 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. Okay, welcome back, everyone. We are live here in San Francisco for Oracle OpenWorld 2016. I'm John Furrier, co-CEO of SiliconANGLE Media. With Peter Burris, my co-host for the past three days who's the head of research for SiliconANGLE Media is also the general manager of Wikibon Research. Peter, we're wrapping up the show. We just did 35 interviews over the past three days. theCUBE has come for the seventh consecutive year of Oracle OpenWorld, landed and has multiplied its content. We got a lot of confetti out there, a lot of videos. But more importantly, we sat down with some of the top executives and leaders of Oracle. We sat down with some real thought leaders in the industry, venture capitalists. To really extract out kind of what the story is here. And I think, let's discuss that, let's summarize and extract the signal from the show, which is, Oracle's march to the cloud. How real is Oracle? How real is their cloud story? How real is the impact of their customers? And let's compare that to the competition. What's your thoughts? Well, I think after years of speculating what Oracle was going to do in the cloud, we now have an answer. It's going to be really Oracle in the cloud. Now for folks who want more Oracle, they now have a real cloud option. There's a lot of companies out there that are going to want more of that, who have built their enterprise around Oracle's core applications. Are interested in bringing in some of these new applications around CX, around marketing cloud, or some of these other approaches to doing new types of business. This is a great, it's going to be a great and very compelling option to them. And they now have a path forward. But there are going to be a lot of companies that still step back and maybe never made that huge investment in Oracle, except at the database level, the way that some of their brethren have. And Oracle is going to have a challenge, along with everybody else, at demonstrating that you should jump into Oracle's cloud versus anybody else's. I think, I mean, so much to talk about. I mean, I think there's so many dots to connect. You said yesterday that, you know, Oracle is in as great position in a lot of these accounts. And this morning, we were with Dave Donatelli, who is really leading the charge for Oracle as a company, in terms of transforming their business model. If you look at what Donatelli's done and the enterprise converge infrastructure, bringing in the power with John Fowler and the Sun folks, quietly taking the engineered systems and bolting it in. Now they've got the infrastructure service hardened for Oracle. So you have their install base is not going anywhere. And this option for future pricing, future scenarios, really comes down to this omni product, omni path, selection or journey. It's not a linear path anymore. And if they can lock in their Oracle install base and layer innovation on top of it, they could become a mainframe. Oh, well. They could be like, suck everything in. Well, look, in many respects they are. And I don't necessarily mean that. I don't think we mean that in a pejorative way. But the whole concept that Oracle's bringing to the marketplace is this notion of engineered solutions, engineered systems, engineered cloud, engineered services, engineered everything. Oracle is saying, we will make many of the engineering decisions that you, this is our way of doing things because we think that you won't want to have to do this stuff. And for, again, for a big piece of the world that has bought in Oracle applications, that's the right story. For developers that don't want to muck around in the bowels of a lot of things, that's going to be the right story. Oracle's going to express their applications as services. That's going to be very, very attractive to a large class of developers. Oracle's being very aggressive about being their partners and ISVs forward with them. And historically just look at things from a database perspective. And Oracle's giving them their options. So for a company that wants to default to the Oracle engineered way, great story. Now what Oracle needs to do is prove to the marketplace that they should adopt the Oracle engineered way. And that's where a lot of the tension and a lot of the competition's going to be over the next few years. But Donna Telly was implying that if you have Dell Technologies, anything or HP, or any other non-Oracle, you're playing with a bad hand. No, you're playing catch up. And then if you go to the cloud, you're going to have investment that's not going to be worth anything. Basically what he was saying. Well, what he said is if you're an Oracle customer at the database and at the application level, and you want to run a non-Oracle stuff in the cloud, you're going to be at a disadvantage. And again, because he's bringing the whole silicon to application approach. It makes a lot of sense. So back to the database, right? So the question is, will there be more Oracle displacement of new vendors, new solutions to Oracle stuff? If that's the case, then everyone can, multi-vendor continues. If people keep their Oracle database and they continue to inch along and take territory down with their suites, then they become more locked in with Oracle. So then that proposition certainly plays in the chess game for Oracle. I don't think that people are going to be getting rid of Oracle database. I think that the notion of