back to article Oracle co-honcho Mark Hurd can't wait to turn your $1 of IT support spend into $4 of pay-as-you-go cloud revenue

Database giant and cloud-dream believer Oracle on Wednesday invited members of the media to its Redwood Shores headquarters in California because, as global comms SVP Bob Winslow put it, "We need you to tell our story." It's a story about money and how much of it Oracle stands to make in the cloud. There's no pretense at Big …

  1. a_yank_lurker Silver badge

    Moving to the Cloud

    Customer will move to the cloud is true to a point. However, moving to the cloud does not mean to the Minions. AWS and Azure seem to be doing well for their masters and appear to have a better reputation. Moving to the cloud may be a long term way to banish the Minions permanently like Amazon has done.

  2. Anonymous Coward
    Anonymous Coward

    SaaS will eat the world....including Oracle

    Sure there is a ton of money to be made from SaaS.

    Does anyone think Oracle can deliver that? Yeah, didn't think so.

    They make very profitable software, but never have a goal of making good software.

    Without magical levels of legacy compatibility, or C-suite extortion(see license audit/support strong-arm tactics), they will lose.

    I confident they could muster up a lose in the absence of a challenger.

    1. a_yank_lurker Silver badge

      Re: SaaS will eat the world....including Oracle

      Legacy compatibility is a chimera for the Minions. What is keeping people from moving is an unwillingness to bite the bullet and migrate to something else. Relational dbms all work on the basic theory and model so they are fundamentally all the same product. Vendors do try to have 'features' that they claim are must have which in most cases are syntactical sugar; nice, convenient but really necessary.

      1. LDS Silver badge

        "so they are fundamentally all the same"

        Just they don't work exactly the same. Everybody who worked with different RDBMS in the past years had to learn it, sometimes the hard way.

        Unless, of course, you use them just as very simple data dumps and all the SQL you need is "SELECT * FROM something" (and even then you may have differences...)

        1. werdsmith Silver badge

          Re: "so they are fundamentally all the same"

          RDBMS theory is all pretty much the same. Dialect changes a bit. There are RDBMS agnostic interface layers that can help somewhat if you are OK with genericness on the DB side.

          Of course, if your application require Oracle then you just need to drop your trousers.

          1. LDS Silver badge

            "There are RDBMS agnostic interface layers that can help somewhat"

            Which boils down to using the database as a simple data dump with all the data logic and security outside the database, and usually re-implemented in each and every application (and usually data gets duplicated and becomes out of sync too) - unless a true common middleware is used (very, very rarely).

            There are far more differences than some SQL "dialect" from data/index/etc. types to transaction management to storage options - all of them can impact data safety and performances. especially for very large databases.

            What is OK for a CMS may not be good for a billing system or something managing lots of transactions concurrently.

            In many situations the data are more important than the application using them - applications come and go, data may stay for very long periods (especially when you have mandated retention periods)

            Note that this is true for any RDBMS, not Oracle only.

            Sometimes it was (and sometimes still is) better to pay the exorbitant Oracle prices than trying to achieve the same yourself, spend eventually the same amount, and find your application can't work or meet performance requirements.

    2. EricM

      Re: license audit/support strong-arm tactics

      Yes, just imagine having a company behaving like Oracle posessing all your data AND servers, giving them the power to take your whole company fully offline in case of a commercial dispute.

      1. like_it_or_not

        Re: license audit/support strong-arm tactics

        Yes, I can easily imagine, one of the cloud providers currently involved in the fierce battle to win this cloudwar, will behave just like Oracle, once that fortunate company will have achieved, in the cloud market, a position equivalent to Oracle's position in the database market today.

        Indeed, the thing is that, this time, that company will have what it takes to shut down your business.

        Believe me, when that will happen, what Oracle has done to its customer would be insignificant compared to the nightmare its unfortunate Customers will experience.

    3. phuzz Silver badge
      Stop

      Re: SaaS will eat the world....including Oracle

      "Sure there is a ton of money to be made from SaaS.

      Does anyone think Oracle can deliver that?"

      Of course they can.

      Their old business model was based around screwing customers over with their licensing terms. Once their customers are in the cloud there's nowhere for them to hide, and Oracle will be able to audit their license compliance at any minute of the day, and hold a customer's servers to ransom.

      SaaS just makes it easier for Oracle to fuck over it's customers.

