 Okay, welcome everyone to siliconangle.com, siliconangle.tv's exclusive on the ground coverage of Oracle OpenWorld here in 2012. I'm John Furrier, the founder of siliconangle.com. This is theCUBE. theCUBE is our flagship telecast. We go out to the events and extract the signal from the noise and share that with you. And Oracle OpenWorld is the scene of the biggest tech conference in the business. 50,000 people are here. Larry Ellison, the longest standing CEO of the tech computer generation is still active, still punching at the competition, still competing. It's an exciting show. We're going to be here for three days, Monday, Tuesday, Wednesday, live every day with exclusive interviews from thought leaders, alpha geeks, tech athletes. This is siliconangle.com. I'm John Furrier. I'm joined by co-host. I'm Dave Vellante of wikibond.org and John, this is our third Oracle OpenWorld and we're seeing a transformed Oracle since the acquisition of Sun Microsystems. Oracle's really been emphasizing what you have called the iPod of the enterprise, bringing hardware and software together in an engineered system, really going after what used to be its partners like HP, like EMC, and certainly becoming much more aggressive in terms of the way in which it competes. We heard a lot last night in Larry Ellison's keynote about cloud, Oracle is basically acting as though it invented the term. It's been in the cloud business according to Oracle since 2004. And you got to really be impressed, John, with Oracle's messaging. It's very simple. They wait for the market to get baked and then they jump in. Yeah, Dave, one of the things that's impressive about Oracle and also scary at the same time is that they are an absolute dominant company in the tech business. I was asked by some Oracle people what I thought of Oracle. I think I said, they're a beast. Beast being slang for just a gorilla, the 800 pound gorilla. They throw their weight around, they have huge muscle. But one of the things about Oracle that people really might not know about is they are highly a competitive organization driven by a top-down sales model. Larry Ellison's a fierce competitor. And they're not known for being an early adopter. They're known for co-opting on market trends that have literally crossed over to the mainstream and then calling it their own. Initially cutting off the oxygen from the competition in terms of upstarts and new entrants into the market and then using that leverage to compete directly against their competitors. And Oracle, traditionally, has been a software company. You mentioned Sun Microsystems. Now, with the acquisition of Sun, they now have what Larry's always wanted, a hardware company. He's always wanted to be like HP. That's the history of Larry Ellison. Now he's a software company and a hardware company and he's throwing some heavy punches at his competitors, mainly SAP, HP, IBM, and EMC. So Dave, classic command performance by Larry Ellison last night on his keynote. All the insiders in the commentary on Twitter are saying what everyone's been talking about and kind of known inside the ropes here in the business is that Larry literally is late to the party. But what he does is he packages it beautifully to give his troops and his customers the feeling that Oracle has a solution for them that can take them into the future. He uses words that we use, modern infrastructure, modern databases, the word modern. That's what he's trying to peddle. That's his vision. He's co-opting trends, calling it his own. And that's classic Larry Ellison, classic Oracle. So that's kind of my take on the keynote. And what's your take of Oracle? You have history with them. Oracle, John, is a financial and technology machine. The company's about a $40 billion company. As you said, they're a software and a hardware company. But unlike any other hardware company, Oracle demonstrates software-like margins. Oracle bought Sun, and of course, that hardware business impacted negatively Oracle's margins. The goal that Safra Katz stated is by the end of this fiscal year they will be back, John, to the pre-Sun merger margins. That means they will have absorbed Sun Microsystems hardware business into its software business and maintained essentially the massive Oracle margins. What does this mean? This means that Oracle has tremendous operating leverage in the marketplace. They can use either their cash or their stock for acquisitions. They tend to use cash. They've got a big cash hoard. They've got a great M&A team. So what essentially has occurred is Oracle is vertically integrating across the entire stack. We heard this week, John, about Oracle's cloud strategy. Oracle really is claiming that it's the only company with infrastructure as a service, platform as a service, and software as a service. And as we know, it's got the number one database. It's got the number one middleware platform. It now owns Java via acquisition. Its weak spot has always been applications. It went out and bought companies like PeopleSoft that spent six years developing fusion apps. So Oracle's trying to cover all of its bases and make doing business with Oracle extremely compelling. And it really is simplifying it for customers. Now, the biggest complaint about Oracle that customers have is, they lock me in, they charge me exorbitant pricing, and I can't get out of it, and out of it. Yet, the value proposition of Oracle is so alluring to CIOs that they continue to come back for more and more of the heroin. So Oracle, you've said is like a telco that continues to extract rent from its customers. That is what Oracle does. It does so better than anybody now in the industry. Dave, let's set the stage for our audience out there for the folks who are interested in understanding what the signal is from the noise of Oracle. There's a lot of noise. They shut down San Francisco, you know, San Francisco's outside of the venue. And it really is a battle between salesforce.com and Oracle in terms of who can have the biggest events. And this is again, to build on top of the Dreamforce event that Salesforce had last week, which we did not attend. This is a bigger event, and we're in San Francisco. So let's set the stage for Oracle. There's a lot of noise here. There's