 Live from San Francisco. It's theCUBE. Covering Oracle OpenWorld 2016. Brought to you by Oracle. Now, here's your host, John Furrier and Peter Burris. Welcome back, everyone. We here live in San Francisco for SiliconANGLES CUBE, our flagship program. We go out to the events and extract the signal from the noise. We are here at Oracle OpenWorld 2016 on the ground floor in the exhibit hall in Big Booth, Big Studio. Breaking down Oracle OpenWorld. Of course, Larry Ellison just gave his keynote. He does the opening keynote Sunday night before the event and then saves his best for the keynote right in the middle of the afternoon from 1.30 to 3.30 on Tuesday, second day. And so we're gonna break it down. I'm John Furrier, the co-CEO of SiliconANGLE Media here at Peter Burris, Chief of Research for SiliconANGLE Media and also General Manager, Wikibon Research and Rob Hope, Editor-in-Chief of SiliconANGLE and heading up the editorial publication. We're going to be expanding on guys. Let's get into it. So Larry Ellison, he must have been tired Sunday and he must have saw our tweets about upping his game a bit. He delivered an epic performance. He really came out, guns blaring, Amazon web services, clearly in his sights, being aggressive. Peter, your thoughts on the tone. Is this the new Oracle or what's your take? Larry was pumping so much energy and it was speech that he actually overflowed a bunch of buffers. And as a consequence, it was very, very halting when it came in over the TVs here. But I think in general, he went back to his playbook or he's going back to the Oracle playbook. And the Oracle playbook historically has been we're more open, we are faster. And when you combine those two factors, we will be cheaper. So he used, they ran some benchmarks. He showed how Oracle on Oracle is faster, how everything on Oracle is faster, how Oracle on Oracle and not everything else is faster and how ultimately that turned into longer term, cheaper operations. So it looks like Oracle remembers what got it to where it is 20 years ago, 25 years ago in the last big transition or one of the last big transitions. Sounds like he's kind of going back to the playbook and running it again. The guns are blaring. Rob, you were in the session, you've been out scouring for stories. Your headline, you just posted on SiliconANGLE.com says, you're locked in, baby. Oracles, Larry Ellison, redoubles attack on AWS. Your thoughts on the keynote, what was the vibe? What struck you? Well, I mean, obviously Larry was really on his game there. He, as you said, Sunday was a little off, but this time he really came out blazing, guns blazing as you say. And he really attacked Amazon on a number of fronts, you know, performance, openness, which is kind of ironic, isn't it, for Oracle? So, you know, he's obviously gunning after Amazon or at least wanting to appear to you. What I wonder though is what that means. I mean, is he really going after Amazon or is he trying to set some sort of tone for the customer to say, like, if you're even thinking of an Amazon, you got to look at us first, right? And certainly it's on Oracle on Oracle. I heard things like, our stuff is faster. Our stuff works and to end the, back to the drumbeat of, our code is identical on premise, identical on cloud. It's the easiest way to move to the cloud. Obviously Oracle cloud, not the cloud and depositioning Amazon as being locked in and closed. It's interesting. I find it ironic too, Rob. That's the first thing I came to. It's like a lot of people have accused Oracle on their run after they started getting, you know, escape velocity as a venture. And when they really ran the table on the market, a lot of people were looking at Oracle as a lock-in. Like Oracle's database is so important. They are buying companies. People saw all goes on on the history of their, was customers felt locked in. So it's ironic now the shoes on the other foot. And not only that, he even accused them. He said, you know, you're locked in baby. And if they want to raise their prices, you better get out your checkbook. And I thought, isn't that Oracle's playbook? So Peter, that is the playbook on the licensing side. We've heard from customers that the licensing has always been a sticky issue. We know VMware has had that challenge with the hypervisor, of which Oracle's now announcing there's no hypervisor on their network virtualization. So how does these companies make money? Because certainly it's a shift of the dollars. Mark Hurd said 80% of IT spending will be in the cloud by 2025. So is there a ratchet? Is there a sticky factor for Amazon, I mean, Oracle to actually maintain that revenue growth? Well, as we talked about yesterday, there is nothing stickier than the application. When a business reconfigures itself around an application, it is extremely hard to take that application without dramatically disrupting the business. You can take out a database manager if you can move that data to some other structure, some other mechanism, and still run the application. You can certainly change hardware, and you will be able to change cloud providers. It