systems of record, engagement data, cognitive machine learning, and then some sort of new front end beyond that is the way it goes. And that's just layers of how innovation works in industry cycle. So a database is a system of record, some sort. So I think the database will still be the crown jewel. And to me, I think the competitive advantage for Oracle is the database. So how Amazon would respond to that would be interesting. Do they package stuff differently to try to compete with the packaging of Oracle? Or not? Or do they keep it the way they got it? Well, and I think that it's going to be interesting to see over the next few years as, let's sit back, John. Let's say that Oracle is successful at convincing the marketplace that this notion of an engineered approach to the cloud where you have different options for hardware. You can, as Donna Telly talked about, he talked about the cloud on the customer. Not private cloud, but cloud business model at the customer's location with Oracle having a seamless experience across public in that customer's setting. If Oracle's successful at convincing the marketplace that the engineered approach, this notion of integrated innovation in the cloud is the right way to go, that means that there's going to be a whole bunch of acquisitions going on. There's going to be all kinds of new partnerships. Oracle's thrown down the gauntlet and we're going to see whether our customers and the rest of the cloud providers, Google, Microsoft, and Amazon being the most obvious, how they respond to it. If you bring the developer equation in, which we heard from today from Oracle, it's interesting because as we were saying, we didn't say it's on camera because we were in between segments, but we were talking about, oh, it should be invisible. And you pointed out, no, it should be visible and invisible, so I think. But visible when the developer needs it to be visible. This is, to me, the table stakes for DevOps. I need to see what's available and when to push the button, so to speak, virtually cataloging, if you will. Speed, baby, speed. It's a services mindset, SOA kind of thing. I need to have visibility into what's there and working. But invisible to the developer in terms of the hassle factor configuration, so the automation where the things like Kubernetes becomes automated away. So that is wide open for Oracle. They are so not there right now. They're just now putting containers out there. They're just now talking about it. And they don't want to get there, I don't think, because as we heard, they don't want the fails that are going on in this innovation because with Kubernetes and orchestration, there's a lot of iteration, which means sometimes shit breaks. So they don't want shit that breaks. So my point is, okay, Kubernetes and orchestration, they're going to let that play out until it's stable and then lock it in. Right, and so, look, Reinvent just became a really interesting show to attend and I know we're going to be there. Excited because Amazon has been kind of in a position of driving the market's definition of cloud. They've done it very successfully and they offer very, very good product for the class of customer that they're serving. Oracle has now shown another way. There's another lighthouse out there. And it's going to be interesting to see how, it's in the developer world and in the business communities how Amazon responds to that other lighthouse. This conversation is so great but the thing I want to end the segment on is lock-in. Lock-in actually is a good thing and bad thing, depends on how you look at it. In business school, they teach you competitive strategies about having some lock-in. And lock-in has always been a proprietary thing. Like, hey, we have proprietary code, we protect it, we fortify it, we pretend and hopefully that wins the day. But you can't really have proprietary lock-in in an open source world. Oracle has the lock-in speck of all time. It's called the database, right? So like, as much as they call Amazon the lock-in, which Larry Ellison did, no offense Larry, but dude, you've got the biggest lock-in on the planet. It's called the database and they know that. But they can't really lock that in because now we're in an open source world where data has to be freely available. So if I'm Oracle, I got to start thinking differently around the lock-in speck of the database by letting the open source database world develop. We heard Juan Loezo say they're going to take JSON and put that right into the database. So I see the engineers, you know, tinkering away. I see some, some smoke, haven't seen the clear signs yet. But it's almost like they're beavering away and behind closed doors to try to solve this problem. Your thoughts and observations. I think it's a great observation, John. So Oracle's got a lot of smart people and they've got a lot of cash and they've got a lot of customers and they've got a lot of intellectual property. That sounds like a formula for success. But they have just signed up for a lot of work over the next few years because this notion of an engineered approach to the cloud is making a major commitment and if it falters, people are going to pounce on it. Now, when you come to this notion of lock-in, Oracle does not want to be a source. They don't want to be take data out of our system and move it somewhere else. They also want to be a sync. We talk about new development happening on other platforms. Oracle also wants