Understanding The Significance Of Oracle’s Acquisition Of Datalogix

In late December, Oracle announced its intention to acquire digital marketing leader Datalogix. Datalogix specializes in understanding the relationship between digital marketing and offline purchases by leveraging its partnerships with over 1500 data partners who provide data about the purchasing patterns of roughly 110 million households. Headquartered in Westminister, CO, Datalogix boasts 650 customers including “82 of the top 100 US advertisers” such as Ford, Kraft, Facebook and Twitter. Datalogix aggregates data from its customers to enable digital marketers to personalize content to consumers across a variety of online channels. By acquiring Datalogix and integrating it into the Oracle Cloud, Oracle hopes to obtain an even more comprehensive picture about the online and offline activities of consumers that it can subsequently sell to advertisers and interested parties as illustrated below:

The graphic above illustrates how the acquisition of Datalogix complements Oracle’s larger data as a service platform. Datalogix provides the feather in Oracle’s cap with respect to cloud-based digital marketing by enhancing the data management capabilities of its 2014 acquisition BlueKai as well as the marketing automation functionality of its acquisitions of Eloqua and Responsys in 2012 and 2013 respectively. The acquisition of Datalogix augments Oracle’s analytics capabilities regarding offline and online consumer behavior and enables it to deliver an offering that allows customers to target, personalize and measure the results of marketing campaigns as noted above. Importantly, Datalogix positions Oracle to provide advertisers with the holy grail of data-driven marketing in the form of a master consumer identifier that maps to daily transactional data about brick and mortar consumer purchases as well as online social behavior such as social media-related actions and purchasing activities. In terms of its larger cloud strategy, the Datalogix acquisition catapults Oracle’s positioning within the cloud-based marketing space and gives it access to a trove of data that it can leverage for other products as well. All told, Oracle’s acquisition of Datalogix represents the icing on the cake for Oracle’s marketing-related acquisitions and a key addition to the Oracle Cloud as it gears up to continue asserting its presence in the market for cloud computing products and services.

Larry Ellison Resigns As Safra Catz And Mark Hurd Take Over As Oracle CEO

Larry Ellison resigned on Thursday as CEO of Oracle after a 37 year stint as the head of the company that he founded in 1977. Ellison, 70, will be replaced by CEO Mark Hurd and CEO Safra Catz. Hurd will take responsibility for sales and marketing whereas Catz will run finance, legal and manufacturing. Meanwhile, Oracle’s Board of Directors elected Ellison Executive Chairman of the Board and CTO. Jeff Henley will serve as Vice Chairman of the Board after serving as Chairman for the last ten years. The reconfigured leadership structure preserves the triumvirate of Ellison, Hurd and Catz but creates an uncommon scenario whereby the company has two CEOs. Ellison leaves Oracle after leading the company to a staggering $185 billion valuation and acquiring a personal net worth of $51 billion as reported in Forbes. Given that software, hardware and engineering will continue to be under Ellison’s purview, the implications for Oracle’s cloud and big data strategy are likely to be minimal.

Oracle Board’s Presiding Director, Dr. Michael Boskin, commented on Ellison’s decision to step down as CEO as follows:

Larry has made it very clear that he wants to keep working full time and focus his energy on product engineering, technology development and strategy. Safra and Mark are exceptional executives who have repeatedly demonstrated their ability to lead, manage and grow the company. The Directors are thrilled that the best senior executive team in the industry will continue to move the company forward into a bright future.

Ellison’s continued influence and responsibility over technology strategy suggests that the decision may well have been motivated by a desire to retain the talent of Safra and Hurd in order to pre-empt lateral moves they might have considered making in the industry. In 2008, Ellison famously compared cloud computing to a fad that would pass and termed it “complete gibberish,” claiming that the “computer industry is the only industry that is more fashion-drive than women’s fashion.” Since then, however, Ellison has completely reversed his position and embraced a number of cloud-based acquisitions and product roll-outs. That said, Oracle still has the cash to make a major cloud infrastructure acquisition analogous to Cisco’s acquisition of Metacloud or HP’s purchase of Eucalyptus, although this is something we still might see given Oracle’s enviable cash position.

Taking Stock Of Oracle’s Corporate Sponsorship Of OpenStack And Pledge Of OpenStack Compatibility

Oracle recently announced that it will become a corporate sponsor of the OpenStack Foundation, and that it will achieve OpenStack compatibility with the Oracle Exalogic Elastic Cloud, Oracle Compute Cloud Service and Oracle Storage Cloud Service, as well as integrate OpenStack’s cloud management tools into Oracle Solaris, Oracle Linux and Oracle VM, Oracle Infrastructure as a Service, Oracle’s ZS3 Series, Axiom storage systems and StorageTek tape systems. On one hand, this announcement constitutes the most explicit affirmation to date from Oracle about its commitment to OpenStack compatibility, its acquisition of Nimbula and proleptic statements about its integration with the Oracle Cloud aside and notwithstanding. On the other hand, a large part of the announcement means that OpenStack customers will be able to take advantage of OpenStack’s “cloud management components” to manage the Oracle cloud, while the current state and timeline for the Oracle Cloud’s achievement of OpenStack compatibility remains unknown. That Oracle is allowing OpenStack management tools to manage what is currently a proprietary cloud platform is hardly a coup for OpenStack. Moreover, the announcement in Oracle’s press release that the company “will also be working to achieve OpenStack compatibility” discloses little in the way of specifics either regarding timeframe or what compatibility means for Oracle. According to The Register, Oracle has committed zero lines of code to the OpenStack project to date in contrast to the thousands of lines of code contributed by HP and Rackspace. All in all, the OpenStack community would do well to be less than celebratory about Oracle’s announcement. Oracle’s reported commitment to the project of achieving OpenStack compatibility may be great news for OpenStack’s PR machine, but the specific ramifications of Oracle’s embrace of OpenStack remain to be seen.

