its 1,000-plus patents, including those related to search and advertising.

Others — including such tech luminaries as LinkedIn’s Reid Hoffman, who co-owns the seminal Six Degrees patent for constructing a networking database and system — hold a number of critical social networking patents, too, so who knows where this thing will go.

Nonetheless, Yahoo has decided to emulate those companies with one of the few valuable assets it might have, waging its little war, right as Facebook is in the midst of its initial public offering period.

Yahoo has done this before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock (which it then, of course, sold too soon).

That certainly could happen here, with Yahoo managing to grab a chunk of Facebook’s pre-IPO stock.

That would mean that Yahoo’s most valuable asset would be those shares, as well as its stake in Asian companies it bought a while back for a bargain and now makes up a bulk of the company’s valuation.

As to Yahoo’s core business — investors consider it almost entirely worthless.

And let’s not forget: Facebook could also sue right back, which it very well might do. Or, perhaps, cut off agreeable ties that have aided Yahoo in recent years.

In other words, in poking Facebook, Yahoo might now learn what it is really like to be de-friended.

]]> http://allthingsd.com/20120228/so-its-the-kodak-strategy-for-yahoo-the-last-refuge-of-the-vaguely-patented/feed/ 0 http://allthingsd.com/20120215/wolframalphas-stephen-wolfram-talks-about-new-paid-knowledge-engine-video/ http://allthingsd.com/20120215/wolframalphas-stephen-wolfram-talks-about-new-paid-knowledge-engine-video/#comments Wed, 15 Feb 2012 13:05:25 +0000 Kara Swisher http://allthingsd.com/?p=174272

Last week, when he was making the rounds of reporters and showing off the new paid version of his “computational knowledge engine” called WolframAlpha Pro, Stephen Wolfram, its eponymous creator, had a bit of a chat with me about where search and discovery on the Internet was going.

A techie’s techie, Wolfram introduced the free site several years ago, in an effort to improve how we search and find critical information, using its own deep, structured and curated database.

A kind of Not-Google.

Now, the next step is the Pro, which costs $4.99 a month ($2.99 for students) that offers souped-up data and image tools, among other things.

It’s pretty nifty, being able to spit out all kinds of cool charts and such, as well as upload your own data for crunching.

Here’s Wolfram talking about it all in a video interview:

]]> http://allthingsd.com/20120215/wolframalphas-stephen-wolfram-talks-about-new-paid-knowledge-engine-video/feed/ 0 http://allthingsd.com/20111220/oracle-falls-short-misses-consensus-on-weak-software-sales/ http://allthingsd.com/20111220/oracle-falls-short-misses-consensus-on-weak-software-sales/#comments Tue, 20 Dec 2011 21:21:51 +0000 Arik Hesseldahl http://allthingsd.com/?p=155536 Software giant Oracle reported quarterly results that fell short of the expectations of analysts, as licenses for new software rose only slightly and sales were $430 million below what analysts had forecast. Hardware sales were down by 14 percent year on year. Revenue from software license updates and product support revenues were $4 billion, up 9 percent.

The company reported a profit of 54 cents per share on $8.8 billion. The results fell short of the consensus view that Oracle would report sales of $9.23 billion and a per-share profit of 57 cents. Oracle shares, which had risen by 56 cents, or 2 percent, during the regular trading session, to close at $29.17, fell sharply in after-hours trading. As of 4:15 pm ET, Oracle shares were trading down $1.72, or 6 percent, on the news.

In the plus column, Oracle said its operating margin on a non-GAAP basis improved to 45 percent, and that it expects those margins to keep rising. Operating cash flow grew by 45 percent, as well, to $13.1 billion.

The company boosted its salesforce by 1,700 during the first half of the year, in an effort to boost sales of its Enterprise Resource Planning and Customer Relationship Management software products. Co-President Mark Hurd said the additional sales personnel should help sales improve in the second half of the fiscal year. (The quarter was Oracle’s fiscal second.)

The company said its board of directors approved a $5 billion share buyback and a 6-cent-per-share dividend.

CEO Larry Ellison said in a statement that sales of so-called engineered systems — essentially hardware that contains a lot of exclusive Oracle technology — surged versus the year ago period. Sales of Exadata database hardware and Exalogic servers both grew by 100 percent, he said. He also said that Oracle shipped its first SPARC SuperCluster during the quarter, and expects to commence deliveries of Exalytics Business Intelligence machines this quarter.

Oracle’s statement is below. I’ll be adding more to this post as I go through the press release, and will call out some highlights. The company is hosting a conference call shortly.

