On the Scene: Oracle OpenWorld 2007

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Even amid the late-year flurry of trade shows, user conferences, and product launches, Oracle OpenWorld has grown to a monstrous size -- 43,000 attendees piled into San Francisco's Moscone Center and snarled city traffic, much to the chagrin of the locals twittering (and Twittering) about their displeasure. Oracle President Charles Phillips' keynote made clear the theme of nostalgia that ran through this year's event, which marked the 30th anniversary of the founding of the firm that would one day become Oracle. Phillips also struck the "innovation" note early and often: "Our history of innovation is something that really speaks to the essence of what this company has become," he told the crowd, before coining a phrase to embody Oracle's company-purchasing frenzy over the last four years: "Acquired Innovation." Phillips broke down Oracle's operations into what he called its three major businesses:
  • Databases: Phillips reiterated Oracle's stranglehold on the database marketplace, noting not just that Oracle had 47 percent of the market, but that its share was more than the next two closest competitors combined.
  • Middleware: Oracle's a "Leader" in more than a dozen of Gartner's Magic Quadrant assessments of various middleware components. (Notably, Phillips made no mention of Oracle's as-yet-unsuccessful attempt to acquire middleware competitor BEA Systems.)
  • Applications: The next stage for Oracle is "to go beyond just ERP and CRM," Phillips said. "Now we're adding many more capabilities going beyond that...with applications specific to [industries]. That's a new change in our strategy."
Oracle's innovations go beyond the software itself, Phillips said. "We also innovate with our business model," he said. "'Innovation' is not just products, but it's also how you go to market, how you bring more capabilities to the customer. Given where we are at this point in history in our industry, acquisitions make a lot more sense." Phillips took special note of the 41 acquisitions Oracle has made in the last 45 months: "Companies are a lot more proven [and have] a lot more customers, the products are seasoned -- and they're actually cheaper [in the post-dot-com-bust era]. So we decided to start bringing innovation to market, supplementing our internal development -- which is about $2 billion a year -- with acquired research and development," he said. "Given who we are, and our size, and this well-known strategy now that includes acquisitions, anyone remotely thinking about selling their company is going to come to us with their enterprise software business. Given the state of the financial markets and the traditional IPO market, we've become
the IPO market for the enterprise software industry." Oracle, though, remains a discerning shopper when it comes to doing deals, Phillips said: "For every one we do, there's another hundred that we don't do." His address coincided almost in real time with IBM's announced acquisition of business intelligence (BI) vendor Cognos, effectively closing out the wave of top-tier BI consolidation that began in early 2007 with Oracle's deal for Hyperion Solutions. Other big-ticket items launched or introduced at OpenWorld included Oracle Application Integration Architecture 2.0; Fusion Middleware (which Phillips characterized as "being in beta now"); Enterprise Manager 11g (another beta-stage element); My Oracle Support; Oracle VM (a tool targeting the much-buzzed-about trend toward virtualization); and the unveiling of the first three Fusion Applications -- all three of which (Sales Prospector, Sales References, Sales Tools) are for the sales force, and are loaded with Web 2.0 technology. While many of these announcements sparked a buzz on the floor, James Kobielus, principal analyst for data management at Current Analysis, says he's unmoved. "Oracle primarily offered a grab bag of incremental announcements related to strategies and product releases that had already [been] pre-announced earlier in the year," he said, in a written note.
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