a lot of also the big players here. We're looking at companies like Semantic, Informatica, Accenture, VMware, IBM, EMC, HP, Intel, Cisco. All the big companies are here, including the service providers. Oracle has had years and years of success with this ecosystem and the enterprise. And right now we are seeing a massive transformation to cloud, mobile, and social. That's their core branding. So let's set the stage. So I want to ask you, Dave, describe to the folks out there what the scene is like here from a really big picture. Who's here? What's the messaging? What's the positioning? What is Oracle saying here? So Oracle Open World is Oracle's largest event. It's one of the largest events in the industry. About, I believe, 40,000 people. I don't know what the official number is this year. But it's Oracle's big customer event. And John, as you have said in other segments, I've listened to you. Larry Ellison loves speeds and feeds. And he jam speeds and feeds down his customers' throats at this show, talking about exadata and exologic and exolytics and all the cloud and all the performance and all the flash really hyping up. I mean, he is very much like Steve Jobs of the enterprise. So the vibe here is a lot of customers that are reliant upon Oracle. A lot of DBAs that really know Oracle and love Oracle. And that really is their expertise. That's their wheelhouse. And Oracle is playing to that. Alongside of that, you have an ecosystem that is increasingly becoming competitive with Oracle. A great example is EMC. EMC and Oracle have become really quite vicious competitors. Oracle's always, Larry Ellison's always taking potshots at EMC's core disc business, saying how Oracle can outperform them. Joe Tucci, EMC's CEO, will be on stage tomorrow, tomorrow morning, and will have paid probably around a million dollars for the right to talk to Oracle customers. So while there's this competitive atmosphere going on, companies and competitors like EMC have to be here to appeal to that customer base. So you've got this situation where you've got the old line competitors of IBM and Microsoft competing with Oracle, and then the new line competitors, such as Salesforce and startups like Workday and importantly, John, EMC and VMware, the new platform company that is really taking the enterprise by storm. We're going to dig into the course of the next three days here on siliconangle.com and wikibon.org to drill down into all the specifics. We're going to extract the signal from the noise for you and get into the weeds and talk to industry experts, geeks, alpha geeks, and what we call tech athletes to get the signal from the noise and understand what this means for CIOs, for enterprises, for business, for the press, for everyone, what is going on with Oracle. We will explore all those topics. No stone will be, all the stones will be unturned here at Oracle Open World, but let's just first set the stage of what this means for businesses that have Oracle or have people pitching to them from Oracle in today's modern enterprise day. So here's my take and then I'll have to get your take. My observation is Oracle has hardware with Sun. They understand that their software business is under siege from the new demands with mobile and cloud computing and they're trying to transform that. But first and foremost, at a more kind of a higher level, Larry Ellison is trying to be the Steve Jobs of the enterprise. And if you look specifically at that, and in his keynote last night, he said specifically that we're going to get more proprietary silicon. That means he's going to build proprietary hardware with their Oracle suite and put everything into the cloud. This is what it means. Oracle is doing the Apple Playbook. Apple rolled out their own hardware to control the user experience and to control the performance. A closed system if you will. And that has been a very successful formula for the consumer business with Apple. Oracle and Larry Ellison are taking the exact same playbook and saying, you know what, we can perform faster. That's all that matters is performance and can the software run in an environment that customers can use. So for the CIOs out there and for businesses, Larry's trying to position himself as this modern company built on this old legacy software. And then on the product side, it's all going to the cloud. People need mobile computing. And you hear things like a new database, flash memory. These are the mega trends, big data, flash memory, solid state drives, cloud computing or driving and transforming Oracle. If Oracle does not make these moves, Dave, they will die and they understand that. They're protecting their business. So to me, that's the big set to set the stage. So if you're looking at Oracle, you're trying to understand Oracle, whether you're looking at buying their stock or buying their products, you got to understand that this is a major, major transformation for Oracle. Larry can put all the sizzle he wants, but at the end of the day, what's on the grill and the steak that's on the grill is legacy steak and he's trying to polish that up and make it look modern. Well, John, it's amazing to watch over the last three years what Oracle's done. I mean, you know, they were perceived as behind and behind Salesforce and SaaS. They were certainly perceived as being and were, we've said many times behind VMware and virtualization. They went out and made some acquisitions. But the key to what they're doing now is they're putting it all in the cloud. So they're, in my opinion, John, they're losing the battle, the head-to-head knockdown, drag-out battle in the enterprise for the virtualization sale. For example, what they've done now is said, all right, we're going to wrap that all into the Oracle private cloud, the Oracle public cloud. We're going to use the same hardware and the same software between those two systems. They've just simplified it for customers. Just really changing the game. Exadata, again, was a way to change the game. I mean, Sun was perceived as behind in hardware, they were seen as a UNIX company. Oracle brings them in, they bring the hardware and the software together. All of a sudden, Exadata really changes the competitive landscape. So Oracle, really very