(The pitch-perfect image of the Team Oracle plane doing a dive during San Francisco’s Fleet Week was taken by Ingrid Taylar for About.com.)

Oracle Reports Q2 GAAP EPS Up 17% to 43 Cents; Q2 Non-GAAP EPS Up 6% to 54 Cents

Trailing Twelve Month Operating Cash Flow Up 45% to $13.1 Billion

REDWOOD SHORES, CA–(Marketwire -12/20/11)- Oracle Corporation (NASDAQ: ORCL – News) today announced fiscal 2012 Q2 GAAP and non-GAAP total revenues were up 2% to $8.8 billion. Both GAAP and non-GAAP new software license revenues were up 2% to $2.0 billion. Both GAAP and non-GAAP software license updates and product support revenues were up 9% to $4.0 billion. Both GAAP and non-GAAP hardware systems products revenues were down 14% to $953 million. GAAP operating income was up 12% to $3.1 billion, and GAAP operating margin was 35%. Non-GAAP operating income was up 3% to $3.9 billion, and non-GAAP operating margin was 45%. GAAP net income was up 17% to $2.2 billion, while non-GAAP net income was up 6% to $2.8 billion. GAAP earnings per share were $0.43, up 17% compared to last year while non-GAAP earnings per share were up 6% to $0.54. GAAP operating cash flow on a trailing twelve-month basis was $13.1 billion.

“Non-GAAP operating margins increased to 45% in Q2,” said Oracle President and CFO, Safra Catz, “and we expect those margins to keep growing. Operating cash flow over the last twelve months grew to $13.1 billion; that’s up a remarkable 45% compared to the preceding twelve month period.”

“We have expanded our worldwide sales capacity by adding over 1,700 sales professionals in the first half of this fiscal year,” said Oracle President, Mark Hurd. “We believe that this increase in our field organization combined with innovative new products like Fusion Cloud ERP and Cloud CRM will enable solid organic growth in the second half of this year.”

“Sales of our engineered systems accelerated in Q2,” said Oracle CEO, Larry Ellison. “Exadata growth was well over 100% compared to last year, and Exalogic grew more than 100% on a sequential basis. We shipped our first SPARC SuperCluster in Q2 and expect to begin deliveries of our Exalytics system and the Oracle Big Data Appliance in Q3.”

Oracle announced that its Board of Directors authorized the repurchase of up to an additional $5.0 billion of common stock under its existing share repurchase program in future quarters.

The Board of Directors also declared a quarterly cash dividend of $0.06 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on January 11, 2012, with a payment date of February 1, 2012.

]]> http://allthingsd.com/20111220/oracle-falls-short-misses-consensus-on-weak-software-sales/feed/ 0 http://allthingsd.com/20111031/on-the-verge-of-a-new-tech-site-which-finally-debuts/ http://allthingsd.com/20111031/on-the-verge-of-a-new-tech-site-which-finally-debuts/#comments Tue, 01 Nov 2011 02:18:14 +0000 Kara Swisher http://allthingsd.com/?p=138536

Tonight at 1 am PT, techies who have nothing else to do — that would be me! — can click onto a brand new tech site called The Verge.

Well, kind of — it’s the result of many months of work by the gang that defected from AOL’s popular Engadget tech powerhouse, set up temporary shop under the Web site name This Is My Next and busied themselves with creating The Verge.

I have another screenshot below of the new site that will be focused on news, reviews and features about tech, and which has been getting a final tweaking all today.

From my quick perusal, it has a vibrant and slick design, with a lot of packed boxes, swooshy movement and plenty of content.

Along with the launch, The Verge’s parent company — formerly doing business as SB Nation, focused on sports — will also transform into Vox Media.

In a chit-chat with Vox’s CEO Jim Bankoff, top exec Marty Moe and Josh Topolsky, The Verge’s Editor-in-Chief, the trio of former AOLers all said they were going to for the big time.

“We want to build the platform for talented native Web voices, in sports and tech for now, and then we plan to grow more verticals,” said Bankoff.

“We want to create more than a news site or blog about tech — the frustration at AOL was that we did not get the resources or manpower to realize that bigger vision,” said Topolsky.

(You’re speaking to the choir, brother!)

Said Moe: “We think this category has not had a large enough vision…not enough has been innovated over the years and we think it is a big opportunity.”

Topolsky said the site, along with a mass of original content from 30 writers, will also be helped by a strong database of information about all its topics and gadgets and also focus a lot on community input.

