9 posts • joined 9 Mar 2012
macro points on market participants in OpenStack and red hat
Some things I think people should consider.
In my view, when looking at a new segment (e.g. IaaS, PaaS, Hadoop/BigData, No/NewSQL Data), both existing large companies and smaller for-profit companies need to carefully study and look for the best places and best chance to participate, add value and make money. Also looking to see if there are existing companies that might have a very good shot at winning parts of that new market, and look to avoid or complement those.
In the case of OpenStack, which is an open-source centric market area, and where the key technologies relies alot on Linux, and to some extent KVM, I would think that people would give Red Hat a pretty good chance at winning the major role in this market. Looking at Red Hat and seeing that they have become the #1 contributor to the project, and given Red Hat's track record in linux and jboss, and in being able to balance community with commercial open source to profitable success, I would stay away from the key market area that Red Hat is targeting.
If I add in the fact that openstack, when combined with Linux and kvm is kind of like "Super-sized-Linux" in many ways, and it will require a strong third party ecosystem of hardware and software participants and developers. I would then look and see if players in this market have experience in this area, have existing relationships with ISV's and IHV's, and are trusted by the third parties to build a sustainable platform, price it fair and provide updates and support. On that front Red Hat would be in the best position, and maybe IBM has some chops there, and VMWare some, but they are not fully in with OpenStack from what I see. Given that you have a company in Red Hat, that most all ISV and IHV companies would trust to be a solid, stable company, and have support and technical skills to back up their solution, and open source skills to balance community and commercial interests, I am not sure why people are trying to take the core Openstack part of the business. That is a very tough battle.
I think it is better to get some concentration of force around one company that can be trusted to drive it forward, and build applications and hardware and software solutions around it. Having 5-10+ OpenStack versions confuses third party ISVs, IHVs and end customers.
I can see why someone like HP fancies going after this area. They currently have no strategic infrastructure software (i.e. virtualization, operating system, database, middleware), and with IaaS emerging as a strategic new infrastructure technology, I can see why they would want to try it. The challenge is that their ability to attract an ecosystem that includes their head-head system vendors like Cisco, Dell, IBM and others, is very unlikely to happen. I just don't see it happening.
HP is sounding Oracle-esque, except...
they don't own any strategic, or high value software. They are sounding like Oracle/Sun about the complete system and all the parts from one vendor. Though not sure that is working that well for Oracle, and they have an incredible global lockin customer base with their database, and many application level software plays that give them more credibility to try and pull off the "complete system" play. HP has mainly hardware, and that is a commodity game, and Intel and their white-box marketing machine will eat them up in the next 2-5 years is my prediction. I give HP credit for trying this, but doubt it will work.
Sounds like a brilliant move
CentOS has been a great "market development" tool for Red Hat and has helped hold back any serious competitors - ala Suse, Ubuntu or others in the server market. Now it looks like Red Hat is raising the game in open source by adapting an additional model. These guys created the dual community (Fedora) and commercial (RHEL) model well ahead of anyone, and have now applied it to Jboss, Storage, Virtualization, OpenStack and their PaaS OpenShift. Splitting a community version and a commercial version. But this takes it to a different level.
I give Red Hat credit for having the guts to do this, and I bet it baffles many of the large industry vendors and cloud providers that were hoping that Centos somehow kept Red Hat from getting too strong or influential. Will see how it all plays out, but my guess is that many "strategy" folks at these large companies will be scrambling to figure out what this means. When they do, Red Hat may then shift to another level of open source models.
Good stuff, good action !
Pot and kettle on copying - kinda disgusting !
How does Larry's rationalize this comment:
"I don't see how he thinks you can just copy someone else's stuff. It really bothers me," the database mogul continued.
With what he has been doing in Linux for the last 5+ years. He came out and said "Red Hat is not supporting Linux properly, so we need to have an Oracle version, but it will be 100% compatible with Red Hat". This sure sounds like copying someone else's software to me.
He needs to give up whining about the position that Sun was in when Google started using Java, Where Sun begged them to please support Java, for free.
Larry, larry, larry, you are riding a slow moving boat, with many boat anchors on board (SPARC, Solaris, Oracle Apps, Fusion Middleware). Good thing you have your database. But wait, that one is taking on water also with Hadoop and NoSQL models taking shape.
Ride that baby down hard, and keep getting plastic surgery, but remember your ship is taking on water my friend.
Skeptically, it seems to me...
1) From the SF.com point of view - they are dependant on the Oracle DB on the back end, and it has served them well in buidling their offerings. They wanted to get a great, cheap, and predictable-over-time price for the DB as they keep expanding their user base. They also likely wanted to avoid the potential to have their price increased dramatically on a renewal of their license and support agreement at any point.
So I see this as mainly SF.com cementing a predictable cost structure for their infrastructure technologies. They made noises and motions about shifting to PostgreSQL, as part of the dance of negotiation with Oracle (hiring key Postres engineers for example). It seems that SF.com had a pretty good upper hand in the discussions, but also was pretty trapped into the Oracle DB as the back end for all their solutions. So the reality of switching to Postgres would be ugly and costly for them.