to make sure that it captures a lot of that new data capabilities. But I think you're absolutely right. The real chance or the real characteristics of lock-in, it's going to be a multi-cloud world. Oracle's cloud, Amazon's cloud, Microsoft's cloud, Google's cloud, they're all going to be in place. It's not the fate at heart because it's huge money, huge talent requirement and a lot of invention, a lot of computer science on the horizon. So we love to use war analogies. It's a full-out war, in my opinion, with the four biggies. Amazon, Microsoft, Google and Oracle. In terms of pure, we're going all in with cloud. So in order to have that, you've got the best talent. So let's talk about the talent. I mean, what do we see? And when we, Oracle has a nice facade of messaging to Wall Street, Mark Hurd, Safford Cats. I mean, they've got this thing orchestrated beautifully. They don't go off the script, cloud, cloud, cloud. But on theCUBE here, we get Juan Loez, Amit Zavri, Dianna Donatelli, sharing. They got some strong people. Come on, no question. And those strong people are what attracts other strong people. So we saw some newbies to Oracle, that people who've just joined up in the last few months in supply chain, in the basic cloud platform. So Oracle's got, Oracle is going to continue to attract that talent. And that's exciting. And they're going to present that talent out to the marketplace more than they have in the past, precisely because they do want to bring in more of that talent. But to come back to your point, the first battle, the first battle is for the definition of the ground rules. And right now what Oracle's trying to do is they're trying to seize the definition of cloud away from Amazon. That's fundamentally what they're trying to do. Now, again, as of right now, there are no losers. All four of these companies are going to succeed because we're talking about a situation where we heard data where 5%- Well, I mean, what is Oracle doing, really? Come on. I mean, not Oracle, I mean Google. What is Google doing in terms of winning? Well, I mean- Well, okay. And we'll hear where Dianne Greene's got some things to say about that. But look, here's the reality. We've heard data this week. 5% of the workload is in the cloud. 95% is on the table. And we're not even talking about the new growth that's on the horizon. Because this is only going to get more important. We are presuming that the current position, which is a minuscule element, minuscule in the grand scheme of where this is going to end up, that this position dictates what's going to happen in the future. We're going to have four clouds, at least. We're going to have customers, companies who are not regarded as cloud companies or technologies today. They're going to introduce their own customer clouds. That's going to have an enormous impact in what happens. We're going to see a redefinition of whole industries as a consequence of this. So, super early. Super early. So, is Oracle late to the game, yes or no? No. Absolutely not. We're talking about- This is going to be a 10-year journey. Oracle's put a stake in the ground and says the engineered cloud is- Yeah, I would agree. Anyone who says Oracle's late to the game is an idiot, in my mind. And we know who those people are out there in the press that say that. But they're looking at the wrong cloud game, to your point. If they define Amazon as cloud. I mean, Google really doesn't have a cloud in the enterprise area except for themselves. They obviously run Gmail, so they had expertise. Oh, they got some companies that are adopting it, but you're absolutely right. Google has to decide, are they going to be an enterprise player? Because that's more than just making Gmail, Docs, and other things available. And very importantly, John, we talked about this in the first session, is the battle really between Amazon and Oracle and Google and Microsoft? Or is the battle between Oracle and Microsoft, Oracle and Amazon, that whole, that basic definition of what constitutes an enterprise cloud player is being redefined as we speak. And that's what's going to be the dominant, that's going to be the dominant story for the next year. And to put an exclamation point on that, that highlights what you just said highlights the biggest story from the show. And that is Oracle is surrounded by multiple competitive fronts. Traditionally, they were fighting battles against SAP and IBM and HP. And when Larry Ellison and they aren't really competitors, they actually still are, but in a smaller scale relative to the high ground. The high ground in this business, in the computer industry for the next 20 to 30 years is the cloud. And they have identified Amazon web services and Microsoft as the competitors in that high ground. And Google's got to apply for it. But right now, Amazon web services owns the high ground. Do you agree? Owns the definition of the high ground, but... As the ground's getting higher. But what, but again, at the end of the day, at the end of the day, there is this enormous mass of applications that are waiting to move. And that is not available to Amazon. So as the plates shift and the tectonic plates push up this new mount, the high ground is a current position, but at risk. So then with that context, AWS identified it by Oracle as the leader and pioneer, Larry Ellison's direct words in cloud. Oracle playing catch up, so to speak, in the top of the second inning or spring training, whatever. So