“What we want to do was graduate beyond the blog,” he said.

(Hmm…and here I just got the hang of this blog thing.)

Bankoff, who would not say how much Vox spent on launching The Verge — my back-of-the-envelope guess, several million dollars — said that costs were spread out between the tech and sports sites with centralized sales and product teams.

Initial launch sponsors are BMW, Sony and Samsung, said Moe, who is aiming to sell “major brand advertisers on the idea that we will be the premiere destination of consumer tech coverage.”

It has to grow past big sites like Engadget to do so, but Topolsky said that This Is My Next had three million unique visitors in the last month and more than 10 million page views.

“We have done that with a lot of editorials and in-depth reviews,” he said. “I think people are really hungry for great content and stories.”

As to competitors, Topolsky said that “this not to necessarily I win if you lose,” although his clear aim is to unseat sites like CBS-owned CNET, Engadget and Gawker Media’s Gizmodo and perhaps even newsier sites such as TechCrunch and AllThingsD (as if!).

“We are going to do the nuts and bolts stuff,” he said. “Somewhere between Engadget and Wired.”

Topolsky compared The Verge to a “boutique hotel — we have the same stuff everyone else has, but it is a much more elegant experience.”

Later, that will change, he promised, noting that “this is only version 1.0.”

Of course — but what else would you expect from a gadget site?

(Good luck and congrats to the entire The Verge team from AllThingsD!)

And here is another lovely screenshot, as promised:

]]> http://allthingsd.com/20111031/on-the-verge-of-a-new-tech-site-which-finally-debuts/feed/ 0 http://allthingsd.com/20111003/oracle-launches-exalytics-machine-probably-ending-spat-with-autonomy/ http://allthingsd.com/20111003/oracle-launches-exalytics-machine-probably-ending-spat-with-autonomy/#comments Mon, 03 Oct 2011 13:06:05 +0000 Arik Hesseldahl http://allthingsd.com/?p=127559 In a way, you could sort of see how the mishegas that has gone on between Oracle and Autonomy over the last few days was leading up to some larger purpose. For Oracle, that is. It’s not every day that Oracle CEO Larry Ellison deliberately provokes a very public fight with another company that results in back-and-forth press releases, leaked emails, publication of previously confidential PowerPoint slides and so on.

But apparently it all did lead up to something. For those just tuning in, here’s how it went down.

About two weeks ago, on Oracle’s quarterly earnings conference call, Ellison was asked by an analyst about Oracle’s position in the market for analyzing and pulling useful intelligence from unstructured data — transcripts of videos and contents of emails, and scores of other things that aren’t neatly arranged in databases. It’s kind of a big deal, as companies grapple with the so-called “big data” problem, and the question was a natural jumping-off point to discussing Hewlett-Packard’s $11.7 billion acquisition of Autonomy. Ellison, by way of an answer, portrayed unstructured data as a feature of the existing Oracle database software, called it “nothing new,” and then slammed HP for paying too much for Autonomy, the British software firm whose specialty happens to be — you guessed it — unstructured data. And, oh, by the way, Ellison said he took a pass on Autonomy when it had been shopped to Oracle because he thought the price was too high.

Much drama then ensued. Autonomy CEO Mike Lynch said his company had never been shopped to Oracle. Not so, said Oracle — and oh, by the way, you left your PowerPoint slides behind. “Those slides?” Lynch countered. “Never seen ’em before in my life. Maybe you need some help with your unstructured data, because you seem confused at the sequence of events.”

You see, the spat occurred just a few days before Oracle OpenWorld, and got Oracle in stories containing the phrase “unstructured data” numerous times.

And what did Ellison talk about in his keynote address Sunday night? Lots of things. One of them was an appliance called the Exalytics Intelligence Machine that does — guess what? — unstructured data. It’s designed, Ellison said, to do all its analysis while the data is loaded into the machine’s main memory, while four 10-core Intel Xeon chips make it scream on the processor side. “Databases run faster, everything runs faster if you keep it in DRAM, if you keep it in main memory,” he said, describing it as data analysis at the “speed of thought.” Structured data, relational data, unstructured data — it does it all, Ellison said. Now all that mishegas makes sense. It’s all about having the last word.

Ellison’s keynote — an hour and change long — is below. If you want to skip forward to the Exalytics stuff, it starts at about the 57-minute mark.