deftly, under the leadership of Ellison, and I have no doubt he's got his hand intimately, has really changed the game in a number of those key areas where they were perceived as weak and now they're out marketing how they are number one in all of these. Now, the reality is, you know, their technologies are mixed, but they do spend a lot of money in R&D, and any company that spends that much money in R&D, you know, five, six billion a year, is going to be a major force to be reckoned with. Let's talk about what people are saying on Twitter and on the social web, Jay, because we've been obviously participating in that, we've been amplifying that, and then what companies are going to be affected by this? So the scuttlebutt on the social networks from this keynote last night and this morning is that Oracle is late to the party. Oracle is promoting all these solutions. It's not open, it's closed. Larry's saying he has the top 20 banks, the top 20 insurers, the top 20 of everybody, 20 of the top 20. That's not an open architecture. So there's been some scuttlebutt about that, but also about that people are impressed with the performance, but not so impressed with the narrowness of this solution. So that's one thing. The other one is that there was a comment on Twitter yesterday that I loved and I favored. So you go to twitter.com.com. You'll see this. One of the commentaries was listening to Larry Ellison talk about the clouds, like listening to Dan Marino talk about winning a Super Bowl, Dan Marino never won a Super Bowl with any dolphins. So it's kind of interesting. So Larry's kind of late to the party, hasn't won anything. This is a new territory for Oracle. He's going to try to polish it up and make it sound good. But Dave, that's pretty much what's going on on the Twitter sphere. And you can go check out Oracle Open World hashtag, which is pound OOW or pound OOW12. And of course, this is siliconangle.com's coverage of Oracle Open World. You go to siliconangle.com. You'll see breaking analysis. Every morning we'll do a segment on siliconangle.tv and then we've got a live cube here. So that's pretty much what everyone's talking about. Yeah, so let's take a look at the cloud strategy of Oracle. So a couple of years ago, several years ago now, it must have been three or four years ago in an interview with Ed Zander at the Churchill Club, Larry Ellison, which is now famous, was really trashing clouds, sort of denigrating the concept, big deal, it's water vapor, it's microprocessors and servers and storage. And we've been, you know, renting that for years and years and years. So everybody sort of perceived that Oracle was behind in cloud. Now today, Oracle is claiming that it is the only company that can offer infrastructure service, platform as a service, and software as a service. So it's taking on its major competitors on all fronts. It's got a three-front war just in cloud, John, let alone the on-premise side. So it's taking on Salesforce in SaaS. It's competing with Workday. It's, in fact, mentions Workday specifically in some of its conference calls. Trying to close the gap with them. SuccessFactors, which is the huge acquisition by SAP. It's taking on Microsoft Azure and VMware and platform as a service. And it's taking on Amazon and VMware and its ecosystem and infrastructure as a service, providing the same OS and VMs and exadata and exologic, both internally and externally, behind the firewall and externally so that you can move your data. This is the value proposition, move your data and maintain the corporate policies and the corporate edicts. That's a compelling value proposition for CIOs that are concerned about security in the cloud. There's a gotcha, though. There's a big but, and that big but is you essentially will be buying all Oracle all the time. Well, what's wrong with that? They got great products. They spent a lot of money. They've got, they stand behind those products. The issue is, Oracle will absolutely lock you in. That's what they've done with exadata. That's what they did with the database. That is what they're doing with Fusion Apps. That is Oracle's strategy. They make it such a compelling and alluring value proposition, lock you in and then change the rules of the game. Negotiating with Oracle is a project and you should treat it like a project and be very savvy and astute about it. And many customers are not. They don't have time. They have pain. They just want that pain to be solved. Oracle very intelligently and smartly plays upon that and offers extremely competitive products in an industry that is moving fast. So let's just run down the announcements that were made last night at Oracle Open. Larry Ellison's keynote. So the key announcements were, the first announcement that came out of his mouth was, Oracle's Cloud Infrastructure as a Service. Infrastructure as a Service, that's basically virtualized compute and storage services. That's taking on Amazon.com. Amazon.com is known as having that elastic compute cloud and he mentioned Amazon by names. The first time Larry Ellison has ever mentioned Amazon by name. And I'll also add to that, if I may, John, that he talked about, it's not really competing with IBM. I don't buy that. It's clearly competing with IBM. It's also competing with VMware and its ecosystem of partners like CSC and others that provide those types of services in the cloud. Second announcement was, an Oracle-owned and managed private cloud. This is basically of, you can have it on-premise. You can take it to the hybrid cloud or private cloud. Oracle Infrastructure, Oracle-owned and managed private cloud. That is basically saying their stuff, you can run anywhere and deploy those applications. The third announcement was Oracle's version 12C, multi-tenant database management system. This is their new database. So the new database is basically an in-memory database. This is the database for the cloud, the cloud database. This is Oracle's big announcement. This is what we're going to drill down in the cube this week, the flash memory, the in-memory. All that stuff is going to be killer and that's a big part of their offering. That's a multi-tenant solution. And so multi-tenancy is a big hot issue. We've been talking about a