 Live from the Moscone Convention Center in San Francisco, California, it's the Q at Oracle Open World 2014 brought to you by headline sponsor QLogic with support from HGST, violin memory and MarkLogic. Now here is your host Dave Vellante. Welcome back to San Francisco everybody, David Floyer and I are back on the Cube live. This is day two for us, year five at the QLogic booth inside of Oracle Open World. Our colleagues John Furrier and Jeff Frick are in the Cisco booth going live, wall to wall with simulcasting. You know, the Cube, we're everywhere and a lot of demand for people coming on, sharing the innovations at Oracle Open World, supposedly 60,000 people are here, which is just a huge number. It feels like it actually when you're walking around. The lunch lines are big, Aerosmith and somebody else are playing. I can't remember who, Macklemore I guess are playing on Wednesday night on Treasure Island. No boat race this year, so we should get Larry Ellison tonight as keynote, so that should be exciting. Always a pleasure. Ron Zapar is here. He is the CEO of Request. We're going to talk a little bit about this world of converged infrastructure and engineered systems and appliances and what it means from an ISV perspective. Ron, welcome to the Cube. Thank you. Appreciate you coming on. Why don't you tell us about Request. Tell us about the company and what you guys are all about. So Request is an Oracle reseller services and managed services provider based out of the Chicago area. And we got involved with the converged infrastructure engineered systems play at Oracle very early on. Not long after the acquisition of Sun Accord, they came to us because we're a platinum database partner. And they said, you guys do a lot of rack implementations which are a very expensive implementation for an Oracle customer. And we're trying to streamline that both from a CapEx and OpEx perspective. We'd like to get your ideas on. So we kind of worked with them before the product was even launched initially. So that's basically who we are in a nutshell as we provide for third party companies, ISVs, customers, services around and implementation and management of their core applications that run on top of Oracle infrastructure. So I got to ask you, when the converged infrastructure idea first came out, it really was Exadata was the first, I think. Exadata was early on. It was HP and Oracle. HP, right. That was the first one. I think VCE came out just after that, but Oracle was the first. At the time, what did you think? Because you were in the business of doing implementations. Did you think, uh-oh, they're coming right after my value proposition, or we got to move? Or did you say, okay, great, we're ready, we've got these other sets of services, we're going to stay ahead? That must have been interesting times. So it was a little bit of both, right? It was a little bittersweet, but at the same time, if you look at our website, our mission statement is to increase the ROI and decrease the TCO of customers around their Oracle technology assets, right? So it played right into our value proposition. The other side of it is, in order for us to be competitive in the marketplace with some of the global providers of the services that we do, we have to be leaner and meaner, right? So we have to be able to do it better, faster, and more predictable. Okay. So the ROI statement wasn't just a marketing line. It was actually a philosophy, a dogma. That's correct. Right? Benefit over cost of benefit. If you decrease the denominator, you've increased the ROI, so you guys embrace that. So I was an econ major and a computer studies major, so I married the two of you guys, so I went to market. It's okay. So that was going to ask you as well. So you compete against obviously the big guys, and you do so by being faster, more nimble, more intimate, presumably. Correct. Are you regional in the Chicago area? We're regional for the most part. Although we do have a national presence and for some of our customers, even a global presence. So we've done, for Fortune 50 companies, we've done implementations and managements literally around the globe. We've had global law firms as customers. We run horizontally across multiple industries, if you will. But in terms of our services, we can expand anywhere. But David Floyd, you've been following this whole converged infrastructure, engineered systems, integrated systems, whatever you want. You call it SME, not to be confused with small, medium enterprise, single managed entity. Basically compute storage and networking brought together, and in Oracle's world, it's software and hardware brought together. It's compute storage, networking, and then the operating system, and then the middle wire, the javas, and everything else like that. And then the database, and then on top of that, the actual application itself. And you've done some work talking about the pluses and the minuses, the narrow proposition, if you're on the full stack, but the greater value proposition, the further up you go, et cetera, et cetera. And so you wanted to do some research and understand the impact from an ISV perspective. So you went out and talked to a bunch of folks, and Ron, being one of them, what set up the premise of the research, what did you find? So what the premise was that at the top of the stack always is the ISV. They have an application, they want to get out, that's what the customer is buying. They're not buying the database, they're not buying anything else, they're just buying the application, and the rest is cost. So the premise was, if you can create an efficient stack, and if you can make standard, all of the things underneath it, all of those elements that we talked about, what is the cost reduction that you can achieve by doing that? And if you measure it against the alternative, which is having the best of breed of each one of those layers and stitching them together yourself, which would obviously, you would have a better solution in that way, looking at those alternatives, what would be the sort of savings that you could achieve? And what would be the extra value that the customer would get from that? In other words, could they actually get more value from the software they were buying? Buy, for example, getting stuff in quicker, or getting new versions of it in quicker. So that was the premise that we were looking at. Okay, so you were modeling and using the Oracle Database Appliance as a reference? As a reference for that general theme. So what can you guys tell us about the ODA for those people who aren't familiar with it, Ron? Can you maybe set it up? Sure. The Oracle Database Appliance is a integrated stack of servers, management software, and then obviously the Oracle software lays on top of that for customers to do standard, easy, completely certified implementation of the Oracle Database in exponentially less time than it takes for you to do your build your own scenario. Okay, and so I think we have some data on this. Can we bring up that chart? Okay, it's up. So David, maybe talk a little bit about what you studied here. First of all, what are we looking at? It says comparison of traditional white box versus Oracle Database Appliance. So what are we comparing and what's the environment? This is a three-year view of the infrastructure costs. So we haven't put on this value