]]> http://allthingsd.com/20111003/oracle-launches-exalytics-machine-probably-ending-spat-with-autonomy/feed/ 0 http://allthingsd.com/20110926/hurd-at-last-oracles-co-president-talks-to-allthingsd/ http://allthingsd.com/20110926/hurd-at-last-oracles-co-president-talks-to-allthingsd/#comments Mon, 26 Sep 2011 21:15:37 +0000 Arik Hesseldahl http://allthingsd.com/?p=124948 It was a year and 20 days ago that the software giant Oracle announced it had hired Mark Hurd, the former CEO of Hewlett-Packard, as a co-president.

It was a pretty fast turnaround for Hurd, who resigned at HP following an unpleasant flap. But at the time, Oracle was in the process of acquiring Sun Microsystems and adding a sizable IT hardware business to its portfolio. Hurd, having earned a reputation for running a tight operational ship during five years at HP, was available and had already built a friendship with CEO Larry Ellison, who had publicly castigated HP’s board for acting rashly in dismissing Hurd.

Hurd has been quietly working away inside Oracle since then, getting to know its business and regularly speaking at small Oracle customer events, like one in New York in March. He’s also been a regular on Oracle’s earnings conference calls.

Now Hurd’s public profile at Oracle is about to rise considerably. With Oracle set to hold its annual Oracle OpenWorld conference in San Francisco next month, Hurd will be delivering a keynote address of his own and will from here on be taking on generally more public roles at Oracle. Make no mistake: He won’t be standing in for CEO Larry Ellison — what mere mortal could? — and Ellison will be doing two keynotes of his own at the Oracle event. But Oracle customers and investors will be seeing more of Hurd than they have before.

Hurd today granted AllThingsD his first on-the-record interview since joining Oracle. (We published a few highlights earlier today.) It comes on the heels of last week’s surprisingly strong earnings report by Oracle, which is what we talked about first. Hurd declined to offer any good-natured advice to Meg Whitman, HP’s newly named CEO, and also declined to answer any questions whatsoever about the circumstances surrounding his departure from that company 13 months ago. (I did ask, I swear!).

He also sort of diplomatically avoided naming competitors, so I’ll do that on his behalf. When he mentions database and middleware competitors, he means IBM. When he refers to “point products” and “boutique companies,” he’s referring to Salesforce.com and Workday, both cloud-based applications that compete with Oracle offerings.

The full transcript of our conversation is below.

AllThingsD: You had a pretty good quarter, in a tough environment. What in your view is going well at Oracle, and what could be better?

Hurd: Well listen, we released a quarter, that I think was a great quarter, that had 17 percent new license growth which is outstanding. In Q1 of 2011 we had 25 percent license growth. The good news is that it was 25 percent, and the bad news was that it was this year’s comparison, so when we grow 17 on top of 25 it’s just outstanding license fee growth. When you remember that last year we had 33 percent revenue growth and 33 percent earnings growth, these numbers we just posted are coming against a really good 2011. So they’re just outstanding. Also, we had Exadata growth that was just outstanding. We talked about that on the conference call. We had a good launch for Exalogic during the quarter. We had a growth in the T-series and M-series, which are the traditional Sun servers, during the quarter. Then I’d add that our industry verticals grew faster than Oracle overall. That’s an important strategy for us. We get deeper into these industry verticals, and they solve our customers’ most difficult problems. They’re very industry- and business-specific, and when you add to them the rest of our portfolio, it made for a strong quarter all the way around.

The other thing about the quarter is that you were strong in Europe at a moment when Europe seems to be melting down. Why is Oracle so strong when others would be seeing weaknesses? What is Oracle doing differently in Europe that others aren’t?

I wouldn’t comment on what others are seeing, because I only know what Oracle is seeing. It may be that it’s just Oracle-specific momentum more than anything else, but when I look at each segment of our business in Europe, if I actually read to you the growth rates of each of our product segments, it would sound very consistent. We didn’t have any one big deal in Europe, no big transaction. We didn’t have any one country that stood out. It was just broad-based, across-segments, across-countries performance. And the performance in Exadata, Exalogic, overall hardware growth, all very strong in the quarter. So forgetting the macro environment, Europe was a bright spot for Oracle last quarter and very strong. Also one quick note: Whenever you have a quarter in Europe where the applications growth in the quarter was 63 percent — when you grow like that it’s just great stuff.

Let’s talk about the hardware business a bit, which is still relatively new. You talked on the conference call last week about how you’re focusing more on hardware with higher content of Oracle intellectual property, and less on commodity stuff, what we often call the x86 servers that use chips from Intel and are less distinguished from what other companies offer. Where are you in that process and how long do you think it will take to get where you want to be?