VMworld, EMCworld, Sapphire. All the top shows, multi-tenancy is the hottest issue in cloud, a lot of issues around that. Scalability, security, how do you secure everything? Oracle has a story there, we'll drill into that. The fourth and final announcement was Exadata's X3 database in-memory machine. This is the fully flashed version, a 28 terabytes of in-memory, multiple databases in memory. This is all about moving away from spinning disk. This is a direct, direct strike at SAP HANA and also at EMC. So SAP HANA competing on the software side, EMC competing on the hardware side. So Oracle is absolutely going head to head with EMC on the spinning disk and moving it all to flash in-memory. Massive announcement that's a big deal and the entry level configuration is $200,000 and gets higher and higher. So those are the four announcements. Real quick assembly, infrastructure as a service, taking on Amazon, have a private cloud and database and an in-memory machine, this is their full package for cloud computing, three layers of solutions, infrastructure as a service, platform as a service and software as a service. And that means Amazon has only one of them, infrastructure as a service. Salesforce.com only has platform as a service and software as a service, not infrastructure as a service. So Larry Upsestakes puts it up on the scoreboard and there it is. Yeah, I think the closest to the strategy, I think in my view, the two companies, IBM and VMware. IBM itself, because IBM is so large, you can sort of do it all. And VMware through its partners. Now VMware's got partnerships with a number of companies, I mentioned CSE, there are many, many others, whereby they will utilize VMware hardware in a public cloud offering and a private cloud offering, that homogeneity. Obviously VMware has platform as a service, cloud foundry and then it's also got into the applications business with SAS. Now that's the weakest part of the business in my view for VMware, but it's not giving up there. I mean we had Todd Nielsen on there, they clearly are trying to appeal to the application development community, but really Oracle's got some credibility, don't you think, in saying that it has capabilities in each of those. And you may not like having to buy its platform as a service, maybe you don't like some hardware, I don't know, but they've basically got it covered in all of those. This is a story about open versus close. If you're open, you're going to go with HP, you're going to go with SAP. If you're closed, you're going to go with Oracle. And this is absolutely the case where if you look at the different solutions, like VMware for example, is building out an amazing stack, an amazing set of solutions, but here's the problem. They got to build out. Oracle is just putting the stake in there saying we're built out. So that's Larry's move. Larry's move is to say we are built out, here is a viable solution right now and challenges VMware to go build out. So but there's two trade-offs. You want closed, turnkey with Oracle, you want build out with VMware and the rest of the world. So HP, IBM, Dell, these are industry standard solutions. Oracle doesn't care. Oracle wants Oracle proprietary hardware, Oracle software, there's some threats from Oracle customers saying we don't want it on-premise so they put it in the cloud. That's their move Dave. So the question is open versus closed. And you nailed it. It's built out. Now the impressive thing about it to me is that Oracle in many ways, in my mind anyway, is an M&A company. They got $30 billion of cash and short-term investments on the balance sheet and they set forth a vision. Larry Ellison changed the game. He used to denigrate companies that would write checks instead of writing code. And then Ellison realized that this business is changing, it's consolidated, he went out and he started to go on one of the most epic acquisition sprees of our time. But he didn't just buy companies there, I will figure it out later. Oracle's always had a vision and a strategy. Now, they don't necessarily lay out that vision at events like this. They really, as I said before, they jam feeds and speeds down your throat. But very clearly Oracle has and has had a playbook with its apps business, for fusion apps and the acquisitions that it's made with its cloud business. It saw that cloud was beginning to hurt its business with Salesforce and now new startups like Workday. It has now said, all right, we can do that too. Okay, Mr. CIO, we have that. Like you said, John, I think you know it. It is built out here today. Now, you can buy it, we stand by it. You know, we're a reputable company. Sign in the dotted line. Well, the question is, it's built out, but is it workable and is it fit the solutions? And that's again, we're going to dissect all this on here inside SiliconANGLE theCUBE and you can go get more information. We're covering it all on free content on siliconangle.com, where we extract the signal from the noise and go to wikibond.org, wikibon.org and go check out all the information there. It's all free content. And there's areas we can point you to. So if you go to wikibond.org slash big data, there's a place you can get all the latest original content from SiliconANGLE wikibond about big data, videos with experts, research reports, everything. We have some great research on IO-centric infrastructure to highlight the emerging companies like FusionIO, violin memory systems, EMC, HP, IBM and Dell and what's going on with those guys. I want to make a suggestion to our listeners here, our audience, go just Google the limited value of Oracle Exadata, the limited value of Oracle Exadata and it talks about the narrow value of Exadata versus a more general purpose machine. And I think it will sum it up for the customers who are out there that are trying to figure out, okay, is Exadata the right choice for me? And I think there's a trade-off. Exadata is going to be very narrow in its value proposition. You're not going to be able to use it as a general purpose system across the entire application portfolio. At the same time, it's convenient. But if you're worried about diversity and you have a lot of homogeneous applications in infrastructure and you're worried about long-term TCO, a