won't be fun. It won't be easy. It will be expensive, but you can move data around and stand new instances of things up in other places. But the most sticky thing, good or bad, is the application. And so as Oracle goes forward, there's no doubt that it's going to talk about how Amazon is trying to lock people into its platform and some of the services that it's coming out with. But most of the businesses out there are mainly focused on whether or not the applications that they've either got from Oracle or have built on top of Oracle databases are working. And one point to make here, John, I have never met with a CIO or a senior IT person who's ever said to me, I really hope Oracle bones it in this next transition because I'd like to be able to throw them out. Nobody is looking for Oracle to lose. Most of these companies have so much invested in Oracle that they don't want to go through the pain and suffering of Oracle not succeeding. They would certainly like to have alternatives and they would certainly like Oracle to modernize its practices so that it appears and presents itself more as a cloud supplier. But this is overall a good thing for customers. I would agree with you, but I make a point. Cisco is one of those other companies in the early days had that stickiness with the routers. You couldn't just pull one out. It had a nice nestedness into the fabric of every business that they did. Oracle's the same way. But it's interesting, I find the tone, Rob, that you were mentioning that they're going after Amazon and the quote thing, your article, Oracle's cloud runs 24 times faster for analysts than Oracle on AWS. Now you saw about Oracle on AWS to your point, he's trying to keep the customer saying don't move to Amazon. And then the other thing I was taking back by Redshift's comments, he's going after Redshift. You pointed out- And Aurora. And Aurora, but Redshift is interesting. Redshift is the fastest growing service on AWS. Andy Jazz, he's told me that directly. And so he kind of did a nice little trick. He depositioned Redshift, great for analytics, but horrible for online transaction processing, the core for Oracle. Which is probably really not made for, right? Yeah, I wouldn't say that was Redshift's positioning. However, but it comes back down to what Amazon's all about. We speculate on theCUBE that we don't yet know what Amazon will become in the behemoth that they might be given their success. So I see Oracle really trying to kind of deposition Amazon as getting more territory in their accounts. So yeah, I don't think Oracle looks at Amazon as a replacement that they will die, but the disruption factor coming from Amazon certainly is being felt by Oracle. Would you agree? Oh, absolutely. The disruption, look, nobody or very few people looked back 12, 13 years ago and said that Amazon is going to become what it has become. In a lot of different markets. Jeff Bezos has demonstrated that he can get his troops to focus in and get very, very complex things done and have an enormous impact on a lot of different industries. Right now, we are all wondering, we're all wondering what those new, what those new industry structures are gonna look like. They're gonna be the dominant institutional forces in the next 10, 15 years. And it's clear that Amazon is identified what one part of that institutional basis will look like and Oracle needs to respond and that's what they're doing and they seem to be doing it well, but it's going to be a long, long, long haul. Well, let's bookmark that because in this segment I wanna get into what's not being talked about here in Oracle Open World and we'll get that in a second later in the segment, but let's keep on the theme of what we're hearing. Rob, you're out with your notebook, you're talking to people. What's the general point of view? What's the general consensus of your findings as you interview folks who sat through the keynotes? Is there a tone? Is there a certain thing you're hearing outside of their messaging, which is pretty clear. Oracle Cloud all the time, what's some of the things that you're finding in your reporting? Well, there are some sense out there that, you know, questions about Oracle's commitment to Cloud, especially the infrastructure part and whether they're trying to position themselves but not necessarily being completely serious about really taking on Amazon and so. As a red herring or more of a posture or legit competitor? I don't know, but the doubts are kind of interesting. You know, they're obviously not spending as much on R&D, on production of data centers. And so that's, I think people look at that and go, you know, on the one hand, you know, the investors say, you know, maybe I don't want them to spend so much because, you know, they're growing up against an entrenched competitor in Amazon, but the customer is probably, you know, want more. And so they're a little doubtful, I think, about how far Oracle's going to go. Any other findings from other old Oracle executives? Is there anything that's jumping out at you in the hallway conversations? You know, they're pretty consistent in their