in terms of time to get something done. We haven't put that on as a cost. We were just talking about infrastructure costs three years ago. And that includes database, software, the hardware, the labor to put it in, the whole infrastructure costs, maintenance, the whole thing. And then the second we measured was how much quicker was it to get stuff in? How many days could you take off the cycle of going from, I want this software to, I have this software and I'm generating value for it? And then we had a lot of other observations in the middle from that. So how did you get to this? Maybe take us through the case study with Ron. What kind of questions did you ask Ron and others to come up with us? Well, I mean, I should ask Ron that. I mean, what we did was to break down all of the costs in that three years, the cost of the hardware, the cost of the database itself, the cost of the application. The application cost is always the constant, isn't it? It's constant. It's always by the size of the company or the number of seats or whatever it is. Right, the modules within an integrated suite. Right, that's constant. But we looked at the effort that it took you on behalf of your customer to go, get all the stuff together and put it in. So from a cost point of view, I think we found something like about a half or 60, 40% saving. 40% saving. Yeah, that sort of order. Is that reasonable in terms of? Absolutely. And I think that depending upon the complexity and the size of the environment, it could actually be bigger than that, right? So if you think about going through a traditional systems integration project, you're going to start out doing an architecture and then you're going to walk all the way through purchase, install, and then your application implementation, and then post-production support. There's two components to that when you're talking about an ISV platform, right? You're talking about the infrastructure to run it, and you're talking about the application itself. In this world, the application itself is constant, but the variable for the customer is that infrastructure. And like we said earlier, when you're buying an application as an end user, you're not really buying the technology that lives underneath it, but you have to, and you have to think about the cost of acquisition through the cost of management, right? So you look at the two sides of it, the capital expenditure initially and the operating expense. So if you look at the ODA, the engineered system, you start at the capital expenditure side. It's a fixed cost for a two-node rack implementation that includes 48 potential pores between two servers and 18 terabytes of raw storage, and it's 60 grand. It's a fixed price. There's no having to go through an architecture to decide, are we going to use HP, are we going to use Dell, are we going to use white boxes and build them ourselves, right? It's just all there. The next step to this is the acquisition of the software. And when you buy Oracle software, you pay by the core, right? So every two cores on an Intel platform is a processor. If you're going to run a real application cluster, which is high availability, you're now talking about $70,000 a processor. And the way Oracle works is it says, well, if you have two six-core prox in this box, you're going to license six processes of our software at $70,000. What the ODA lets you do is true pay-as-you-grow licensing. So we can go in and do a sizing and turn on just the number of cores that that customer needs to run. So no longer is the customer tied to licensing to their physical platform, they're licensing to exactly what they need to run their environment from a performance and availability. So this was a program that Oracle implemented with its partners to essentially, you've got the cores there ready to go and you can turn them on. That's the way the ODA is built. So that's the premise of the ODA itself. So you go in and you basically just log a support ticket and open up a little box and say, today I want to run four cores on this node and four cores on that node, as opposed to, hey, I've got two 12-core boxes that I need to license. So you can take a huge chunk of the software cost, the base software cost, out of your infrastructure cost when you're doing an ERP implementation. And why did Oracle do this? I mean, obviously to try to gain penetration, open up new markets, but it seems antithetical to some times what you think Oracle would be doing in the marketplace. What's your take on that? So I think it's a response when they got the hardware component with the acquisition of Sun. It was actually a response to all of the FUD in the marketplace that their competitors threw at them. We go up against Microsoft, MySQL, some of the stuff that the other vendors have now, right, HANA, that kind of thing all the time. And the biggest FUD out there is Oracle is expensive to buy and it's expensive to maintain. So what Oracle said was fine. We're going to put an engineered system together that says, from a purchase perspective, only buy the licenses you need. Then from a management, so now you're in production and now you have to manage this thing. If you think about a build your own solution, you have a sysadmin, you have a storage admin, you have a database administrator. You've got software at the chip level all the way up through the application level. And somebody's got to maintain all of that. Well, with the ODA, it's one certified patch that comes up every quarter that patches everything from the BIOS all the way up through the Oracle software. So from the point of view of the ISV, they can take that quarterly package. That's their base for the software. And their maintenance, they know that that's been checked. Their maintenance costs and the time for them to put in a new version, et cetera, go down dramatically because they just don't have to test it from all the varieties out there. So when we started this conversation, we got tight on time here, but we started the conversation with the shift in your business model in terms of how you're focused. What do you make of all this cloud stuff? That's coming, you hear Safra talking about it. How will you respond as the world moves to cloud? So there's still going to be a requirement for the services that we provide, even if it's in the cloud, because there's still administration and application tuning and things that are going to have to happen above that platform, right? So it'll be ODA as a service, essentially. Basically. Yeah, absolutely. Ron, thanks very much for sharing your insights. To help us get this research done, really appreciate that and coming on theCUBE and sharing your thoughts with our other practitioners. Last question, advice for practitioners out there. People thinking about, they're struggling with Oracle, costs maybe, looking at trying to be more efficient. What's the piece of advice, the one piece of advice you'd give them? If you're an Oracle customer and you're not looking at the database appliance or engineered systems, then you're spending way too much money on your environment, period. All right, Ron. Thank you very much, David Floria. Also, thank you for coming on. Appreciate your guys' insight. Great. All right, keep it right there. We'll be back with our next guest right after this. We're live from Oracle Open World. This is theCUBE.