I think you’ve got it right. We’re very focused on growth in Exadata and growth in Exalogic. You know this but it bears repeating, Exadata is a combination of server and storage and software technology integrated into a single solution that we think gives our customers a better total cost of ownership, or TCO. Some of the performance gains our customers are seeing are 30 or 40 or 50 even 70 times the performance improvement. Not 30 or 70 percent performance gains, but 30 or 70 times better than before. On top of all that we support them remotely, diagnose their problems remotely, sometimes before they even know they have them. And so growing that Exa line is very important to us. Now, next week at Oracle Openworld, we’re going to release more Exa lines and more technology than you’ve ever seen from the company at any one time. Last week we introduced an Oracle database appliance, which is very much an Oracle intellectual property stack focusing on mid-market and departmental solutions. While it’s not as big a system as an Exadata, it’s a manifestion of the same strategic directions we’ve had before. They’re integrated systems where we can bring a stack of value to our customers.

Your CEO Larry Ellison made a comment on the conference call last week that got a lot of attention: Essentially that Oracle would be okay with the x86 business going to zero. Now I know it’s a little more complicated than that. Would you care to revise and extend his remarks on that subject a bit?

What I would say is that we don’t have interest in selling products where there’s no Oracle intellectual property. We’re very focused on adding value to customers. If there’s no Oracle intellectual property in it, then you ought to buy it from someone else. We’re very focused on getting our technology into the market. We think we can do two things. All of our products are designed to be the best-of-breed, the best in the markets they serve, to work in heterogenous environments, to be open. That is clearly our strategy at every layer of our architecture. In addition to that, we vertically integrate some of these systems like we do in Exadata and like we do in Exalogic and like you’ll see in other manifestations over the next week, where we think we can deliver extreme performance, extreme TCO and extreme serviceability. If there’s some product that comes from a third party that just comes through Oracle where we add no value, that’s the stuff we have no interest in. If we add no value to it, you ought to buy it from someone else.

So that doesn’t mean you intend to get out of the x86 business entirely, only that you’ll want to sell hardware that is sold in combination with Oracle IP whether it’s software or something else.

Yes. We still have an x86 line. But Larry was trying to make a point.

Let’s talk about competitors. Who do you see showing up on deals you’re competing on? Who keeps you up at night?

We have competitors in the industry vertical markets that are really point products, and horizontal apps, there are some that are boutique companies that provide certain functional applications whether it’s in HR [Human Resources] or something like that. We certainly have competitors in database and middleware.

So it’s been a year since you joined Oracle. What’s it like working with Larry Ellison?

It’s great. It’s just great.

What defines success for you at Oracle? If we talk at this time next year, where do you want Oracle to be?

We’re releasing a whole new set of technology next week. Our opportunity is to drive that into the market and increase customer awareness of the portfolio. You’ve got all these smartphones running around the market. They’re basically computers in people’s hands, and they’re begging for data from enterprise applications, and those applications need to be modernized to make that happen. We can help our customers on innovation whether it’s e-commerce or any other environment they want to innovate in and at the same time we get the opportunity to make them more efficient. These engineered systems solutions deliver tremendous performance that help our customers server their customers better and help them get better efficiency at the same time. So we’ve just got a tremendous hand to play and that’s what we’re going to do.

You’ll be speaking at Oracle Openworld in San Francisco next week. What’s on your agenda?

I’ll be doing a lot of stuff. Larry has a keynote Sunday, and he’ll do another Wednesday, and I’ll be doing one Monday. But they’ll all be centered on our innovations and systems and software that we’re bringing to market, so that will be the primary agenda for the week.

Will we be seeing you in a much more public role at Oracle generally? Are you going to be more of a public face of Oracle going forward?

I have a job to do, so it won’t be to the exclusion of that. I spend most of my time working on customers and making sure we have the best team in the industry. Last year I’ve spent time on customers, people and products. I don’t see that changing. To the extent that we have things to announce I’m clearly going to be doing all that in addition. I’ve been seeing lots and lots of customers, and will be continuing to work on building our team and making sure I’m participating in the product process in every way possible. That’s what I’ll be focused on.

What are you hearing from those customers? What are they worried about? What are they telling you about their business?

They love our products, they love our people and want to get more deeply engaged with Oracle. It’s a huge opportunity for us, but it’s also a challenge, because frankly there’s a lot to be done. And frankly we can’t do everything, so we have to pick our spots to engage properly. It’s important for us to focus.

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