general purpose system might be better like one from HP or NetApp or EMC. So check that piece out, the limited value of Oracle Exadata to try to help you squint through some of those trade-offs. Okay, so let's change gears a little bit and talk about big data here in SiliconANGLE.com, Wikibon theCUBE. Big data is an area we've been covering. It's exploding. It's the hottest trend in the tech business that I could remember. It's changing, creating a lot of value. Dave, we were expecting to hear from Larry, but we didn't hear much about it. We predicted we would hear a lot about big data. Obviously, we're going to have Jeremy Burton on from EMC and Joe Tuj is going to be giving a keynote about the face of big data. Big data's hot. I mentioned go to wikibon.org slash big data. Find out all of our original content. But big data, Dave. What is going on with big data here at Oracle? Because big data is a disruptive revolution that's changing businesses. Instrumentation of business real-time dashboards. SAP was promoting that concept. So it's a disruptor. So Oracle is the anti-disruption, the anti-innovation company. They don't take any chances. They wait for it to be validated in the market before they do anything. So is big data not ready for Oracle to co-opt yet and own? Or are they nervous that it's going to disrupt the database market? Because we're going to hear from the CEO of Cassandra. DataStacks was in the Cassandra space. We talk about Hadoop's world coming up in New York. The database market is being disrupted by the big data trend. And that's a direct threat to Oracle. That's going to affect their stock price. It's going to affect their sales. So what's your take on that? Well, there's no question that Oracle, in my view, right now is not ready for big data. But they will be. They'll use that playbook that you just outlined. They'll wait for the market to bake out. They'll watch. They'll make strategic acquisitions. And then all of a sudden at Oracle Open World, they'll be like, Oracle invented big data. Now, very clearly, the NoSQL movement is a threat to Oracle. And also a recent announcement by Google of Google Spanner, a globally distributed transactional oriented database that allows synchronous communications over distance. That's never been done before. And that strikes directly at the heart of Oracle's value proposition. So big data, John, is all about open source. It's all about disruption. It's about things like Hadoop. It's not, in my view, about legacy databases and Exadata. Now, having said that, Exadata is different, but I don't consider Exadata as quote unquote big data. Do you? I do in a narrow way, right? I mean, here's the thing that I talked about when I commented on Larry Ellison's whole Steve Jobs positioning. Being the apple of the data center. Apple does not need to play well with others because they don't have to. All they have to do is put the iTunes music out there and they disrupted that with the 99 cents songs and an App Store. That ecosystem feeds, feeds Apple. Okay, so the marketplace feeds Apple's business model of having proprietary optimized hardware with their high end software. Okay, Android's catching up a little bit more open, but for the moment, iPhone works because of the iTunes and because of the App Store. Yeah, they've got great products and that helps too in the hardware. Oracle's different. Oracle needs to play well with others. CIO's main job is to integrate multiple vendors that have multiple solutions. So it's very, very rare for an enterprise to have one vendor. And that is really, really important because what this does is it makes Oracle the bottleneck of innovation and expansion of enterprises. I'll give you an example. Software-defined networking. Software-defined networking is the hottest trend happening at the network layer. It uses virtualization to make networks faster, more productive, and actually optimize for the new kinds of traffic patterns with mobility and cloud. That's a disruption to Oracle. Oracle's got to build that into their monolithic closed system. So that's just one example. The other example is applications. No one wants to write applications for Oracle because they know that they'll kill them. They don't have that app store dynamic. So these are major forces. So this could be a miscue of epic proportions by Larry Ellison. If he cannot manage that dynamic, he will never, ever be the Steve Jobs of the enterprise because of that interoperability. And I've been in the enterprise now coming up the 30 years playing in this business and I've never, ever seen a monolithic proprietary solution move fast and be dynamic and win. So one thing's clear. Well, I'm going to say clear, but it appears clear that Oracle's not going to come in and try to do its own Hadoop distribution, for example. Microsoft has aligned with Hortonworks. We've seen Oracle aligned with Cloud Era. Now, having said that, maybe Oracle takes out Cloud Era someday and gets into that business. Oracle owns some key pieces of open source software, Java and MySQL. Who would have thunk? And so I have no doubt, John, that Oracle is going to scan. They've seen this before. They're like, it's like the IT guy, as new technology comes along, it's going to change the world and he or she, they wait, they wait, they wait, and they say, okay, look, it's about the people and the process. It's not so much about the technology. Now, I think what's changed is 20 years ago, with the PC revolution, the mini computer guys were caught off guard and guys like Larry Ellison were the ones who disrupted them. Certainly Intel and Microsoft and others, EMC. And I think that the legacy of companies like Oracle is to build great companies and be able to navigate through these periods of disruption. And so far, I just don't see Oracle getting disrupted to the point where we see a repeat of the Prime and the Wang and the DGs of the world. So you're watching siliconangle.com, siliconangle.tv is theCUBE. This is our flagship telecast. We go out to the events and extract the signal from the noise. I'm John Furrier, my co-host Dave Vellante, founder of wikibon.org. We provide real-time research, real-time commentary, real-time video. We go out to the events, extract the signal from the noise. Got a great lineup of guests this week, CEOs of startups. No one from Oracle is coming on, Dave. So again, third straight year, GorillaQ, we come in. Maybe next year they'll have us on the big stage and provide some commentary, but here's what we're going to do. We are going to analyze and provide commentary around the signal coming out of the noise because it is very noisy here at Oracle OpenWorld. 