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Red Cloud Rising – How Oracle Is Creating the Next Enterprise Stack

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Oracle began the year stating they were investing $1.5B in R&D due to their acquisition of Sun Microsystems.  Chuck Phillips told the Wall Street Journal on January 28th of this year that the $1.5B would be used for taking full advantage of the processing efficiencies of the SPARC processor and Sun computing platforms including Java.  OpenWorld showed the investment made in January of this year is paying off well.

Oracle today has an enterprise stack challenged only by IBM, a point made by Ray Wang in an excellent summary of OpenWorld titled Event Report: Oracle Open World 2010 – The Wrap Up.  Additional summaries of the event from Michael Fauscette and Sadagopan provide valuable insights and are well worth reading.

Oracle Provides Fusion Update

One of the most aggressive consolidators of the industry, Oracle has in the past acquired companies to strengthen potentially high growth market areas they are either weak in or do not have a ready-made technology solution for.  The BEA acquisition is a case in point.   Oracle’s acquisition of Sun shows that the stack-based strategy has been in development for years.

At OpenWorld Oracle also provided an update on their Fusion applications, scheduled to be delivered in 2011. Oracle has invested the majority of the $1.5B in these applications, as they are critical for the enterprise stack strategy to succeed.  Fusion applications will be unified through Web Services, supported with industry-standard integration technologies, and designed for process- and role-based work flow configurations. Today, Oracle customers rely on best-of-breed applications to bridge the gap in these work flows and applications.

Why Do Elastic Clouds have to be Expensive?

The biggest news of OpenWorld was the launch of the Exalogic Elastic Cloud (cloud in a box), a Sun Microsystems-based server preconfigured with Oracle system software.   The baseline configuration of the Exalogic Elastic Cloud sells for just over $1M.  Cloud computing is typically accomplished on more commoditized hardware, with server software managing the tenancy and fail-over requirements of applications.  The Exalogic Elastic Cloud does provide elastic support – but within limits of the server purchased.  An excellent analysis of the Exalogic Elastic Cloud and what it means to enterprise users can be found at the op-ed article by John Considine titled   Opinion: “Cloud in a Box” Gets Boxed In.  He makes an excellent point about the duality of cloud computing potentially occurring as other vendors follow Oracle’s lead.


As Oracle continues to build out their enterprise stack with acquisitions over the next year, sales of the Exalogic Elastic Cloud will be a leading indicator of how successful their new systems strategy is and where.  Most likely stealth environments including aerospace and defense, banking and financial services will immediately see a need.  Oracle has taken the concept of cloud computing and used it as a unifying concept to make their acquisitions make sense.  When many enterprise customers are piloting SaaS-based applications and looking to consolidate their server costs, Oracle launches a high-end system.  The adoption rate of the Exalogic Elastic Cloud is going to determine if enterprise customers are willing to pay a premium to have cloud-based platforms in their organizations.  Most challenging for Oracle is getting the Exalogic Elastic Cloud platform to integrate with the many other cloud platforms in the market today and coming soon.

Oracle invited Marc Benioff, CEO of to speak at their event as well.  Below is a 48-minute video of his keynote.  It’s worth listening to as he makes several excellent points about where Oracle is and where customers need them to be, including warning customers to beware of the false cloud.

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