Amazon Web Services Continues To Increase IaaS/PaaS Market Share According To Synergy Research Group

A recent article by the Synergy Research Group (Synergy) claims that Amazon Web Services continues to dominate the IaaS and PaaS space in terms of revenue. According to Synergy, Amazon Web Services increased its quarterly revenue by 55% to over $700M in Q3 of 2013, whereas the aggregate of revenue for Salesforce, IBM, Windows Azure and Google was less than $400M for the same time period. Worldwide, total IaaS and PaaS revenues exceeded $2.5 billion for the quarter, with IaaS accounting for 64% of cloud revenues, a surprisingly small proportion given the limited penetration of platform as a service within the enterprise. Synergy Research’s John Dinsdale remarked on the company’s findings as follows:

We’ve been analyzing the IaaS/PaaS markets for quite a few quarters now and creating these leadership metrics, and the relative positioning of the leaders really hasn’t changed much. While Amazon dwarfs all competition, the race is on to see if any of the big four followers can distance themselves from their peers. The good news for these companies and for the long tail of operators with relatively small cloud infrastructure service operations, is that IaaS/PaaS will be growing strongly long into the future, providing plenty of opportunity for robust revenue growth.

Here, Dinsdale remarks that the “race is on to see if” Salesforce, IBM, Microsoft and Google can decisively secure second place in the battle for IaaS/PaaS market share. Strikingly, Microsoft, Google and IBM have revenues that are very close to one another, even though one might reasonably expect Microsoft’s Azure platform to edge out its competition given its earlier entry into the market than IBM and Google’s Compute Engine (GCE). That said, IBM’s sizeable IaaS revenue derives largely from its acquisition of SoftLayer, which itself had a rich and venerable history that predated IBM.

Synergy’s chart illustrating Q3 IaaS and PaaS revenues is given below:

Notable omissions from the findings include Rackspace, HP, Oracle, Pivotal One and Red Hat, the middle three of which (HP, Oracle and Pivotal One) are still relatively nascent, and hence justifiably excluded from the present calculation. As Dinsdale notes above, however, “the good news for these companies” and for remainder of the space is that revenues are set to increase significantly in the near term. Going forward, one of the key questions for subsequent IaaS market share analyses will be whether OpenStack’s momentum and gradual maturation propels disproportionate growth amongst OpenStack-based cloud platforms for vendors such as HP, IBM, Oracle, Rackspace and Red Hat.

Engine Yard Announces Support For Java And Partnership With Oracle Public Cloud

Today, Engine Yard announced support for Java on its Platform as a Service infrastructure. The addition of Java to its Platform as a Service means that Engine Yard now supports Java, Ruby, PHP and Node.js. Engine Yard will make Java available to developers by way of a technology stack based on Ubuntu Linux. Customers will be able to manage Java applications and environments by way of a Angular.js and Node.js user interface. Engine Yard also announced that it will add the Oracle Public Cloud to its supported list of cloud providers in addition to IaaS platforms Amazon Web Services, Verizon Terremark, and Windows Azure. Engine Yard’s support of Java continues the trend of polyglot compatibility within the Platform as a Service space. Meanwhile, its partnership with the Oracle Public Cloud illustrates the co-implication of PaaS and IaaS and the way in which Platform as a Service vendors are increasingly dependent on IaaS infrastructures to develop and expand relationships with developers and customers. Java will be available on the Engine Yard platform within 30 days.

Oracle Integrates Nimbula’s OpenStack-based IaaS Platform Into Oracle Exalogic Elastic Cloud

Oracle today announced the integration of its March 2013 acquisition Nimbula into its Oracle Exalogic Elastic Cloud platform. The integration of Nimbula into Oracle’s public cloud offering means that customers can build IaaS infrastructures based on Oracle’s Exalogic Elastic Cloud in conjunction with Nimbula’s OpenStack-based IaaS technology. Today’s news marks the first time that OpenStack and Oracle’s high performance Exalogic Elastic Cloud are available on the same platform. Customers now have access to a highly scalable, high performing infrastructure that additionally boasts all of the attributes of the open standards-based OpenStack platform. Moreover, Oracle Exalogic Elastic Cloud customers can leverage a suite of other products such as Oracle Applications, Oracle Fusion middleware, Database as a Service, Java as a Service and Middleware as a Service. The successful of integration of Nimbula’s OpenStack-based IaaS platform with Exalogic marks yet another small victory for OpenStack, which recently faces stiff competition from increasingly rich and variegated product offerings from VMware and Citrix, not to mention Amazon Web Services.