50,000 people in attendance. Massive navigation challenge. People trying to figure out what the hell's going on. Larry Ellison is a showman. He's an industry statesman, tech legend, tech athlete, Hall of Famer. I mean, everyone else is kind of sitting around. We had Scott McNeely's working on some startup, doing some philanthropy. Joe Tucci really is the really one other guy around that has that kind of legacy power, but Larry Ellison's standing around. He moves the crowd. He moves the masses. In a way, he's got a job-esque kind of feel to himself right now. He was a founder too. And we're going to extract that signal. So stay here, SiliconANGLE.com. And Dave, let's quickly review again the announcements. What's your takeaway from the big picture here so far? What's the signal coming out of the keynote and day one morning of Oracle OpenWorld? So the signal is, Oracle very clearly has laid out its cloud strategy, starting with the infrastructure as a service, building on that platform as a service, and then of course software as a service. And it essentially is taking its fusion apps, making them available on the public cloud, taking its core platforms of database and middleware and Java, making that available on both public and private cloud. And of course, infrastructure of a service using Oracle hardware, Oracle software, and making that available. So the complete cloud stack. Now, as you've pointed out many times, that is the red cloud. And so buyer beware. But that is a very clear part of the strategy. In addition, we're talking about exa-everything, the new exa-datas, a lot of flash. We've seen this coming. Oracle's going to be competitive, take off the gloves, make radical claims about performance. What Oracle oftentimes does, John, is it'll compare its current performance to a generation ago of the competitors. It's been known to do that from time to time. Some of its competitors have objected, even in court. But you'll see Oracle do that. Let's talk about the competition real quick. Let's go down the line. Oracle has traditionally been a software company competing against SAP and other companies that they've taken out, right? Siebel, the list is endless. Now, a lot's changed. So just take us through your view of the competition. Yeah, so the competition is all over the place. Oracle is essentially at war with the world. It's biggest competitors traditionally have been IBM and Microsoft. IBM obviously very successful, does a lot of R&D, Microsoft from a software standpoint has always been one of Oracle's biggest competitors, as well as SAP. IBM I think is still the most broad competitor of Oracle. I think the other broad competitor is EMC and VMware. I think they are attacking on all fronts. Microsoft certainly with platform of service and Azure is relevant. But I think that others have more momentum in the marketplace. SAP with Hannah Oracle has countered SAP. So what you have here from a CIO's perspective is Oracle wants to be your preferred supplier. You're relying on Oracle technology and Oracle databases for your core operational systems and they're building out applications and platforms around that. They, like any software company, are happy to see hardware become commoditized and put as much function, integrated function into their software and hardware stacks and charge premiums for that. That's how Oracle will differentiate. So Oracle, full line supplier, a lot of services that still makes a ton of money on its maintenance and essentially a strategy to lock you in with that compelling value proposition. Let's talk about the CIO and then we're going to talk about developers. I want to get your perspective. As if you're a CIO, what is your current point of view of Oracle? How do you feel emotionally about Oracle? Are you happy? Are you confused? Are you trying to replace Oracle? I mean, because they got competitors like Workday going public, we just saw the news at the wire today, they're going to go public at a $3.6 billion valuation, give or take them 100 million here or there. But they're exploding and we're hearing that Workday is not running into Oracle and that customers are racing to move off Oracle. What is the CIO thinking right now, Dave, from what you're hearing, what you hear and what you believe and what you're hearing from your practitioners in the Wikibon community? So I think it's a bifurcated message in the marketplace. So CIOs, first and foremost, are there to deliver value to their business, business value. How does a CIO deliver business value? They deliver business value through their applications which touch the business processes. Well, the application development heads are highly reliant upon Oracle. So they have a lot of influence over the CIO. At the same time, the CIO is frustrated because Oracle has locked them in. They have been jacking up prices. They're very hard to deal with. They're tough negotiators. So any opportunity that a CIO has to reduce his or her reliance on Oracle, the smart ones will take it. Salesforce was a perfect example. CRM was a low risk application for them to pursue without Oracle. It's not the core operational database of the company, the transactional database, although it's becoming more and more so. Same thing with Workday. We've been tracking Workday for a while at SiliconANGLE Wikibon and very clearly Workday has fabulous momentum in the marketplace. Why? Because it's highly functional HR software that is simple and cloud-based. It's almost the CRM of HR software. Now, Oracle will try to close that gap. They'll try to keep people on. They'll try to bundle in the services. But you can see pockets where people are very effectively competing. Virtualization is another one. VMware very effectively competing against Oracle. And I think CIOs look at that saying, hey, my infrastructure is being built