The Six Five Team discusses Oracle Cloud World 2023.
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Transcript:
Daniel Newman: Patrick Moorhead, kick us off. Oracle CloudWorld, lots to cover there.
Patrick Moorhead: Yeah, so Oracle is such a diverse company. I mean, not only are they SaaS and still have even on-prem apps and on-prem databases, but they also have IaaS and cloud infrastructure and they have traditional infrastructure. So such a diverse company. Dan, five years ago people were wondering, what is this company going to do? They’re kind of the old tech company and to their credit, just come storming back.
First and foremost, Steve Miranda got up, he runs Oracle Fusion apps and announced exactly what you would expect. Two generative AI features and a new data platform for generative AI. And brought a bunch of partners on kind of singing the praises, but here’s what I loved is Steven went off script and I think it just shows the kind of company that Oracle is and the customers like talking about didn’t believe anything that the salespeople said and the implementation was a challenge, but they got through that. And I really appreciate that because, Dan, you and I sit in the audience just like watching these customer stores and they’ve got nothing. They have no constructive criticism. And to me it comes off fake. This came off very genuine.
Key messages. This was less about I think picking up market share, more about getting the installed base of customers to go in and dive into these generative AI features and also those customers who might be still on-prem with some of their features to get in the cloud. So this is going to go long, isn’t it?
Daniel Newman: No, man. You’ve got one minute.
Patrick Moorhead: I’m going to move this forward. So new Fusion data intelligence platform, right? It combines the data models, the AI, ML, analytics and apps. I think what we’ve seen over the last nine months is you have to have the models close to the data and this is what that does. And while most uninformed people think analytics are going away, that is ridiculous because technology is additive. We have analytics, ML, DL, and of course generative AI features. And finally, Steve rolled out multiple generative AI features across every part of their portfolio. ERP, SCM, CX, sales, marketing, pretty much across the entire gambit.
And while I don’t think this is as many features, the Oracle strategy is to put up not the 100 features that 10 will get used, but put in the 20 to 30 features that they know that their customers need and can activate that data and either save money or make or drive more revenue. OCI, big victory lap on HeatWave Lakehouse, very simple. You put MySQL in memory, it going to be really fast. Why the other vendors can’t do this, I don’t know. I love the middle finger charts showing Redshift, Databricks, Snowflake, Google BigQuery. I’m a fan of Google BigQuery, but when you pack MySQL into memory, it is just going to be fast.
Final comment on OCI. I’m leaving you a lot here, Dan. Very interesting. They had Ampere on stage and they’re an arm-based data center processor play. And a couple announcements there. First off, Clay Magouyrk, who runs OCI for Oracle said 95% of OCI plus new Fusion customers run on Ampere computing. That was a mind-blowing moment, right? I know you whispered to me or asked me, “Hey, I wonder what that means to revenue.” When we’re watching this, Oracle is a huge investor and I think has invested billions into Ampere. All I know is that it has to be a bunch. And I’m sure we could spreadsheet this out, but I’ll wait to do that. Dan, I left you a ton of content here, the Microsoft stuff. Go for it.
Daniel Newman: Listen, because there was so much going on, I want to just kind of boil it down to a couple of themes. The company, and this was really well articulated by Clay Magouyrk, but the full stack is really when you can take together the infrastructure layer and tie it to enterprise applications and industry applications. And what does that mean? Well, there’s the concept of building apps that are very specific to a use case in industries, financial services, supply chain use cases, and then there’s the actual applications for enterprise, which is ERP, CRM, all the things that we kind of regularly talk about.
What Oracle has done that’s very, very interesting, it kind of has quietly happened is it’s really created this virtuous circle of completeness in its offering that you can argue no one else, maybe Microsoft is doing this, but Microsoft doesn’t have the traditional core ERP database at nearly the scale that Oracle does. And the reason I point this out is Oracle is kind of increasingly becoming this gelatinous blob of capability to serve the entire enterprise.
Patrick Moorhead: Hey Dan, can you write a paper on that for me?
Daniel Newman: Called the gelatinous blob?
Patrick Moorhead: Gelatinous blob.
Daniel Newman: Listen, just stick with me now.
Patrick Moorhead: Yeah, your point is spot on.
Daniel Newman: Fastest in memory database, you’ve got hyperscale cloud infrastructure. You’ve got partnerships in peering globally with leading infrastructure companies. You’ve got platforms, you’ve got Cerner, an industry focused application that is basically one of a very small number of apps that’s globally used, compliant for highly regulated industries that ties together that enterprise app, that industry app, and plus the infrastructure layer.
This has been visible in the company’s recent performance and its growth. It is the fastest growth infrastructure play right now. It is. It’s had strong growth across cloud, but the infrastructure number has grown very, very quickly. So Clay rightfully did his victory lap. And let’s face it, I know we talked about this last week, but seeing Satya Nadella, who by the way had a nice chat with you and I yesterday, we should put that photo up, but seeing Satya-
Patrick Moorhead: It wasn’t just the two of us, of course.
Daniel Newman: It was just the two of us and the couple people behind us, but also sitting down with Larry and literally coming together and saying, look, we sort of know the world is hybrid multi, Pat. We’ve been saying this for a little while. We understand that we have customers that might see more benefit in one public cloud or another, but we want to bring the highest performance utilization of Oracle regardless of which cloud it’s in. And at the same time, we want to make an attractive reason for these two companies to be cross-selling. And obviously there’s got to be a reason those two want to work together. There’s someone they’re collectively chasing maybe out there.
The only other thing I’ll leave and then we’ll move on from this is I did want to give a shout-out to Steven Zivanic and his team we’ve worked closely with, we went to the Database Summit momentarily and they’re numbers, the MySQL Heatwave numbers are just mind-boggling, the performance. I think people have kind of not noticed maybe at scale how much it is outperforming all of its peers right now. And that’s put a lot of pressure. It’ll pressure innovation from the other hyperscalers, but it also is probably part of the reason that if latency and query speed and all that stuff is a priority, Oracle’s got a compelling story right now. And if you run Oracle on Oracle in Oracle, you’re going to get the absolute best of breed performance, which maybe you could call that an attempt to get lock-in or maybe you could just call that an attempt to build the best solution for customers so you could look at it across the continuum.
Patrick Moorhead: Yeah. Good analysis, Dan. One thing we never talk about is the cost base of Fusion, right? You have Salesforce and ServiceNow who have to sit on, they have to pay an AWS or an Azure or somebody to do all this goodness. So there’ve got to be some cost advantages in there as well, don’t you think?
Daniel Newman: I think we saw some companies like Zoom make big commitments to Oracle over the years because I think they were looking at those potential cost efficiencies.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
