 Welcome to Newsdesk on SiliconANGLE TV for Monday, October 1st, 2012. I'm Kristen Folletti. Storage costs social media awareness and software application migration. These are the problems facing big companies as they adapt to a world of mobile devices, cloud computing, and huge amounts of data. Prior to Oracle Open World, which kicked off in San Francisco yesterday, Oracle's co-president Mark Hurd discussed these issues and what Oracle is doing to try to address them. It seems as though Oracle is emerging as a new type of competitor in the storage wars, involving EMC Flash, SAP's HANA database, and Exadata. Joining us with his breaking analysis is Wikibon analyst Dave Vellante. Welcome, Dave. Thanks, Kristen. So Oracle's co-president Mark Hurd said in a recent interview that customers are growing their data storage by 35% to 40% a year. So what does this mean in terms of the future of storage and storage strategy? Well, the ever-present growing storage line item has been here for the last 15 years and it's going to continue. It's actually accelerating, we think, with all this activity around big data. The amount of data that people are ingesting and having to manage is just going through the roof. So the curve is actually steeper than it used to be. What that means is more cost, more complexity, and more data to manage, more risk. And so people are trying to bring that together in a way that they can efficiently manage that data and actually extract value from it. So that's the big opportunity. Those pain points are the ones that all the big competitors, including Oracle, are going after. Mark Hurd also spoke about the importance of gathering insights about customers from data, and he listed off some statistics saying only 38% of big brands can connect with their customers via mobile devices. He said the ones that have a meaningful dialogue are about 10% to actually transact business in an enjoyable way. That's about 3%. So how can companies hope to boost these percentages in terms of new data storage? Well, clearly the mobile revolution is upon us, and it's interesting to hear Oracle talking about mobile. Oracle is great. It basically goes out and buys companies and then pretty much acts like it invented the concept. Now, Oracle's got a lot of assets there. Clearly Java participates in a lot of mobile activity, but we're in the early stages of companies actually achieving and individuals achieving that nirvana that Hurd talked about. So it takes a lot of infrastructure. It takes a lot of software. It takes a lot of applications, and it's just going to take some time for that to evolve such that we can get the user experience that we really want. Mr. Hurd also mentioned software application modernization being an issue for businesses. Can you explain why homegrown applications are difficult to tackle? Well, homegrown applications involve a lot of legacy code. And the issue with that is you don't want to change the code. If you change the code, oftentimes you have to freeze the code. If you freeze the code, then you can't stay competitive. And so what people do is they just keep writing on the older platforms. Cobalt is an example. Believe it or not, there's still a lot of cobalt code out there. And the people who have gotten off of that code base are the ones who could have. Others can't because it's too risky. They'll risk pulling the plug in their business and creating a business disaster. So application modernization is a way to abstract that complexity and actually move to new more modern tools. But it's a tough and slow process, but one that a lot of companies are undertaking. And of course Oracle wants its customers to undertake that process so it can move them to its new fusion applications and new databases faster. Oracle's selling point over the competition is that it's using the same hardware and software in its private and public cloud. Can you explain these exologic and exadata computers? Yeah, so those are sort of two separate but related issues there. So one of the things that people will note is the reason why Amazon is so successful and others in the public cloud is they have a high degree of homogeneity. In other words, their operating systems, their platforms, their servers, their databases, their middleware, it's the same across the entire infrastructure. When you look at an organization in a typical enterprise, it's highly diverse. And so what organizations are trying to do, vendors are trying to do, is to try to replicate that. So you're seeing, for example, VMware and its partner ecosystem try to create a homogeneous environment. Oracle very clearly is taking that strategy such that you can move data and applications from your private cloud to your public cloud with the same security policies and maintaining the organizational edicts behind your firewall out to the public cloud. And so exadata and exologic are part of Oracle's platform for delivery. So Oracle, since it bought Sun, is really going through a vertically integrated strategy providing its own hardware and software. One of the key features of