around VMware. I need you, Oracle, to support that. And Oracle supports that reluctantly. So very mixed emotions from the CIOs. On the one hand, they're reliant upon Oracle. They're very interested in Oracle, in Oracle's direction. They'll go give Oracle time much more so than they will infrastructure companies. But at the same time, they're kind of pissed off because of the way they've been treated. And that's the yin and the yang of the CIO's view toward Oracle, in my view. Let's talk about developers. Obviously, Larry on stage says they're number one in the software environment with Java. Java is under siege. And mainly because Java is so successful, Larry is correct, it is number one. And that's not Larry's doing, by the way. He acquired that with Sun. So it's out there. Oracle controls Java. That means a lot to developers. And developers right now, in my opinion, from what I'm hearing. And we haven't heard anything here in the floor in terms of announcements. Java one is going on, we're going to hear. So hopefully something about that. Java is a different programming direction that's powering Hadoop and all these other movements in big data. And then you've got another track, the classic programming track of C, C++. Two different disciplines, two different paths, two different sets of solutions and vendors. Google on one hand is going all the way down that track, and then the open Apache area with Hadoop is Java-based. So one of the things I'm watching is what Oracle will do with Java. If Oracle screws with Java, the licensing and the expansion of Java as a programming language that's free and free for developers to provide innovation on, then that's going to screw with innovation. So I'm really watching that. So if you're a developer, you've got to watch what's going on with Java. Really watch everything that's going on. Don't let Oracle get away with manipulating the licensing. And we're going to keep a very close eye on that. Well, Java is, I mean, Oracle's going to exercise its priorities over Java. I mean, that's clear. I mean, they will take contributions from the open source community as long as they fit into Oracle's roadmap. And so I think the development community is wise to that. But at the same time, they know Java. It's convenient. Many of them love Java. And so they want to continue to program in Java. So it's got that inertia and that brilliant acquisition. A lot of people, John, you and I have talked about the sanity of that acquisition of Sun. And a lot of people, I've been in arguments, for instance, I got an argument with Jim Stallings of IBM over the merits of that acquisition. Sun owned Java. Oracle now owns Java. Oracle writes all of its apps in his entire platform in Java. They now own that. There was no way that we're going to let that get into IBM's hands. You remember, IBM was really at the doorstep with the acquisition of Sun Microsystems. Oracle didn't let it happen. So they got Java. They got control of the Java platform. And it enabled them to do this hardware and software engineered systems together. That has completely changed the competitive landscape of the enterprise. And mark my words, it's here to stay. Competition back to competition. When Larry Ellison tends to get on stage, he validates companies. He validates market spaces. This is what Oracle does. Oracle does not innovate. They essentially embrace and extend the term that needs to be coined for Microsoft. So that's good, okay? That's good for Oracle and it's good for their business. I get that. So let's talk about what they're endorsing. Infrastructure's a service. They're endorsing Amazon. Oracle Cloud and Exadata, that's private cloud and hybrid cloud, they're endorsing that. And then this affects a couple things. So to me, SAP, the HANA product has absolutely been doing extremely, extremely well against Oracle. So Oracle won't come out there and say it. They kind of dis HANA. But whenever Larry Ellison mentions a company by name or mentions a direction, it is absolutely putting a dent in their armor. That's just the way it is. Oracle, I've seen Oracle, that's their moves. So dent in the armor, Amazon, okay? Platform as a service. That's SaaS and HANA with the in-memory. And then the third one is EMC. He trashed EMC yesterday. You know, flexing his muscle, ha, ha, ha. I got better benchmarks. You have all zillions of hardware, sprawl of EMC VMAXs, but I have one elegant solution. Oh, by the way, mind scales up, you're maxed out. An absolute target of EMC. Target of SAP and Amazon. Three names, Dave. I want to get your take on that. Let's start with EMC. I like when you go with that. I think you're absolutely right. You know, I'd not thought about that, but yet again, John Furrier comes up with an interesting angle. So Salesforce Workday, Amazon, EMC and SAP are the big five that I've heard so far this week and leading up to this event. And of course, IBM. IBM doesn't need validation. I mean, IBM is the king of the industry. But so- By the way, no mention of HP. No, no mention of HP. Yeah, I mean, you know, HP and Oracle used to be really close partners. Oracle Unix was the, you remember the 90s? I mean, Oracle Unix is what really defined open systems. So let's talk about one company that was not mentioned that we're very familiar with, NetApp. They're like this little Indian reservation that no one really has taken out yet. They're an independent storage company, okay? I've speculated on SiliconANGLE.com that they're a ripe acquisition target, although everyone's screaming, oh no, you're crazy, they're worth billions of dollars. You know, hey, I've seen other acquisitions go for billions and billions, but NetApp could be an interesting acquisition for Oracle. So the question to you is just going to put this out there, Dave, I want to get your analysis. What would Oracle do if they bought NetApp? And one, is that a viable, even plausible conversation? I think it is plausible. Certainly there have been a lot of rumors about that. I personally don't think it's going to happen because I think it's too rich for Oracle and not strategic enough. I think Oracle would rather use what many people consider inferior storage. Hold on, hold on. HP paid $10 billion, $11 billion for... Autonomy. Autonomy. Today's