Trash talk and FUD harms the Cloud industry

Over here we are anticipating this year’s Cloud Computing World Forum in London, but over in the US Larry Ellison, Oracle’s founder and CEO since 1977, has pivoted his position on the Cloud along with “crossing a line” to trash key competitors.  Elsewhere old guard software giants like IBM are mis-communicating the Cloud messages.  How does this help the the industry, the typical buyer in an SME, or the average CIO in a larger enterprise?  Actually this noise generated by the old guard of IT is significant in positioning the current status of the Cloud landscape, but what we really need is some clarity of vision on the Cloud topic from the big players rather than messaging crafted at protection of their existing customer base and revenue streams.

Last Wednesday Larry announced what the Oracle press release claimed as “the “industry’s broadest and most advanced Cloud strategy”, although on the day he actually said, “we are now announcing the most comprehensive Cloud on the planet Earth”.  This is an interesting turn around considering Larry has regularly lambasted the Cloud term.  Take a look at this interview some of you may remember from September 2009 at the Churchill Club where he’s vitriolic about Cloud because after all it’s just networks and computers and the Internet.  He talks about starting as a SaaS product and then becoming Cloud as just a change in fashion – “Chanel last year was fuchsia this year you have puce” or “they just change a term and they think they’ve invented technology” or “let’s call that Cloud, it sure beats innovation”.  All these comments are more ironic considering Larry is personally still a major shareholder in Cloud ERP provider NetSuite, and one of the initial investors in  At the end of that interview Ed Zander rather prophetically says “I’m going to check back with you in a couple of years”.  Here we are in 2012 and you can read Oracle Cloud: Larry Ellison’s Top 10 Reasons Why You’ll Want It.  You can’t help but smile at how far he has come.

Let’s look at this announcement of the “most advanced Cloud Strategy” – is there actually anything new?  Well if you read Frank Scavo’s excellent analysis he says “nearly everything presented had been previously been presented at Oracle Open World in 2011”, and there are only a couple of new things – some new Oracle Fusion applications and social marketing functionality from Vitrue who they acquired in March.  Putting aside the substance, that’s a lot of sound and fury.

In the session Larry claimed they have over 100 Oracle Fusion Cloud services.  This was even the subject of his first ever Tweet.  Frank says “seeing that Oracle announced five during Open World, it’s difficult to understand how it is now claiming 100”.  in Dennis Howlett’s equally great contribution to the controversy he says “I don’t see how this all adds up to 100 applications and none of them are available now”.  Many of my analyst friends are calling out Oracle to give a list – let’s see what happens but I’m intrigued as to how Oracle’s communications team will spin this.

Larry explained that Oracle Fusion applications were built “from the ground up for the Cloud”.  Ray Wang of Constellation Research says “My POV: you can’t rewrite history”.  Frank says:

“At the beginning of his presentation, Ellison claimed that Oracle began to rebuild all of Oracle’s applications for the cloud, calling it Project Fusion. But some of us have a long memory, and we’ve written blog posts on Oracle’s Fusion program over the years.”

Frank goes on to link to several of his own posts around the Fusion roadmap over the years, highlighting Cloud was never mentioned before.

How about trashing the competitors then?  Ellison claims that SAP have done nothing in the Cloud except for acquiring SuccessFactors, and they “won’t have anything “for real” in the cloud until 2020″.  This is just ridiculous.  Whatever your views are on the merits or evolution of SAP’s Cloud solutions, it can’t be denied that Business ByDesign™ has been around since 2007 and they have a selection of line of business Cloud solutions too.

SAP wasn’t the only competitor Ellison aimed at.  He said “most cloud vendors only have niche assets”, obviously referring to the likes of  “Some people built their system with a Flash UI,” he  remarked. “I won’t mention Workday by name.”  Workday do use Flash, but you couldn’t possibly characterise it as a Flash UI.  He also suggested that “Workday doesn’t use a database”. That’s preposterous – they just don’t use Larry’s Oracle database.

Another key aspect of these announcements is best described in Phil Wainewright’s post Does Larry believe in Oracle’s middle-rung cloud?  Oracle’s Cloud uses a hybrid approach where applications can be deployed for each customer on premise or in Oracle’s Cloud.  Pure-play Cloud providers like Salesforce or Twinfield use a multi-tenant architecture where one version of the software and associated database are shared by all users to maximise efficiency and cost savings and to reduce maintenance overhead.  Oracle’s approach uses individual databases for each Customer.  Phil explains that’s “half baked” and good for protecting or selling more Oracle licence revenue.  In the announcement Larry used the term “co-mingling” of data with the implication that isn’t safe.  Phil explains eloquently:

“Do you worry about your data co-mingling with others when the packets pass through the network’s routers? You know that the headers on the packets make sure that your data won’t accidentally go to someone else’s endpoint. Cloud vendors use exactly the same logical separation to keep your data from ‘co-mingling’ with anyone else’s. The fact that it may be stored on the same disk or go through the same processor chip is as irrelevant as worrying about sending your physical mail through the same postal system as your competitors.”

Oracle aren’t the only ones.  In another post a week ago Phil summarised as follows – “Big systems vendors are spreading misconceptions about the cloud because it helps them sell more kit.”  In this case he was responding to a guest post from Gery Menegaz of IBM on ZDNet and went on:

“Sadly, this is typical of the ill-informed conventional wisdom you’ll hear from the likes of IBM, HP, Oracle and most parts of Microsoft, Accenture, Deloitte and the rest when discussing cloud computing.”

Phil’s post then takes Gery’s arguments apart one by one, highlighting his emphasis on the infrastructure and services required to set up a secure, Cloud data centre or the risks of trusting your data to a public Cloud service.  Just like Larry’s stance it trots out the same argument – “The last thing you want is your data to co-mingle with someone else’s.”  This view of Cloud conveniently avoids a true analysis of multi-tenant architecture or any mention of the many Cloud applications that are available.  It doesn’t explain how you can try and buy and test them out with minimum of risk compared to the old on premise approach, even when the same old software is retrofitted in to Cloud infrastructure.  Please read both posts as they highlight the way the old style IT companies and systems integrators position Cloud by not telling the whole story.

Larry is a very entertaining and charismatic speaker, but I agree with Dennis that he’s gone way over a line.  This kind of trashing of competitors and misrepresentation of the facts is bad for business and bad for our industry.  In the run up to Cloud Computing World Forum these events tell me three things:

  • If Oracle are “announcing the most comprehensive Cloud on the planet Earth” then we can stop discussing if Cloud is mainstream or not.
  • If Larry is aiming these kinds of barbs against the likes of Salesforce, SAP and Workday then he must be worried, and the effect will backfire.
  • Even this late in the development of the Cloud topic we need some clarity and sensible definitions – the miss-information and FUD is bad for all of us.

photo courtesy Oracle OpenWorld San Francisco 2009 on Flickr


David Terrar

David Terrar 

David Terrar comes from a background of over 30 years operating in the trenches of the software business, having worked for companies like IBM, Interactive, DataWorks, Indus and CODA. He speaks at events and conferences on both cloud computing and social business. He is chairman of the Intellect SaaS Group and on the board of directors of EuroCloud UK. In addition he’s involved with London Wiki Wednesdays, CreativeCoffee Club and helped start Amplified (the Network of Networks).

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