 Live from San Francisco. Extracting the signal from the noise. It's theCUBE covering Oracle Open World 2015. Brought to you by Oracle. Now your hosts, John Furrier and Brian Grace Lee. Okay, welcome back everyone. We are here live. Day two of coverage of Oracle Open World. This is theCUBE. We are live on Howard Street in all the action. They closed down San Francisco for 60,000 attendees of Oracle Open World. This is theCUBE. We look at Engels flagship program where we go out to the events. Extract the signal noise. I'm John Furrier with my co-host Brian Grace Lee. Cloud analysts at wikibond.com. Research, Brian, Kino was phenomenal. I loved the Golden State Warriors intro. I thought that was a fantastic kickoff because it brings a world championship team which we love the Warriors and they've been through a transformation. They had a losing team to a winning team. Great stage, whoever designed that deserves props because I thought it was a great context too. The error that Oracle's moving into, this integrated cloud is a big move for them. Data's at the center of the value. Database is their core product. They have applications on top. And I thought that Warriors teased out, in my opinion, the theme of IT and transformation today, managing your team, the players, which is customers, managing your employees, the company and managing your fan experience. That to me is the recipe for today's modern enterprise. You have a new customer experience with social media. You have people all over the place with applications but the fan experience is the customer experience. Well, the fan experience is data-driven these days. I mean, you've got Moneyball, the general manager is using Moneyball techniques to go find the best players. You've got the fans who are, they're doing fantasy sports on a daily basis, an hourly basis. Those guys want to be plugged into that stuff. They want to know what their, the users, people are saying in the stands during the game, how are you going to, is the beer cold enough? Has the food good? Are my seats great? Do I want to get upgraded? They want all that stuff in real time and that plays right into Oracle's hands. You never see Larry Ellison flinch. I've been following his career for a long time. Five years ago, I saw him on stage. He almost looked like a deer in the headlights like this is going to shift and you can almost see the smoke coming out of his ears. I said, this is the time. And since five years ago, Oracle has been on a cadence of just romping all the way down to the cloud. They now got all the products for Oracle customers. They've got a wave of innovation coming and that to me is the big theme. And data is at the center of the value proposition. Okay? They're taking their database product and all their core applications, ERP, CRM and HCM, modernizing that first to the cloud, staying with their core base. Now, I want to get your thoughts on the open ecosystem. In the keynote, we heard it's open and they showed all these logos on the screen. This is a new Oracle. Yep, absolutely. Well, it's a new Oracle and they're having to, we talked just a few minutes ago, it's an opportunity to modernize CRM and HR and ERP. That's really what they're pushing is they're saying, look, use the Warriors as an example, take your old processes, modernize them and it wraps an ecosystem of partners of new technology all around that. So it's really about modernizing a lot of existing applications and making them work better in the cloud. Yeah, and Larry Ellison's keynote on Sunday was phenomenal because you saw him up there. A proud papa saying, hey, he dove into the trenches as CTO, you got Mark Hurd, Cepher Katz as co-CEO's. The leadership on the go-to market is significant. The performance is there. Yet, we talked to the product guys here on theCUBE, they got a $5 billion R&D budget and they're doing M&A activity. So you've got a powerful, organic, internal Oracle engineering team building stuff and you got a aggressive leadership-driven M&A. That's a leaf of combination. What's your thoughts on that? Well, I think the thing we're seeing with the cloud, more so than we've ever seen with product companies on CRM, it's a big boys game, right? It's a billion dollars a quarter investment, maybe more, you've got to be able to leverage large sales footprints, you've got to be able to leverage large scale data centers. So I think what we're going to see, Mark Hurd said that there's going to be two clouds. I'm not sure I totally agree with that, but it's going to be a game that you've got to have massive investment to be able to succeed and go quickly. So I want to get your thoughts on Oracle's mojo in the cloud. You know, we've seen some press clippings out there. Oh, yeah, the top three is going to be Amazon, you know, Azure and Google, Google gets in there, but no, kind of Oracle is kind of like, it's not getting the kind of respect with this kind of power. The numbers are off the charts on the business side and you're seeing the technology. And you know, the M7 stuff is really powerful, under the hood technology and they've got the data as a service and they've got the modern applications and the openness. What's your thoughts? I think they're going to do very well in the SaaS space. They're going to do well in modernizing those existing applications. You know, the stuff they announced this morning, you know, to be honest with you, they're a little behind some of the other players in the cloud, especially from an infrastructure perspective, but the question becomes, do their customers want to get back down in the infrastructure, or do they want to just trust Oracle to sort of take care of that for them, build Exadata system, ExoBlocks, those types of things. So they're going to do well in that space. They're going to, you know, monetize that space and we're going to see how well these new modern applications either integrate with Oracle apps or they're going to get built somewhere else. We talked to a lot of the senior executives here on theCUBE in the past couple of days. We've got some more coming. We've got tomorrow's the big storage. We've got Dave Donatelli on. We've got Mike Workman and others. So it's going to be interesting. But up to date now, we've been asking them the same question. What is Oracle's strategy? And clearly it's offensive. They have looked at the marketplace, they want to take more share and they are going to cannibalize their own offering to move customers into the cloud. Do you think that's a good strategy? And if you deploy that strategy, what does Oracle have to do to be successful? Well, I mean, we deal with a lot of vendors, a lot of different companies. The thing that's really impressive to me is they're