the Oracle exadata servers is the exadata smart flash cache. Can you discuss the benefits of the exadata smart flash cache? Well, so for the last 15 or 20 years, we've seen function move out of the host into the storage array. And the storage array has become the point of control. And the reason that happened is because spinning disk was a persistent medium. You could store something on disk and have it last for a long, long time. Whereas RAM memory was not persistent. If you lost power, you lost data. So you have to protect that data and put it on storage. So the sand revolution was all about protecting that data and sharing that data. Well, what's happened really largely thanks to Steve Jobs and the iPod is that flash memory, driven by consumer volumes, the cost of flash memory has come down. Flash is a persistent medium. So what we're seeing is the pendulum is swinging back toward the host server. And that's a good thing from a performance standpoint. Because the closer it is to the server, the less distance it has to travel, the less protocols it has to go through, the faster the response times will be. So what's happening now is you're seeing flash emerge as a platform across the entire IO stack. So you're seeing flash at the server level. You're seeing flash at the cache. You're seeing flash in the storage array. So Oracle recognizes this trend. They do a lot of R&D, as do some other prominent companies. And what you're seeing is that flash is becoming the predominant medium for which all active data will be stored. It's persistent. If you lose power, you can get it back. And it's, however, it's expensive. So you still need that spinning disk bit bucket. But increasingly, flash is going to be the platform on which all active data resides. And we've written about this a lot on Wikibon and SiliconANGLE. Yesterday, Larry Ellison made an announcement about a new hardware product that will be a direct competitor to rival SAP's HANA database. Can you tell us about that? Yeah, it's an in-memory database machine. Larry Ellison said that HANA, he referred to HANA as she's a little machine. And the Exadata system starts at $200,000. At least got 26 terabytes of memory. So I guess she's not a little machine. She's very expensive. Now, so what's happening is, again, Oracle was sort of late to the game with this in-memory database. At the same time, it's got a lot of experience with such technologies. And as I said before, it does a lot of R&D. SAP essentially was going at the heart of Oracle by creating HANA, an in-memory database that would allow people to keep data essentially on SAP and not have to put it into an Oracle database. So what Oracle is doing is responding to that threat. And basically taking a shot at SAP, leveraging the fact that it now owns the Sun hardware assets, and it can vertically integrate and deliver that engineered system that includes hardware and software. So the war is on. We also spoke with SiliconANGLE founder John Furrier this morning. And he spoke a little bit about Oracle founder Larry Ellison launching an assault on EMC. Now, EMC is going to be presenting a keynote of their own this week. So what can we expect from that? You've got to love Oracle Open World. It's the only place where you're partners or your competitors to the nth degree. So EMC and Oracle certainly partnered together for years, and then subsequent to the Sun acquisition, EMC and Oracle became fast competitors. And so Ellison specifically went at the heart of EMC's legacy franchise, the VMAX 40,000 Disc Array, which is a product that is the very high end of EMC's line. And it's one of its greatest strengths and one of its greatest weaknesses. It's a strength in that it's their highest margin products, and it's the legacy of the company. It's the weakness in that it's not the fastest growing part of EMC. And so Ellison is striking a heart at the underbelly of EMC. And at the same time, going after its core franchise, the big margin business. Now, the problem with Exadata is Exadata is a very narrow platform. It's not a general purpose system. You really use it for database and essentially Oracle applications, whereas EMC systems like VMAX and its other platforms, as well as EMC's competitors, are general purpose machines. You can plug them into your network, and you can support multiple applications across the portfolio. So Oracle's value proposition, while compelling, i.e., it's simple to install and manage, is very narrow. EMC's value proposition is much broader. And for companies with a lot more diversity that want to use, run different applications on a single machine, the cost can oftentimes be substantially lower. And Oracle is really trying to trade that off against the convenience of installing a single block of infrastructure called Exadata. Well, Dave, we appreciate you joining us this morning. Thanks so much for your analysis. You're welcome. Thanks for having me. For all the latest in-depth coverage and breaking analysis on tech innovation, keep up to date with news desk on SiliconANGLE.tv, number one in tech event coverage.