it's different early. And Microsoft already quietly moving their customers over. So I would give those guys the top three. Oracle, I mean, I don't see much from, I mean, from Google, I don't see much from Google. Hi, Google's not to get serious. Google's gonna have to get serious. Okay, final thoughts, overall, bye for the show. Any other commentary you'd like to share? More coherent than I thought it was gonna be. Less direct appeal to developers than I thought we were gonna see. Almost a subdued atmosphere, though, on the floor. As people grok what this really means. My big takeaway is that Oracle still is the old Oracle. I haven't seen the shift from the Ivory Tower. It's still control the messaging. And at some point, as Vishal Sikha pointed out in the keynote before Ellison yesterday, the whole world's going to be different. So I'm looking for proof points for Oracle. And I haven't seen it as much this year as I had hoped for themselves being transformed as a company. Well, you know, John, we made a comment yesterday that in many respects, Larry's going back to the old playbook. What was the old Oracle playbook? The sweet. Openness. Database. Sweet. Exactly. So. Performance, look at our charts, look at their charts, look at our numbers, look at their numbers. That's the old Oracle playbook. We don't want it to fall off the wagon. He rolled it back out. Yeah, he fell off the wagon, the cloud wagon. So on that piece. But that's what I'm looking for. And when they start recognizing the new way, the company itself has to change. Look at, the cube is here, right? They have all the press. The messaging just sounds so hollow at the top. Like it's like the scene, we're the cloud, we're up by 77%. 77% of the numbers are not that big. So using percentages, not real numbers. That's a head fake. So I think the world's kind of like getting it like, hey, stop head faking us. So to me, I think the company's going to change a little bit in that area. Certainly the Wall Street might not be as sophisticated. They'll maybe fall for the numbers. But people who squint through those numbers will see, 77%, it's a good number, but in context to the growth, base. Well, look, 70, look, they're smaller in Amazon. 70% is good. It's better than five. It's better than five. Which is their on-premise business. The other number we heard was somewhere in the vicinity of four billion is associated with crowd. We'll see. But look, your basic point is, New World, are you going to have a new compact with your customers and a new engagement? We're seeing evidence that, yes, Oracle's moving in that direction, but this is going to be a lot of work. I mean, we're nitpicking now, but ultimately the big question is, is it a viable investment? So if you're an investor or you're on a bank or on Wall Street, you look at it and say, does this company have what it takes? And I would say, this company is galvanized around a mission. They are delivering the products and services down the road. They have what it takes with the people, you mentioned it. They have cash, they have talent, they have customers. I think it's a viable investment. I don't see Oracle losing much in the future battles. I see them winning a big, big piece of the pie on cloud. I think Oracle has defined the Oracle way for the cloud, and I think they're going to have to do a phenomenal job of marketing and making that real, but there is a sizable piece of the market that needs them to succeed, and that's namely all those customers, all those companies out there that their business is fundamentally based on the Oracle applications. And my final takeaway is Oracle isn't as far along as I had hoped, given the hype of the narrative from the corporate ivory tower, but that's not a bad thing. I think they're doing all the legwork, they're building the data centers. And Larry Ellison's point on stage yesterday was a good one. The stuff that they do is really hard, right? So you got to give them that. He's absolutely right for the folks who oversimplify the cloud. It is hard shit that they're doing. So I'm giving them a huge break on that. It's the top of the second inning. They're right where they need to be. I think they're in pole position to onboard their install base, so don't judge them by too hard. I mean, they're good. They're in a good spot. I think they're in a good spot. And I agree with you. I mean, the biggest decisions about what to do in the cloud, we're talking about 5% penetration. The big decisions about what to do with the cloud if you're a CIO, haven't happened yet. Peter's been great job this week. Thanks to the crew and everyone else watching at home and doing the live blogging, tweeting away, Jeff Frick and the team. You watching the team? We're going to be at re-invent. So we're going to be having the Amazon store. We're going to hear with Andy Jassy and his team say at Amazon re-invent. Obviously, I'm getting texts since yesterday on the headline on SiliconANGLE, the lock-in baby. I recall on Amazon a lock-in. This is setting up for quite the fun show for re-invent, totally agree with you. Go to SiliconANGLE.tv to find out where we're going to be next. SiliconANGLE.com for all the coverage. Check out Wikibon.com for all the latest research and sign up for the premium subscription. If you're interested, it's theCUBE signing out from Oracle Open World 2016 live in San Francisco. This is theCUBE. I'm John Furrier with Peter Burris. Thanks for watching.