    4. Youngone Silver badge

      Re: SaaS will eat the world....including Oracle

      Oracle tried the licensing strong arm tactics with the company I work for.

      We currently must be one of their biggest customers, as a result in a couple of years they will do no business at all with us.

  3. Robert Moore
    Mushroom

    Yeah, no!

    I will never forget the money one of my former employers was forced to give Oracle rather than "letting the lawyers figure it out"

    I read their license, and we were within it. But it was cheaper to just pay them.

    I believe the correct term is extortion. (The X makes it classy.)

    I think I will pass, thanks.

  4. llaryllama

    Slightly off-topic question

    I've been curious about something for a long time and readers of El Reg are probably the best bunch to ask.

    What exactly is offered by Oracle that is so powerful/critical/unobtainable that they can get away with obscene prices/licensing terms/business practices?

    There are similar sized companies in our industry who use Oracle ERP systems, but we get on perfectly fine with a combination of open source and in-house software. I visited a larger competitor in Europe and noticed their Oracle CRM system looked very crusty and not very friendly to use. At a very rough guess they must be spending close to 10% of their annual income on Oracle licenses.

    Is Oracle software just particularly good at scaling for very large companies? Are execs getting kickbacks? Is everyone just stuck in a "it's worked for 20 years, don't touch it" mindset?

    1. a_yank_lurker Silver badge

      Re: Slightly off-topic question

      I suspect it is partly how much input the IT group had in some of the decisions and partly timing. As far as any system that fundamentally uses a relational dbms as its backend, it really does not matter which is used. All have their strengths and weaknesses. The stuff such as CRM is just a way to manage the information. Often these tools should be written in house rather than bought for a large company; the needs are too specialized to dumb source it in any way.

    2. Anonymous Coward
      Anonymous Coward

      Re: Slightly off-topic question

      In my experience. I started at a company that used legacy systems (VAX and terminals) in the 90's. They had a good idea of how much it cost them to run them and how much it would cost to update/redevelop them and it wasn't cheap.

      Along came PC's and the promise of cheaper, friendlier software. The company accepted that it would be risky to develop their own software with their existing resources and went for an off-the-shelf product with a popular (at the time) Unix vendor. Naturally it required customisation but there were productivity gains with the integration of PC's and MS Office/email into the workflow. Turns out it was significant customisation. By the time they realised just how much, they were pretty much fully committed (think 3+ years and Y2K was looming and the old system definitely wasn't Y2K compliant). They went all in on a bad system that cost more but worked.

      By the mid-2000's it was usable but the vendor was saying there was a new product and the old one was reaching end-of-support. Do they stay with it or develop something better in-house? They stayed, upgraded, found it needed more customisation and spent a load of money. Again, a bad system that was expensive to run but supported.

      Fast forward to today. There was another iteration of this and the current product has almost reached end-of-support. They've moved from VAX to Sun to Windows/Oracle to Windows/SQL as the platform, but performance was never really the issue aside from a few specific annual tasks. Do they upgrade or develop in-house? Of their current staff, I would suggest that none has seen a capable system for running their business because of their experience with the vendors products over ~20 years, so developing one in-house would be a leap of faith.

      The system was specific to the companies line of work, but it could have been any ERP system combining financials/HR/line-of-business apps. ERP promises to provide a flexible system to run your business that is difficult to develop in-house. Just realise that the flexible part in ERP is your businesses processes, not the ERP system.

      So, your specific questions:

      What exactly is offered by Oracle that is so powerful/critical/unobtainable that they can get away with obscene prices/licensing terms/business practices?

      A mostly working system combined with an unwillingness to change for lots of financial/political

      reasons.

      Is Oracle software just particularly good at scaling for very large companies?

      Oracle Financials was loved by accountants around 2000. Whether that is still the case is unclear.

      Are execs getting kickbacks?

      They get wined and dined and maybe a round of golf, but nothing too serious - it's mostly trying to keep the customer happy after major screw ups while the customer tries to figure out what they can drop to reduce their costs.

      Is everyone just stuck in a "it's worked for 20 years, don't touch it" mindset?

      They tend to be very complex systems that touch lots of parts of a business. Replacing them tends to require business re-engineering (and the associated politics), significant development effort and likely employing a significant team to do the development. Stories about failed software projects are a dime a dozen. Bad and working is better than the uncertainty of failure for large companies.

