The Six Five Team discusses Oracle Database on Microsoft Azure.
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Transcript:
Patrick Moorhead: Larry Ellison and Satya Nadella were on stage maybe for the first time in Seattle. What on earth is going on? Cats sleeping with dogs. Dogs and… What’s happening?
Daniel Newman: I don’t know. Next you’re going to see Marc Benioff sit down there with them and then you know the world’s just come to an end.
Patrick Moorhead: No. Yeah. Benioff did work at Oracle for a while.
Daniel Newman: He’s a protege in many ways. At this point I think he’s created his own success, but he certainly did build some of those chops under the guidance of Larry Ellison. It was a little weird to see the two of them on that stage together, but at the same time, maybe one of the most indicative things to where the world is today. Also, let’s not be inaccurate. The two have had a fairly robust partnership around Cloud for some time.
Patrick Moorhead: Pairing, yeah, a lot of pairing stuff.
Daniel Newman: Yeah, there’s been a lot of pairing regions for Oracle’s Cloud that are sitting with Azure. There’s proximity, but here’s what’s going on is Oracle has some of the highest performance database capabilities on the planet. But as we know in the era of AI, having the data running in a hyperscale cloud provides access to a lot of AI tools. Microsoft has pretty much hitched its wagon to OpenAI, but it’s betting big on Azure AI services and on the ability for companies to build AI on top of their data in Azure. Oracle has these high performing databases that are basically used by every company on the planet, which we heard from some of these companies yesterday. They’re at this inflection between trying to do AI on-prem and trying to find this cloud euphoria, this perfect utopia for cloud and AI development.
The two companies had something the others want, workloads and utilization of AI services for Azure and of course, for Oracle users, the ability to benefit from all that data and all that high performance database capabilities in using the Azure ecosystem. I guess, Pat, when the two companies find something that the other is infinitely interested in consuming, you can find a way to put these two CEOs on stage together. But yeah, like I said, they have actually been pretty cooperative.
You know, Pat, as I see this, it’s an important inflection to what’s going on in the market. It’s an interesting moment where I’m looking at what companies like SAP are going to say about something like this.
Patrick Moorhead: Yes.
Daniel Newman: It’s definitely been the Oracle run over the last several quarters to A, show strength in its performance across the database platform. To B, continue to make cloud services a growth engine for the company, especially IAS, you saw huge growth numbers there. But C, you’re seeing them branch out and saying, “Look, we’re going to build a really successful robust cloud business. Yes, our hardware will be probably most performant, but we can still perform really well in other clouds.” By the way, in this case, you’re getting both. You’re getting clouded customer on Azure benefiting from AI tooling and it all comes together in one place.
Solid stuff, Pat. I don’t have a whole lot more to say about this, but what I will say, I guess is, is this the first of a few? Because with all the pairing, this made sense for Microsoft, but if Oracle really wants to open the gates, could you see this in Google? Could it happen? I don’t know. As of now, I think this is it, but I do think with Oracle’s powerful database and the fact that probably every customer of every cloud company on the planet is using Oracle, what could come next? What surprise might Larry Ellison have of sleeve next?
Patrick Moorhead: Yeah, I’ve been in tech over half my life, and it is funny how some of the stalwarts that created this industry are still the power brokers. Isn’t that crazy? I think I even found myself maybe 10 years ago, not writing off Oracle, but if I looked at their innovation path on infrastructure, on core database and in the cloud, they just looked like they were operating multiple clicks behind and lumped them and Microsoft into the same place. Microsoft had their breakout moment that coincided with Satya becoming CEO. Then Oracle really had a couple breakthrough moments here. One of them was gen two OCI, gen one wasn’t great. It was actually quite awful. They literally wiped the slate clean with gen two and started racking up a ton of business, albeit maybe five years after AWS and Azure kicked into high gear.
At the same time, they modernized their database, they modernized their database with a value prop that said, “Hey, you don’t need 12 different types of databases. You can have one. By the way, that one database actually auto fractalizes to multiple types of data and multiple types of it, but it’s simple.” Then they added the autonomous portion on top of it to remove some of the tasks that DBAs and data managers used to have do. By the way, also by automating it reduced the likelihood of mistakes. To make a long story longer, what they also did is they also remained strong in the hardware portion. If you look at their storage systems, particularly for SQL, are the highest performance out there, they are not using generic hardware. In fact, they use very high speed, not just memory where they cram it all up in there, but they also used Intel’s highest performance storage and then they wrap their software around that.
I think we’ve seen a lot of instances where the combination of software and hardware becomes vitally important. Oh, my gosh, look at Apple hardware plus software. Look at AWS, and there are I think five different brands of hardware that they have, including Nitro. Oracle is not just taking database code and running this on generic… By the way, that’s not putting Azure hardware down, but it’s basic generic hardware, and putting in exit data machines, this is very unique, into the Azure data center. Then putting on top of it all the Azure PaaS and SaaS capabilities. The big things I’m going to be thinking about is I always talk about the 75 to 90% of enterprise data is still on-prem. What does this mean for that, right? With all this data put inside of Oracle and SAP, is this going to make a dent on that 75 to 90%?
I don’t know. These things always take time, but an indication of their customers that they had rolled out for this 30 minute video were telling. Fidelity, Voya, those are two obviously, FinTech, and then you had PepsiCo, a major manufacturer on there. But anyways, exciting stuff. I think you broke down the win-win situation here. By the way, if you’re AWS and you have a hate hate relationship between Oracle and AWS, they’re the last place I would ever expect this to happen.
Daniel Newman: Well, did you notice even I mentioned Google, I didn’t even mention…
Patrick Moorhead: Yeah, there’s a potential, right? You have TK and I think we would be ignorant to think that personalities don’t matter in this business, and it’s all analytical. TK used to work for Larry Ellison, and my guess is that they still have conversations. Heck, our friend at Salesforce, Mark Benioff, used to work for him as well. Personalities matter. The first next place I would expect this to go would likely be Google. The last place I would expect this to go would be AWS. AWS, they didn’t accept DGX Cloud, which was NVIDIA architected hardware in there. But here we are with Azure, so great stuff. Looking forward to learning more next week at Oracle Cloud World. Dan, you and I are going to be there with bells.
Daniel Newman: Rock and roll.
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.