market cap of NetApp is $11.9 billion. Well, first of all, I'll still take over. First of all, I don't think HP should have spent $11.9 because of Autonomy. So notwithstanding that, could Oracle take out NetApp? Absolutely, there's no question in my mind that if Oracle wanted to, and if NetApp were viewed as strategic, that Oracle could do that. I think, however, that Oracle feels, this is just my opinion, and I have any inside information here, that Oracle feels that it can compete with what many consider inferior storage hardware from Sun, and it can compete and do good enough. Oracle tends not to pay up for huge acquisitions, except things like Indeka, paid a big number for Indeka, but I think it views that the Symantec platform of search is strategic to application development down the road. I think it's paid up for a number of social applications, but I think it sees social as a component, as a feature of applications, not a business in and of itself. As such, I don't know if Oracle wants to compete in the independent storage business. Oracle wants to integrate. In order, why is NetApp successful? NetApp is successful because it's one of the best, if not the best, pure play storage company out there. In fact, I'll say that. NetApp is the best pure play storage company out there. EMC's not a pure play storage company anymore. A lot of the startups are gone. So NetApp- They're a market-cast, 57 billion. Yeah, well, and it's their virtualization company, they're a big data company, they're many, many places now, and obviously the core is storage, but NetApp is the premier independent storage company. Does Oracle want to be in the independent storage business? I don't think so. I don't think it wants to go out and compete in EMC's wheelhouse, in three parts, wheelhouse. Rather, I think it wants to integrate. So then the question becomes, how core are NetApp technologies to what Oracle is trying to accomplish with its vertically integrated strategy? And I think a lot, a big chunk of NetApp gets hollowed out if Oracle buys NetApp. That's just my take. So I just ran some market cap numbers here just to kind of feed the beast here inside the cube on commentary. Oracle's market cap is $152 billion. SAP's market cap, 84 billion. Amazon, $114 billion. Salesforce.com, 20 billion. HP, 34 billion. EMC, 57 billion. And Workday, Private, we just talked about them going public at a 3.8 billion dollar valuation. You got Amazon knocking on the doorstep in terms of valuation against Oracle. So, you know, Oracle's big, but still, I mean, IBM, it's $240 billion valuation. IBM of that class of people is the biggest company in the room. Sure, but here's another way to look at it. So Oracle is from an operating standpoint, the most profitable software company out there of the big guys. One of the simplest ways to look at this is the valuation game is look at revenue multiples. So Oracle's trading at a valuation of $150 billion. It's about a $37 to $40 billion company. So it's got about a 4x revenue multiple. EMC's got about a 3x revenue multiple. So Oracle is able to maintain that. So Oracle, in my view, is not going to buy assets that are going to dilute its operating leverage. And in part, that's what Sun did, but they had a reason for doing that because they could integrate the hardware and the software. And that's what we're seeing here at Oracle OpenWorld. You see the red signs everywhere, John. Hardware and software engineered together. I think they're the same signs they used last year, but that really is the messaging. And we're here at Oracle OpenWorld. I'm Dave Vellante of Wikibon.org. This is theCUBE. Silicon Angle is an innovator in this space. theCUBE is this great idea that my partner and co-host John Furrier had, who I'm here with today. And John, it's great to be here with you. Yeah, so we're going to three days we'll be live here at Oracle OpenWorld. Tonight, we're going to AT&T Park to film a live remote with NetApp. We'll carry that live. We'll try to get that on the network. But SiliconAngle.com is the reference point for tech innovation. We, our goal is to extract a signal from the noise and share that with you. Provide some commentary, color analysis and talk about the business of tech, the innovation and get in the weeds and talk to the tech athletes and get the real deal on what's going on in cloud. Obviously, Oracle is going to promote it the way they want. They're a big, big gorilla, 800 pound gorilla in the room. San Francisco is pretty much closed down. 50,000 people here at Oracle OpenWorld and it's exciting. Yeah, and we're here at the QLogic booth. Shout out to QLogic. One of our key sponsors of this event. They give us this great booth space. And like John said, we got to go gorilla and it's really great that QLogic helps us do that. Fusion IO is another sponsor of ours at this event as well as EMC's BRS division as well as NetApp. And as John said, we'll be covering the NetApp event tonight and we'll be focusing on the backup and recovery aspects for Oracle. We'll also have a segment on Flash that is sponsored by Fusion IO. So thank you to our sponsors. And I just want to say about the sponsors too, about QLogic has allowed us to be in their booth. Third straight year, we knock on the door and we go in the front door of Oracle. They slam it shut. We've tried to come in and bring the cube in. They won't let us in because the space is a premium here. There's not a lot of space that's closed down but Oracle is possible. Oracle Overworld coverage by Silicon and Angular. Great independent editorial and analysis is brought to you by QLogic. So third year in a row, QLogic. Those guys are leading the OEM deals. They're kicking butt. They have great new technology and with Flash memory storage is the hottest thing. QLogic's a key part of bridging that. So go visit QLogic and thank them. Fusion IO needs no introduction. Those guys are leaders and without them leading the storm, wouldn't see the big Flash movement. They are the pioneers in Flash in solid state. So this is siliconangle.com's theCUBE. Our flagship telecast will go out to the events. Construct us soon from the noise. I'm John Furrier with Dave Vellante. We'll be right back after this short break.