messaging. Needless to say, that's one of their strengths. But there was a Q&A with Thomas Currian and people were trying to lead him off on saying things, you know, and he was not taking any bait. You know, he was completely un-messaged. Well, the Oracle executives are very strong with holding the line, party line. We do get some nuggets on the Cube, one of the ways it came on. And again, he didn't really reveal anything confidential or out of bounds without the messaging, but he brought up the database piece and was really seeing that the database piece is going to be much more of a broader perspective. That's my interpretation. And I was saying earlier, getting out of those swim lanes is a key message. But it's interesting. I mean, I think the customers, what I'm hearing in the hallways, Peter, is what's the impact of the customer, right? Like, okay, the buyers, so there's no real, no one's running for the exits with respect to Oracle. So I agree with you there, but there's definitely an investment criteria going on with the customers around the future that they need in their architecture, whether that's a hybrid, multi-cloud environment, and then ultimately the fear of being foreclosed for opportunities. So like as customers think about the future, they just don't want to foreclose your situation where there's no headroom for them to go outside of Oracle. If they have to. So I think that choice option is interesting. So I kind of see the idea of this as more of a fun factor. Well, let's put it this way. This is clearly the most important thing on the table is new workloads. The second most important thing on the table is if the new workloads go to the cloud, which it appears that they are going to. And they end up more in Amazon. That's going to create a center of gravity that's going to have an impact on existing workloads. And there are few companies that have more to lose if existing workloads move into Amazon's cloud than Oracle. And so Oracle needs to intercept this. They absolutely need to intercept this. But it's also the right thing to do for their customer base. My guess is that they're figuring out how to transition the business models, revenue comes down here, it goes up there, how do we do it so that everybody wins? That's a very, very complex management undertaking, especially given that there may be a CEO change on the horizon at some point in time. The bottom line is get the new workloads, make sure that the center of gravity doesn't move too much and keep your customers. I was out last night at the press event. Also, there was an essential party and I bumped into a few folks and I had an interesting conversation with one and something that we've talked about in theCUBE a little bit, but I'll bring it out here. I said, John, what do you think about Oracle and Amazon and all this stuff? Would you take a little bit socially lubricated at the time? I said, hey, someone's going to be a BlackBerry in this equation. Like, what do you mean? I go, well, the BlackBerry had all the features of the phone, they had email, they had browser support, they had huge adoption, installed base of phones. When the iPhone came out, that was the game-changing shift for applications. So every net new mobile app now called Mobile First was really built for a computer, AKA iPhone and then the Samsung Android. So all new applications essentially were written for the iPhone and Android. So they're like, where are you going? They're like, okay, if you're an enterprise, every net new application or cloud native application will be written for the cloud. My belief is that why wouldn't you build an application for this next-gen architecture? Why wouldn't you even do it on-prem? Unless there was some specific requirement around data, software data. Well, edge computing, there's some other things. There's some specific enterprise things that will always be there, but every net new application or Greenfield application completely do. It's going to have a cloud problem. It's going to be in the cloud. So if you believe that argument, that means there's going to be a tsunami of action in cloud, period. That means everything's going to the cloud. So you believe that, then it's a simple scale game. So there's going to be share taken by the cloud guys. So who are they? Oracle's kind of new to the cloud and it's only really Oracle Cloud. So Amazon's been getting the lion's share of that. So Google's ramping up for that with Diane Green and you've got Microsoft. Your thoughts on that, that BlackBerry, will someone be the BlackBerry of cloud? And it's an interesting analogy. I think that there's going to be some early, let's put it this way, if there's going to be a BlackBerry in the cloud, if there's going to be a BlackBerry of the cloud, it would be Amazon. And I don't think Amazon's going to be the BlackBerry in the cloud. Right? Not anytime soon. No, because the BlackBerry was the first one to come out that said, look, we can add more functionality to normally what you think about a phone. And along came Apple and said, you know what? Actually almost anticipating a reason. We could