Oracle prepares for next-generation Cloud

Those tracking the IT industry will recall how IT moguls like Larry Ellison and Bill Gates once dismissed Cloud Computing, to protect the interests of their best-selling on-premise software. Well that was around the years 2005 – 2006. Today, both Larry and Bill have done a volte-face and changed their opinions about the Cloud. In fact Oracle (and Larry) suddenly began singing hosannas about the cloud at Oracle events in recent years. Then Oracle spokespersons began talking about their cloud strategy and the cloud enablement of products. Delivering a keynote at the Oracle CloudWorld 2013  event in Mumbai, Sandeep Mathur, Managing Director, Oracle India spoke about Oracle’s “next generation cloud”, shared the company’s cloud strategy, and spoke about trends in the market, and new Oracle solutions.

Sandeep Mathur_croppedMathur began his keynote by revisiting some of the current market trends that are driving cloud adoption. He alluded to the splurge in connected devices (9 billion), of which 2 billion are smart phones. And all these smart devices are generating data — posing a Big Data explosion. And by 2020, research shows there will be 50 billion devices connected to the Internet.

Mobility is also a trend that has accelerated in the last few years. As if to drive the point home, one of the Oracle speakers showed a photo of Pope Benedict’s election in 2005 — with crowd’s in St. Peter’s square. And then he showed a similar photo of Pope Francis’ recent election — this one with a lot of backlit mobile phone screens!

Another trend is social media. Customers are now on social and can express their views about your products and services on social media. Also, the young workforce is more comfortable communicating over social media, rather than email.

“There are 930 million mobile subscribers in India. By next year most enterprise applications within a company will support mobile. When you have close to a billion users (in India) in mobile, clearly your applications need to support mobile. And Social media is now driving one-to-one relationships between businesses and its customers,” said Mathur.

Mathur alluded to the declining average age of the workforce. He said the young workforce is used to a different experience (for instance young people  are using less of email and more of social media to communicate). And the platform for this communication is mobile.

“Enterprises continue to use applications developed 10 – 15 years ago, that are not ready to address these market trends; this calls for a new set of applications. Most businesses leaders believe that cloud is the way for us to embrace this change and make your organization more available,” said Mathur.

Product Strategy

Problem: There are too many best-of-breed products used in organizations. Integrating all these products and managing them using a plethora of management consoles is a nightmare for IT managers. Organizations also need to spend on R&D to integrate these products. Oracle (and other IT solutions vendors like SAP) are trying to simplify and reduce these costs — by offering one product with a suite of well integrated applications — all from the same company. Oracle believes this approach also makes it easier to manage the licenses and upgrades.

“We are going to keep reducing best-of-breed technology. We have 80 plus products, and are leaders with 60 of these. We will continue producing better independent products and then we want to make sure that we vertically integrate those products so that customers do not have to spend that cost on R&D. These products will be quick to deploy and make for agile platforms. And of course, these will be cloud-ready,” said Mathur.

According to Mathur, Oracle is spending USD 5 billion this year, just to ensure that its products interoperate well with each other. Oracle is also developing a new set of applications that are ready to run on the second-generation cloud. It is also acquiring companies that have the technology and products that match its application objectives. It believes that the current set of applications cannot cater to the needs of the next generation workforce, which will be using mobile devices and will communicate through social media.

“By next year most enterprise applications will support mobile. The new set of applications will be business intelligence aware and socially aware.  We are also acquiring applications, and acquiring the best of breed in those particular categories. Our applications will run on-premise, in a private cloud or on a public cloud,” said Mathur.

In March Oracle quietly acquired start-up Nimbula, a maker of cloud management software. Interestingly, Nimbula’s co-founder, Willem van Biljon, also helped build the Amazon cloud.

In the past Oracle produced large applications like ERP and CRM that were broad-based and general — for all verticals. Businesses bought these and then invested in R&D to tailor the application to its specific needs — a laborious, time-consuming and expensive affair. Oracle is also going after niche segments and bringing out “verticalized” suites that are tailored for niches like Human Capital Management (HCM), talent management, health sciences, taxation, banking & financial services etc.

Long innings

Oracle is the world’s largest provider of enterprise software and now also a leading maker of enterprise hardware used in data centers. It also offers systems and services to enterprise customers. The software behemoth entered the Indian market 20 years ago. To date it has more than 30,000 developers or R&D specialists based in India. It has grown its customer base to 8,000, and it enjoys a rich ecosystem of partners.

“India is an important market for us not just from a business standpoint but also for R&D, engineering, shared services — and you can expect us to be here for a long time,” said Mathur.


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