      Do I have a remedy? Keep business critical systems separate to avoid a monster ERP that can't be touched. The people that manage the integration between the systems will find challenges, but at least know the systems/processes well enough to customise them when changes happen and have enough product knowledge to be able to assist with re-development or moving to another vendor.

      TL;DR: people want an all singing, all dancing software package without realising that they will end up stuck on an expensive treadmill of enhancements, customisations and support. Then when they need to change, they can't fix a system that is dysfunctional for 80% of the company because no other ERP packages offer Helen in HR a way to manage leave across ten different countries with different holiday dates without extensive customisation....

    3. LDS Silver badge

      Re: Slightly off-topic question

      The reason is that for a long time there were very few databases that could scale vertically and horizontally like Oracle did, and the few competitors had no better pricing.

      Oracle was able to handle large databases (on high-end servers/mainframes running the like of Solaris, HP-Unix, or some IBM OS) and their data logic when you could not realistically run those workloads on "PCs" - and when "open source" software became available it took years to reach that kind of functionalities (sometimes not yet very well - just look at Postgres partitioning).

      If you have large databases which use a lot of PL/SQL code and some of the advanced features, moving away is not easy at all. Unless you can write your own RDBMS like Amazon did.

      Remember most RDBMs don't work exactly the same way, and what works flawlessly on X may not work on Y, or not work exactly the same way (transaction management is usually the first issue). You would have to review all the SQL code to ensure it still works on the new RDBMS.

      In turn it allowed greed executives to deploy very nasty policies to "maximize shareholder value" - and as less expensive databases can now handle workloads once reserved the the high-end ones, they will get what they deserved for trying to exploit customers so much.

      CRM systems are really the realm of legacy nightmares. I've seen some designed to mimic old terminal screens because that was users were accustomed to. Others had to implement procedures and policies that were old as the company itself, and nobody was willingly to change. Add on top of that Andersen/Accenture/etc. consultants telling developers what to do, and you get the picture.

    4. Anonymous Coward
      Anonymous Coward

      Re: Slightly off-topic question

      IMHO - There are a few reasons I can think of, in no particular order.

      Legacy: Once you have a DB platform of a significant size and you didn't set it to ANSI SQL from day one then the transition to a difference platform is substantial and fraught with risks and potential downtime. A high transaction database in a 24/7 operation with need for existing and current data to be maintained is a scary prospect. In reality there were few scalable, fast databases around - nowadays many organisation could choose a range of database options for a new product and there would be many better options for most than Oracle. There is also DBA experience. An Oracle DBA is unlikely to support or be very effective if there is a move to another platform. Generally they will move on to another Oracle DBA role rather than retrain.

      Product integration: Oracle are pretty good at getting their database used as the backend for a number of products in certain sectors. Therefore a company goes out to buy a product and chooses it based upon features however the underlying database is Oracle which wasn't necessarily one of the considerations at the time. As long as you are bound to that product then you are also bound to the underlying supported database.

      Great deals/C suite schmoozing: Oracle, in my experience, are better at 'reaching out' to executives and offering 'great' solutions at a 'great ' price that will solve all their problems and needs. The reluctant IT bods are overidden as Oracle have already predicted this and put the FUD about the ability of the IT team to the C Suite at the initial meeting. The conversation the Cer then has with Oracle goes along the lines of 'My IT Manager tells me that you will make me slaughter my first born when it comes time for renewal?', Oracle replies 'Of course we won't, James. Remember everything we discussed. Would we be used by so many companies if that was true. You know you were having doubts about your IT manager, well I think you can see now what I was saying about their unwillingness to innovate and realise the true potential of new products. How about we set up a small cloud agreement FOC and transfer some of your workload to it to show you how good it is - Free, yeah, no risk?'

      Evaluation: Some people may choose Oracle DB because they have done extensive independent testing of the available systems using a wide combination of hardware and client optimisation and for their workload it provides significant performance gains that are crucial to the running of their business. They've found that by going with an alternative system would cause serious competitive disadvantage. These organisations are prepared to pay whatever it requires and while an alternative product may have better performance in some scenarios, this scenario happens to work best with a certain configuration for an Oracle DB. After a few years see the Legacy reason above. These companies are quite rare.

      1. werdsmith Silver badge

        Re: Slightly off-topic question

        Performance wise, Oracle is hghly configurable and tunable for your specific load and if you pay a lot of money for it and also pay a lot of money to your DBAs, developers and infrastructure then it can stand up to some pretty heavy work. They are also leaders with transactional DB performance innovations which other vendors take time to catch up with.

