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Oracle made several announcements at its recent Open World event demonstrating its strengths in the business computing market but also that it is standing on the shoulders of giants. The company has developed the expertise, processes and market share to scale out the ideas and innovations of others. Don’t get me wrong: That statement is not an indictment. Large organizations often have challenges with innovation. They are not as nimble as their smaller competitors. On the other hand, small organizations often have challenges scaling out their successes. In an earlier post I characterized the software market as a sort of ecosystem, and this is how it works. Large organizations often look to imitate or acquire smaller firms for their innovations.

Oracle’s recent announcements of a big-data appliance, a public cloud and a social network all deal with scaling out innovations that were developed by others. As well, Oracle’s recently announced business intelligence appliance Exalytics, which I wrote about, is a variation on the appliance package but not fundamentally innovative.

The big-data appliance includes open source Hadoop, which was an obvious selection, but Oracle surprised some observers by including a version of R, the open source statistical package and a new NoSQL database based on Berkeley DB, which Oracle acquired in 2006. These additional components distinguish it from other commercial Hadoop appliances. Our benchmark research on Hadoop and information management suggests that the addition of R should be welcome, since more than two-thirds (69%) of participants said they perform advanced analytics using Hadoop. However, Oracle seems to miss this connection in its positioning, which centers on using Hadoop for data collection and transformation. NoSQL databases can take several forms, but they are most useful for heavy read/write workloads such as those found in high traffic or streaming media websites. Oracle’s NoSQL uses a key-value store. If you are interested in a technical deep dive on Oracle NoSQL, Daniel Abadi provides a good analysis here.

The big-data appliance also includes tools for moving data from Hadoop into the Oracle database. Its Hadoop Loader generates Oracle internal formatted structures to speed the data-loading process, and its Data Integrator Adapter for Hadoop provides a graphical environment for managing and creating data-loading routines. The big-data appliance was announced at Open World but is not available yet and is an interesting move and responds to my colleagues assertion earlier in the year about Hadoop and Oracle facing off in the market.Oracle wants it to be used with Exadata and Exalytics and so offers Infiniband connections for high-speed data transfers between each layer.

Oracle’s public cloud offering generated a lot of buzz at Open World – most of it negative. Marc Benioff, CEO of and one of the world’s most vocal proponents of cloud computing, had been scheduled to deliver a keynote at Open World on Wednesday. But on Tuesday afternoon Oracle cancelled Benioff’s keynote, and on Wednesday announced its own public cloud offering in CEO Larry Ellison’s keynote. Salesforce turned the cancellation into a huge public relations win, booking a nearby hotel for Benioff to give his “keynote” and promoting it heavily via social media. Oracle’s cloud offering consists of three application services, Fusion CRM, Fusion HCM and Oracle Social Network, as well as two platform services, Java via Weblogic application server and the Oracle database. My colleague Mark Smith covered the Fusion applications and the social network in separate posts.

While these services have been announced, none is available yet. Most interesting about the announcements is that they represent an about-face for Oracle. Until now Ellison has been vocal in trying to dismiss the cloud as a specialized form of computing. Ventana Research, in contrast, identifies the cloud as one of five key technologies influencing information management. Our benchmark research shows more than 40% of organizations have deployed or are planning to deploy cloud-based applications in eight different lines of business. It’s likely that having seen the market acceptance of this innovation pioneered by others, Oracle now recognizes a revenue opportunity in delivering its own cloud offering. Similarly, it now wants a piece of the social networking pie.

Oracle customers and prospects should be encouraged that Oracle is making these investments. As these offerings become competitive, there will be an opportunity to consolidate their purchases with a single vendor and also ease integration between different portions of their infrastructure to the extent they all come from a single vendor. On the other hand, those looking for technological innovation to use as a competitive weapon for gaining an advantage in the marketplace will need to look elsewhere.


David Menninger – VP & Research Director

Oracle kicked off its Open World 2011 conference with the announcement ofExalytics, a new data warehouse appliance specifically for business intelligence (BI). Three years ago when Oracle introduced the Exadata product line it was based on hardware from Hewlett-Packard. Since then it has acquired Sun Microsystems and replaced the HP components in Exadata, assuming complete control over the hardware and software included in the appliance. Oracle also introduced two other appliance products: Exalogic, which is focused on Oracle Applications, and more recently the Oracle Database Machine. Oracle’s new tag line, “Hardware and software, engineered to work together,” indicates its emphasis on these appliances and the potential for more, perhaps even some to be announced at Open World.

