At last year’s OpenWorld Oracle CEO Larry Ellison announced support for Red Hat Linux, a move many thought would decimate Red Hat.
It didn’t. Instead Red Hat’s revenues and customer base continue to grow steadily.
This year’s big announcement at OpenWorld was Oracle VM – a virtualization platform based on the open source Xen hypervisor.
This time around, however, few believe the Oracle product will have any serious negative impact on the marketshare of VMWare, the leading player in this space.
Benchmark analyst Brent Williams noted how Red Hat has continues to grow, while Oracle’s marketshare in commercial Linux remains immaterial. “We believe the same fate awaits Oracle VM,” wrote Williams in a research note.
He said the product, which would probably add minimal revenue to Oracle’s deal size, is be “unlikely to attract significant attention from Oracle’s sales force, and so not likely to be featured in significant numbers of deals.”
Others expressed the view that Oracle VM would be most attractive where the Oracle stack is already in place.
Ellison, however, was sanguine about the prospects of Oracle VM, which he said, would ship under Oracle’s Linux offering as “a single stack of code” and run on a “virtualized environment” via a single management console.
The Oracle CEO, in his keynote Wednesday, differentiated Oracle VM from Oracle Linux. While the latter strives to be as close to Red Hat as possible, VM he claimed is “nothing like what Ret Hat delivers.”
He said Oracle VM – like its Linux offering – would be open source. “You can download both for free –and you buy support if you want to. We support 64-bit and 32-bit guests and it runs both on Linux and Windows.”
All of Oracle’s products are certified on the VM Linux stack, Ellison said.
Much like last year’s “support for Red Hat Linux” announcement – aggressive pricing is again the strategy Oracle is adopting to snag business away from the biggest current player in the this space VMWare.
Oracle VM is being made available for $999 for four CPUs per year, Ellison announced. He compared this with the VMWare standard price of $5,990 for the same configuration.
“We also run dramatically faster than the competition,” the Oracle CEO said, adding that benchmark speeds for both the Oracle and VMWare products would be published on the Oracle Web site.
He said the management console and significantly lower support costs are “biggest differentiators from what competition is offering.”
Three Fusion apps unveiled
Ellison’s other big announcement was about which Fusion apps are to be released first. Up until Tuesday, Oracle had announced the “when” of the release of Fusion apps (early 2008) but not the “which.”
The three new Fusion apps announced by Ellison are all related to salesforce automation (SFA) and are dubbed: Sales Prospector, Sales References and Sales Tools.
Ellison said they would all integrate with existing ERP and CRM systems and include prebuilt process integration packs.
He differentiated these apps from what he called “current Gen 1 salesforce automation apps” from Siebel (now a part of Oracle) and Salesforce.com.
“The Gen 1 apps help you manage opportunities – they are centred around helping sales people get better forecasts and deliver those to their managers.”
By contrast, he said, the 2nd Gen apps help you “sell more.”
He suggested that strategic lead gen is one of the ways they accomplish this.
For instance, he said, Sales Prospector would process current customer buying information and patterns from the database (which customers are buying what products) and then suggest other similar companies that you can sell to.
“For example, in the case of Oracle it may tell us that telecom customers are buying a lot of our RAC (real application clusters) products and they’re using it for VoIP, as they have high reliability and response time requirements. It will then find 11 other telecom companies with similar profiles that we may want to sell the same product to.”
The 2nd Gen SFA apps are not designed to take the place of Siebel on Demand or Sales force.com, the Oracle CEO clarified. “They co-exist with those products.”
He said the Gen 2 apps are “all about the science of selling. They provide BI for the sales person, while the Gen 1 offered BI mainly for the sales manager.” Sales Prospector, he said, is available through a software-as-a-service (SaaS) channel, has embedded BI, is built on Oracle Fusion middleware and integrates with the company’s existing ERP systems, which contain all the customer data.
The application also integrates with users existing SFA apps, he said, adding that Oracle would has an integration pack for that.
The Oracle CEO differentiated the specific functionality of the three first Fusion apps as follows:
“Essentially Sales Prospector and Sales Reference tell you to sell this product to that customer using this reference. Sales Tools says: ‘here’s a presentation floating around that you can use.’”
He said Oracle has a network of sales people that maintain these presentations and rate them. When designing Fusion apps, Ellison said Oracle talked to scores of customers to understand the functionality they would like to see in the final product.
He said their top three requests in order of priority were: integration with existing apps/infrastructure, quantifiable business benefits, and the option to the access the technology as SaaS (software as a service).
Oracle’s Fusion strategy responds to all these three customer demands, he said.