        But these requirements are actually quite rare and I believe more than 90% of applications of Oracle could have been done with SQL Server or Postgre or others.

      2. Anonymous Coward
        Anonymous Coward

        Re: Slightly off-topic question

        From one "Anonymous Coward" to another, I completely agree with everything thing you say, but I will add a "however" or perhaps two "howevers." Clearly, critical business applications are moving from on-prem to the cloud. However, the transition is difficult, costly, and risky and in such circumstances, there is no guarantee Oracle customers will move to an Oracle cloud. In fact, many reasons stated by others suggests many won't. Second however, as new customers, not currently using Oracle plant applications in the cloud, there is even a smaller opportunity for Oracle to capture those opportunities. Consequently, while it is imperative Oracle transition to a cloud strategy, the outcome is far from obvious.

    5. llaryllama

      Re: Slightly off-topic question

      Thanks for the informative input everybody, it all makes more sense now.

      I didn't get into database and ERP type work until the last 10 years or so, and in this time there have always been powerful free open source solutions for SQL, plus a competitive market for frontend CRM and resource management software.

  5. Nick Kew Silver badge
    Devil

    It kind-of works

    The idea that Oracle can make more money while at the same time saving its customers money kind-of works. What he's talking about is big efficiency savings, taking out expensive, under-used per-customer installations and maintenance costs.

    I don't need to point out the likely flaw with that plan, 'cos A/C already did that above ;)

  6. EricM

    "We don't have an IT person" ... and selected Oracle Cloud to run our business

    I have a feeling as if these 2 facts might be connected ...

    1. knarf

      Re: "We don't have an IT person" ... and selected Oracle Cloud to run our business

      They all ran away when the CTO chose Oracle

  7. Anonymous Coward
    Anonymous Coward

    "We don't have an IT person," declared Mark Moore, CEO of MANA Nutrition

    Another idiot who thinks his cloud provider will look after his data and security.

    1. Simon Ward

      Well they will ... up to the point that something goes wrong.

      And it will, despite what the salesdroids and marketurds will tell you.

      Then he'll get shaken down so hard his eyeballs will fall out.

  8. Dan 55 Silver badge

    Oracle have always tried to go round IT people

    They're the enemy, given half a chance they try to migrate away from Oracle... and this is the best way to do it, make them completely redundant.

    1. werdsmith Silver badge

      Re: Oracle have always tried to go round IT people

      My painful Oracle RAC instance was finally ejected at the beginning of the year. Everybody was glad to see the back of it.

      Now if we can just get rid of the Java and the MySQL we will be fully delarrified.

      1. Dan 55 Silver badge

        Re: Oracle have always tried to go round IT people

        If your company really does want to delarrify, I'm sure switching to MariaDB would be fairly painless.

  9. Anonymous Coward
    Anonymous Coward

    mmm, mana nutrition don't pay what others do

    https://mananutrition.org/nonprofit-turns-to-netsuite-to-fight-childhood-hunger/

    note the bit "NetSuite supports more than 1,300 nonprofits and social enterprises globally. MANA is currently benefitting from Suite Pro Bono as part of the NetSuite Social Impact program, which provides nonprofit and social enterprises with coaching and support from NetSuite employees. MANA was also able to utilize the discounted licensing the NetSuite Social Impact program provides to nonprofits, which has helped MANA lower the prices of RUTF for its international aid customers."

    which is nice, BUT not honest bringing them in to sing praise about the product. (smells of cash/free work for premotion).

    And even if true would have been cheaper not to use oracle shit they are now locked into. (at this point migrating would be more than mana nutrition is worth).

  10. elwe

    "Everybody is going to move to modern applications when they can," Hurd insisted,

    So he agrees everyone will move off of Oracle when they can?

  11. Anonymous Coward
    Anonymous Coward

    Dear Oracle

    Why would I bother.

    If I move stuff to the cloud i'll reengineer it so it doesn't need Oracle...

  12. Anonymous Coward
    Anonymous Coward

    Hurd and Ellison...

    Hurd and Ellison... both cnuts.

    Hurd will do anything to meet the numbers he has promised to Wall Street, even if it damages medium to long term plans.

  13. Anonymous Coward
    Anonymous Coward

    No soup for you

    Hurd sees Oracle as a soup-to-nuts vendor,

    That's right, selling watered-down soup to anyone still nuts enough to do business with them.

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