I am sure SF.com does not really want to run Exa-systems or Oracle Linux, and get themselves further locked into more Oracle technologies. Since Exa-systems are the opposite of being able to take advantage of low-cost scale out computing with x86 systems and infrastructure software (mainly open source). But to get the best price, they agreed to tell the world they will use these other Oracle technologies that are lackluster at best.
2) From the Oracle view - this, and the Microsoft cloud move, are about realizing that they are slipping on many fronts in the modern, cloud computing era. With hardware, middleware, and Oracle apps sales all being very challenged, and some new challengers to their database technologies (Hadoop, NoSQL, NewSQL), they had to do something since people are not buying the Exa-system message or story. So I think they gave the deal-of-a-lifetime on the cost side of the DB to SF.com, and they will be able to keep saying SF.com uses their database. I doubt SF.com will use many of their Exa-systems, or Oracle Linux, or Oracle Java, as the employee antibodies at SF.com against doing so, will be hard to change. While Marc B is off trotting around the globe pitching SF.com I doubt he will be checking on how the Exa evaluations are going.
So, I see this as a good win for SF.com to get a cheap, key piece of their infrastructure for many years, and Oracle gets to keep saying a hot company uses their DB, and the rest as "much ado about nothing" or "frivolous noise".
Okay, okay - let's get real here !
What I see, skeptically, is two, aging giants, who were forced to play nice together, as they are getting their lunches eaten from nearly every direction they play in.
Both running from the onslaught of SaaS offerings that are outfoxing them, and from open source based solutions in operating systems, database, middleware, and the new data and big-data wave. The open source stuff is eating them in multiple directions, both on-premise and in cloud computing.
And in Microsoft's case, hurting from the explosion in mobile devices and pad computing, with a bit role so far, and one that encroaches on their core Windows client and Office cash-cows.
I am trying to figure out who was more desperate to get a deal like this done, and best I can tell it was "equal mutual desperation", almost a 50/50 split. Though I doubt it will help either one of them over the long haul a whole bunch.
It actually reminds me a lot of the Sun and Microsoft 10 year partnership announced awhile back with Ballmer and McNealy trading hockey jerseys. That one did not even dent an upside for Sun, and I doubt this one will do anything for Oracle here.
But it is kinda fun to see two old guard guys - Hurd and Ballmer up there yabbing about how great this is.
Funny exa-numbers ?
IDC only takes data from what vendors tell them. And Oracle has been changing their story on Exadata, and Exadata and Exalogic numbers. This link below describes it and points to the earnings call transcripts.
I have heard that Oracle has been asking their sales reps to do weekly forecast updates for Exa products (instead of monthly for others), and 3-year forecasts for Exa (instead of 1 year for other products), which to me feels like someone desperate to try and get people to believe that there is a huge pipeline of demand and opportunity, that may not really be there. Somewhat un-natural motions, since it seems to me that they will be hard to sell in any decent volumes. That was somewhat of my original point. That Oracle has been, and continues to talk up the "demand" and interest, to try and convince people they need one and they are flying off the shelves.
I wish someone would actually do a survey of end users or VAR's and see if any real value, Not an interview with the Oracle distributors, since they will just say what Oracle tells them.
I predict the next 12-18 months volume predictions will keep getting pulled downward by Oracle, unless they stop providing details to the market, since it may be too embarrassing.
I smell something funny
Sounds like a bad business decision to me. So NetApp can sell to the 100+ Exadata customers in the world ? The Exadata systems will be low volume sellers, and Oracle will try to force Sun/Oracle storage sales to them. So why would NetApp waste their time on this ?
My guess is that Oracle had something on them, like "we won't certify any of your storage systems for our Oracle Database, unless you come out with a compatible storage system for our overpriced engineered systems".
It really feels like Oracle is going to great pains to convince people that Exadata and Exa-everything are big sellers and in high demand. But it is not true. They had to admit on their last earnings call that it is below forecast, and it sure smells like a bunch of baloney to me.
NetApp was likely strong-armed into this, and Oracle Exa systems are the next Data Generals and Primes of the world.
We are here to help, trust us....
OK - so let me get this straight. The new kernel is better than other Linux kernels, but....it may break a variety of software applications or device drivers that run on those other popular Linux versions. And if I buy this, I get to also buy more Oracle/Sun servers and storage and "engineered systems" that will all work faster and better. But I don't seem to get strong compatibility with the whole world of x86 based server systems (Dell, HP, IBM, etc), storage (NetApp, EMC, etc), and software applications that run on, let's say Red Hat Enterprise Linux. Or maybe I do, they seem to say something about some version being compatible with Red Hat, but then I get lost trying to figure out what they are saying.
For that matter, it seems that I may also have issues if I want to use the virtualization market leader VMWare, with these new Oracle software offerings, since they prefer I use their virtualization solution, which has "1-2% market share" (and I think that is market share within Oracle users even). I certainly don't know anyone running Oracle virtualization who also does buy millions of dollars of their other offerings.
This sure feels like a big pain for any software company or corporate application developer who wants to support a wide range of hardware and software options to try and support. I guess that is Oracle's plan, to make everyone buy 100% of everything from Oracle. Which feels like the battle from 40 years ago, but maybe they are smarter than everyone. It will be interesting to see how the sales of their products go over the next 12-18 months as the landscape changes.
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