turn the phone into a piece of software that runs in this handheld computer. So I don't think that Amazon is likely to be the BlackBerry. Now the question is, will Oracle be a BlackBerry as a consequence of the cloud? And again, there is, businesses have invested so much in their, in the core enterprise applications that they are configured around, that the cost to rip them out would be so great and the benefits would be so modest unless Oracle does a face-pant plant of absolutely epic proportions. I don't think it's going to happen. It's not a clean analogy, but I do remember people having two phones because work had a phone with a BlackBerry and the other one was an iPhone. But it's a hard question. But the cloud is the iPhone. In your analogy, the cloud is the iPhone. So it's a hard question, right? So we can pontificate, but here's the thing that I want to ask you, you guys both, because it's a hard question because it's early to provocatively bring this out. But what would be the tell signs for the BlackBerry? One, enlarge pre-existing condition, right? Install base. Clutching and holding on to the old way and trying to be new, BlackBerry, try to be cool, but never really, like, realize let's just go and complete a iPhone soon. What was the centerpiece of BlackBerry's strategy? That core, fundamentally core enterprise telecommunications app that handled email and phone metrics. The tell-tale thing that Oracle's doing something wrong, quite frankly, the first one would be that they start cutting people out of the ecosystem, that they start going to what you were talking about is that the suite becomes more important than the innovation. Again, I don't think that's going to happen. I'm encouraged by the fact that this very comprehensive announcement so strongly features ISVs and partners. But John, that is a really, really important thing to be looking for. Does the suite become more important than the innovation? That's a great point. And the other thing that's interesting too is the whole workload conversation because if you bring this kind of analogy together is that the BlackBerry ran workloads, it ran email, and so those workloads were highly efficient on their device. Well, remember, actually, exchange ran the email, BlackBerry ran the presentation. So the BlackBerry application was simply taking something with somewhere else so it was easier to displace them when somebody came along with an alternative. There's a lot of holes in the analogy, but it does ring true because we all know what happened to BlackBerry. So the question that's on the table is you got to transform or die, right? I mean, this is clearly a lot of stakes that are at risk here, so, interesting conversation. So the question is Oracle being kind of proactive and aggressive enough, not just on the marketing front, but in innovation, because they sounded defensive, even heard yesterday, Mark heard yesterday said, what's painting that, basically we have a situation where IT is not growing, traditional IT, so we have to get into these new things, but are they? I think they're defensive, good point. And I think my observation, one, from doing all the CUBE interviews and covering Oracle deeply that we have been, is that I think they're being defensive for reasons of not making enough progress, and that's not a function of Oracle, it's a function of their build out, and Ray Wang pointed out that the progression of building the data centers and Larry's presentation hangs together if you're an Oracle customer. You're an Oracle customer, everything he said on stage actually makes a lot of sense, totally no problem with that. The other thing that Oracle is managing is the public perception on Wall Street around their growth prospects. So I think they're holding the line, they're over-amplifying their CNBC interview, you watch the CNBC interviews, you watch Bloomberg, Mark heard is messaging like a politician, there's no real substance to any future indication of the strategy. Now we all know what the strategy is, they are not even close to being ready to get to the cloud, and that's why they're staying with their core base first, but they are going into a position to be set up for a siege where they bring their database customers to the cloud. That's when the game will get interesting, when Oracle starts really having those foundational building blocks of infrastructure as a service, pass and sass, set up on Oracle first, then the net new application metric becomes, the net new customer metric becomes important, and then you start to see the real war going on, where then it's a frontal attack on Amazon. John, you're absolutely right, but again, there is an overarching user issue here. They may not like Oracle's pricing, they may not like negotiating with Oracle, especially in the database side, although I've heard recently, there's been some moderation in that, more about there's something of a doton going on right now, but again, there is not a user on the planet who wakes up and says, I can't wait for the fun of getting, of ripping out my Oracle applications and replacing them with something