not backing off cloud. They're not treating cloud as like, well, it's just for those sort of leftover applications. They're pushing their core installed base there. They want to push their customers there. I think that's a great play. I think the fact that they're driving just the sales compensation model, the fact that they can understand that is a huge piece. I think it's probably more so than a lot of other vendors trying to be in cloud. I really understood. You know, cloud, one thing that we learned with the DevOps community is integrated still in the blank. Integrated stack, integrated cloud, which is their message here. It's an integration game at many levels. You have a core platform out there and then you have apps on top of it. Obviously, Oracle is in the app business. They have applications, but there's an ecosystem of non-Oracle apps going beyond red stack. Do you think that is resonating well here at Oracle Open World? I think the analogy that I'm going to use on this is it's a little bit like the Apple ecosystem and the Android ecosystem. Apple, you know, integrated hardware and software. They're taking a piece of those new applications and people like the experience because they know the experience, but it's about a third the size of what the Android marketplace is, which is more fragmented, lots of tools, lots of things out there. I think Oracle's trying to play the Apple game in terms of trying to drive that integrated hardware and software system. And when did Apple make their shift? If you look back rhetorical question, is when Steve Jobs came back and brought next operating system, which is BSD, Linux and Unix, they have Unix here. So the engineered systems to me is that Oracle, Apple play. I agree with you. I think it's clearly developed great experiences. Use the Unix and the engineered systems as an under the hood innovation. Offer those in silicon chips, which I think is the big story so far. In my opinion, the show that's kind of like that, the scuttle button in the hallways is people are looking at this saying, wow, I got power, I got performance, I got more cores and I got end to end encryption and I got software on silicon. That is going to be an enabler and that's going to affect the past layer, the integration, the applications, your thoughts. Yeah, no, absolutely. I think when Larry laid out and he said, look, we got in the SaaS game to begin with and we eventually learned we had to do past and we had to do some other things. That knowledge, I tell you what, the whole game in cloud is how fast is your learning curve and how fast can you make that learning curve accelerate? I think the fact that they've moved from very SaaS heavy into past, they're starting to expand past, that's a good sign for customers. The IaaS layer still has some work to do, but the real thing to look at is year over year, how fast is their learning curve accelerating? How fast are they figuring out how to get new customers to adopt these new ways of doing it? That's the key metric for me. We talked to Sean Price yesterday, who's the EVP in the cloud and he said something interesting. I said, how do you judge success? Our customers using the cloud and you mentioned the success of cloud. To me, it's about standing stuff up fast, standing up technology, standing up solutions. And to me, I think Oracle has really has shown some good messaging and performance behind them. They're basically saying, hey, we're provisioning stuff in minutes and days. That to me is very cloud-like. Well, in the flip side of that, and Sean is going to, I'm sure he's going to dive into this next time we have him on, is you've got to also get your customers to understand there's power in being able to do things quickly. I can take an idea, a business idea, go execute it, I may fail, but I can do it quickly. Having that ability to iterate is a huge piece of cloud, but it's a mindset that business users have to change. My summary of the keynote today, basically, we heard, we saw a lot of integration theme, we saw a lot of database intelligence, obviously data at the center of the value proposition, security throughout the products that Thomas Curry is talking about, and IoT obviously is something that they want, but I love the Golden State Warriors. I thought that was really clever. I thought it was well done. Obviously they won the world championship, but that is an example of a company that was in turmoil with new management team and a new market opportunity. They are really winning and they, again, they are hitting the core IT problem, the fan experience, the employees, and the team. So company, team, fan experience, that's what sports franchises have to do, multiple constituencies, and the old IT, hey, keep the employees happy, customers use the app, not anymore. The IT is now in this new environment. Well, I think what they're really trying to say is, is IT's gotten beat up for a long time, you're a dinosaur, you're not keeping up with the business, they're trying to say, look, there's resurrection opportunities, you can get better, we've given, give you the tools to start going fast, don't feel like you're dead in the water. Final question for you and wrap up here is, what's your take on the competition? Obviously, everyone is taking notice, Oracle's standing tall, it's all cloud, cloud, cloud, cloud, messaging is just pounding, you know, just like the cadence of messaging cloud, cloud, but under the hood, there's a lot of things going on here. How do you see competitors respond to Oracle at this point? Well, the competitors are all doing very well. We had earnings last week, Google was up, Microsoft was up, Amazon was up, all of those are huge cloud plays. I think really it's going to come down to, you're going to see those that are doing new cloud native applications and those that are doing enterprise applications and where do you want to get on that side of the, you know, which side of the fence do you want to be on? It's an integrated cloud market here, that's the summary of our keynote here, go to silkenail.tv for all the videos, we have podcasting now, we have Women Wednesday, where we highlight women in tech every Wednesday, and the guests of the week, throughout the week, chosen by our editors and the crowd, you guys will be determined to get our own podcast out there, go to crowdpages.co slash oow15 to check out all the content we're putting from theCUBE on that new real-time page, we've got trending hashtags, find out what the conversation is, and that's where all the assets will be in the live chat, join crowd chat there as well. This is theCUBE, we're live here at Howard Street for exclusive coverage of Oracle Open, we'll be right back after this short break.