Originally Exadata appeared to be a competitive response to the granddaddy in the appliance business, Teradata, and a more recent entrant, Netezza (now owned by IBM). Now that Oracle has its own line of hardware it appears to have fully embraced the appliance model as a way to sell both hardware and software while maintaining higher margins.

Oracle is not alone in this move toward convergence of hardware and software. IBM has a similar push with its “smarter systems,” which it describes as integrated systems optimized for specific workloads. As part of this campaign IBM has introduces a series of Smart Analytics Systems that combine IBM hardware, data warehousing and business intelligence software. Teradata has also created a combined offering of its data warehousing products with BI software from Information Builders.

The other market trend behind this convergence is cloud computing. We see cloud computing as one of five key technology innovations driving a revolution in information management. In this case, the combination of hardware and software available as a service in the cloud places competitive pressure on traditional vendors to provide solutions that have similar characteristics including ease of use, simplified setup and lower administration costs.

However, a comparison of Oracle Exalytics to these competitors’ offerings reveals a fundamental difference. Exalytics is designed to handle BI only and to work in conjunction with Exadata for data warehousing capabilities. It can also work with other databases, but the point is that Oracle has designed its systems to separate the workloads. Oracle applications customers can use Exalogic to handle their applications workloads.

Exalytics combines Oracle Business Intelligence Enterprise Edition (OBIEE), the Essbase OLAP server, Times Ten (an in-memory database enhanced with columnar compression and analytic functions), adaptive in-memory caching and new visualization capabilities. This configuration emphasizes in-memory analytics in order to provide a highly interactive experience for the visualization capabilities. It is delivered on a server with one terabyte of RAM. Other details of the hardware include 40 cores of CPU (1033MHz Intel, Xeon E7-4870), two ports for 40Gbps InfiniBand connections and two ports for 10Gbps Ethernet connections, four ports for 1Gbps Ethernet connections and 3.6TB hard-disk drive capacity.

In general, appliance configurations offer a number of benefits. It’s easier and faster to get a system up and running because the machine has been preconfigured and pretested so all the parts work together. No additional installation or configuration of software components is necessary. As well the hardware in an appliance can be optimized for the workload it will handle. For example, by understanding the typical BI workload, the balance of RAM, CPU and storage in the Exalytics appliance is designed to maximize the performance of the system. Appliances also typically include some redundancy in components to insure maximum availability of the system. Another important benefit for enterprise customers is that there is only one “throat to choke” for support and no passing of the buck between hardware and software vendors.

Vendors themselves benefit from appliance packaging and configuration. Testing a single configuration (or a limited number of configurations) requires much less effort than testing all the various combinations of hardware, operating systems, application servers and different version of software products. A single, integrated bill of materials reduces the number of variables that need to be tested and is likely to result in a higher-quality product that not only reduces costs for the vendor but benefits customers by reducing outages and the associated time spent on support issues.

The primary downside is vendor lock-in. Once you invest in one of these systems you no longer have the option to swap out one software component for another. Similarly, as hardware advances, you are stuck with what you have, since the vendor probably won’t be willing to retrofit new components into its existing appliance.

Oracle is taking a swipe at competitors on many fronts with Exalytics. Not only is it competing with hardware vendors, the visualization and in-memory capabilities making their debut in this product are designed to compete with offerings from QlikView, Tableau and Tibco Spotfire. But while these features may help Oracle catch up to these competitors, they are not differentiated enough to give Oracle a significant advantage over them. But the emphasis on planning and what-if analysis in the positioning of the in-memory capabilities of Exalytics could be a plus. As our business analytics benchmark research shows, despite their potential benefits only 26% of organizations currently use planning and forecasting as part of their analytic processes. The in-memory configuration and prepackaging of Exalytics could make these capabilities more accessible and improve performance, which might lead to greater adoption of these valuable techniques.

This release is Exalytics version 1. As with any first release, there will be improvements over time. However, the software components are based on previous releases, and Oracle has demonstrated an ability to package and deliver appliance configurations with Exadata and Exalogic. If you are an Oracle Business Intelligence customer or are thinking about becoming one, you should consider Exalytics.


David Menninger – VP & Research Director

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