new. That's just not something that anybody would want. I 100% agree, and here's my analogy on that. The marketing cloud concept we had earlier and some of the other new stuff around Oracle is pretty exciting because they're talking about design, user experience, talking about some of the real interaction, engaging components of their software towards the front end, near the consumer. On the existing Oracle, I said this on the Cube, going back to 2010, Oracle's like plumbing and pipes. It runs the water, it feeds everything into the enterprise. Why would you want to rip out and replace something that's already working? What are you adding on to the plumbing? So as a utility, Oracle has a utility effect on some of these core systems, whether it's CRM, ERP, HCM, or whatever. I get that. I don't think that's at risk. I think if better plumbing comes along. But here's another. That's very true, but here's another way of looking at that exact point, John. In most businesses, your ERP application really is your infrastructure. It's not your servers and your storage and your middleware and your network. From your board of directors standpoint, from your CFO standpoint, in most of the business, the infrastructure is the ERP application. So when we all talk about infrastructure as a service, we're talking amongst ourselves about the role that Amazon's going to play, and it's important. They're having a major impact. New way of thinking about infrastructure at a technology level. But from a business standpoint, they're not looking at Amazon necessarily and saying, oh, wow, let's go there because I can get a bunch of virtual machines. I mean, you said it earlier, the users at the center of the conversation, the customer, and here's my asset test for the monkey business that goes on between the suppliers, and it comes down to this. Whoever can enable value will do well, and customers don't mind paying for value, right? So the value equation is interesting. As a platform, if you're a platform as a service or whatever platform you are and you have infrastructure that's hardened or whatever happens, if you are creating value and enabling value for the customer in whatever form, ISVs, developers, other things, customers will pay for it. And I think what I'm hearing is customers are afraid that that enablement will be constrained somehow and boxed into a framework. The sweet versus innovation argument is made yesterday. And it's a really good point, and Rob, I'd like to hear what people are saying on the floor, because you've been wandering around more of the genre I have about this point specifically. That tension between where I am today and where I wanna go and whether or not they see Oracle, you said earlier, investing enough to maintain that stream of innovation that's becoming so important to articulating the next generation of what technology looks like. Well, like I say, there's a lot of uncertainty out there. As you say, I think a lot of them would, don't wanna move off of Oracle. I mean, they just want to be able to go to the next thing that they need to do, and analytics, big data, that sort of thing. And if Oracle can provide that, they're gonna go for it, right? I mean, why not? Why? You're absolutely right. So my question is, not knowing the technical ins and outs of what they're doing on that front is, are they going far enough on that front? I don't know yet. Rob, let me ask you a question for the folks watching. I know you're out doing, getting stories. People always try to get us to look at their stuff, get attention. As someone who's doing the reporting out there and leading the editorial for at Silicon Angle, what do you look for when you come into Oracle Open World, and you come in objectively looking at the signals, what do you look for in stories? How do you take the size of the show? Because now, Amazon started this. These shows are so big now, there's a slew of announcements. I mean, we were talking about the number of releases going out alone. Okay, there you go. There's 12 releases of this. How do you make that decision editorially to where the stories are? Well, it is overwhelming. I mean, I kind of drowned on Sunday night, and I think Larry did too. You could tell he was sort of saying, oh no, another slide. But in the end, they were mostly announcing customer relationships, partner relationships, some new technology. I look for one, the new technology. I mean, I want to know what's real here. Can't know from a press release, but you can get a sense of that. But a lot of it's a business aspect. You know, this has to work for businesses, and so I want to know, is this going to move the needle on Oracle and their growth? Is it going to keep them in the mix? That's what I care about. Great, thanks for that. Peter, what's missing? What are we not hearing here in this show that you expected to hear more of, or you think is an area that Oracle will have to flesh out as they go forward? Well, so we heard this really nice comprehensive vision of Oracle moving into the cloud and moving their customers in the cloud, and very importantly, their partners into the cloud. So that's really positive. What we didn't hear as much of is two things, and one is really crucial to the strategy, and maybe you heard some of this, Rob. But I'll do the first one and then that one. The first one is, we're only hinting at how developers are going to do things differently as a consequence of Oracle's move into the cloud. We're hearing yes, we're going to support all the languages, and yes, we're going to do all the databases going to be there, but just hints. And the developer ecosystem is still something that everybody's making a play for. Nobody has really put their stake in the ground and said, this is how we're going to do it. Amazon's play is, don't worry about IT, come to the cloud, get to what you need, build your application, make your business happy. Oracle is, and this is a segue to the other point, Oracle is more of a traditionalist than if they've got developers, they want to give them the tools that they need, bring their tools along. I expected to hear more about that, but the number two is, in many respects, as I just said, Amazon's play is, okay, IT, if you want to modernize, come work with us, but business, if you don't want to wait for IT, you have another option, you can come to us directly. Many years ago, IBM tried to play the hand that they were going to bring the IT professional along with them as they went through a transition. And they did a pretty decent job of it. This time, it's pretty much up to Oracle, I would say, to bring IT, the traditional IT manager along with them. So they're not only modernizing Oracle, they're, in many respects, modernizing their traditional customers. That's not necessarily, that's not going to be a particularly easy job, but a lot will go along with it. And we'll see the degree to which Amazon starts to fight, not just for the hearts and minds of business, but the hearts and minds of technology, you know, IT people as well. It's an interesting dynamic to see. Well, they hit the job, they hit the job. I'm sorry, answer your question directly. I expected to see more about how they were going to bring along IT people. Yeah, and I agree with that developer thing. They have Java One. So when the people say, hey, we're all developers, the comment I heard was, oh, they're all at Java One. Here's what Oracle has to do in my opinion. They have to integrate the goodness of Java One into this show because if they want to be successful in the cloud and take on Amazon and others, at the platform as a service level, this is the new middleware. I've said this before, Thomas Curry and he knows middleware, and I guarantee you the database guys know exactly where the action's going to be. They're going to need to fortify the past layer with developers and their ISV. So that's existing ISVs and new developers. And I hear zero value proposition coming out of this show around that particular piece. I think it's a major area of improvement Oracle needs to do. And if they want to win the hearts and minds of the developer, that is key because the cloud is about DevOps. You can automate the way IT and bring them along, but applications, the core bread and butter of Oracle that takes advantage of the database is coming from developers. John, I think that's a great point. We heard in the queue yesterday very, you know, we said, so where is the line between IAAS and PAS? So it's kind of blurring. And then we said, no, well, which is going to be PAS or IAAS? And the queue just came back and said, we're thinking it's going to be PAS, which it may very well be, but that's not what the interest is thinking right now. That's going to be up to Oracle to make that thing. The fact that Ray went to end the segment is that Ray was commenting and I agree with him. I think your point about the coherent message. Oracle doesn't want to over rotate and get ahead of their skis on this one because they're sequencing this play out very carefully. A lot's at stake. Foundationally build the building blocks, get their existing infrastructure service built out, then you're going to start to see the game change. So I think, you know, Oracle's doing, I think the right thing and their progress, I don't think it has anything to do with Oracle per se. I think they have build out issues and it's still early. So I'm not going to judge them on that. I think I like what I'm hearing and they're doing Oracle on Oracle first and then attacking the competition with the FUD to try to set expectations. And again, Herd is keeping Wall Street at bay, kind of keeping them down while they tool up and build out. So yeah, great stuff. Rob, thanks for coming on and sharing your notes from the reporter notebook out in the field, writing stories. He just wrote a post on the keynote just now and the headline is my favorite headline of the week, you're locked in, baby, Oracle's Larry Ellison. Read Devil's Attack on AWS. That really is the top story here at the keynote. Heater, thanks for the commentary. Right back with more live coverage here on theCUBE, live in San Francisco, live coverage of Oracle Open World. Be right back. You're watching theCUBE.