So has Ellison had a change of heart?

A year later, it looks that way. Oracle announced today SaaS for ISVs, a new pricing model that allows Independent Software Vendors (ISVs) to pay for its Oracle SaaS platform by the month rather than make an upfront investment.  This also allows ISVs to adjust their SaaS offerings to meet customer demand, according to Oracle.

Analyst China Martens calls this new licensing option part of the “continued gradual easing of Oracle into the SaaS arena,” according to the IDG’s Chris Kanaracus in this article.

Oracle has over 10,000 partners that are active ISVs in its partner program, said Judson Althoff, senior vice president, worldwide alliances and channels, in his video post on the Oracle site.  Althoff says that while Oracle has mostly serviced the “higher end of the SaaS market,” the new model will “allow us to reach a much broader base of ISVs, and better cater to you, the partner who wants to roll out a SaaS offering.”

Althoff also said the monthly cost structure will help the ISV “better manage cash flow” and “only pay for just the actual elements for the Oracle platform that (it) used in the previous month.”

Oracle has also begun promoting SaaS for ISVs on its SaaS Knowledge Zone and a new ISV and SaaS blog by Oracle’s Kevin O’Brien, Senior Director of ISV and SaaS Strategy for Oracle’s Worldwide Alliances and Channels organization.  According to an Oracle data sheet, the new pricing model will apply to the Oracle SaaS Platform from the Oracle Database, Oracle Fusion Middleware, Oracle Enterprise Manager and Oracle VM.

Oracle isn’t the only vendor to have made recent on-demand developments. SAP recently released its latest SaaS strategy, which includes on-demand applications for Business Suite customers that use a multi-tenant architecture rather than an isolated tenant model.

Where do you think Oracle stands in the SaaS market? Will this latest SaaS for ISVs offer help Oracle? Or, as some are saying, despite the new pricing model, is Oracle software just too expensive in the first place?

It looks like they were right.

Just over a month after buying the virtualization software vendor Virtual Iron, Oracle has announced that it will be getting rid of the company’s products.  According to an article in The Register, Oracle said in a letter to Virtual Iron’s sales partners that it “will suspend development of existing Virtual Iron products and will suspend delivery of orders to new customers.”

While this may not come as a surprise to many, it’s interesting that Oracle has decided to forgo what keeping Virtual Iron could have brought to the table in terms of products for small and medium-sized companies.

Also interesting, as The Register’s Carl Metz points out, is that Oracle would risk losing Virtual Iron customers and partners, who will be justifiably unhappy upon hearing this news.  Oracle stated that after the end of this month it will not allow partners to sell new licenses to anyone, even existing customers.

Do you think it’s unfair to Virtual Iron customers and irresponsible for Oracle to slash VI’s  products with such short notice? While Virtual Iron customers can move to Oracle’s new combined product, Oracle has yet to say when it will be arriving, or what the combined product will actually be.

And is this any indication of what Oracle will do with Sun’s virtualization products? With its acquisition of Sun, Oracle will get Sun’s entire virtualization portfolio namely Sun xVM.  Sun xVM, like Oracle (and Virtual Iron), is based on the Xen hypervisor, making it easier for Oracle to combine products.

It should be interesting to see how Oracle’s virtualization plans develop over the coming months, and if it will prove effective in competing against virtualization kingpin, VMware.

I am only half kidding, of course, about the good news part. For better or worse (worse many users say) Oracle doesn’t fret much over whether it should license servers by the processor core or by the box. It unflinchingly continues to license by the number of cores, which could prove an expensive proposition for some buyers.

The bad news I may not be kidding about so much. With Sun kicking its five-year old Rock project to the curb, Oracle can’t make the next leap in the game of performance leapfrog it plays with chip rivals IBM and Intel.

In fact, Sun has failed to leap a couple of times having canceled its UltraSparc-V chip project earlier this decade because it essentially ran out of development funds. The company rushed out its UltraSparc-IV chip as a stop-gap product that didn’t do much. And when Sun was skipping a leap, a couple of other times it was very slow to leap, being months even years late in delivering a new chip.

Sun officials have talked consistently the past few years about the Rock being a game changer. The chip was designed to achieve a much higher per-thread and floating point performance, along with greater Symmetrical Multi-Processing capabilities than its Niagra family of chips.

Rock, which was to anchor the company’s Supernova line of servers, was supposed to really shine when it came to handling high-end data facing workloads including database servers. Just guessing here, but I think a machine delivering great database performance would be important to Oracle.

With Rock out of the game Sun will continue to use Fujitsu processors, which will be fine, but hardly represents the game changer the company was hoping for. One positive aspect to all this is that Sun’s research and development costs just got significantly lower. This won’t make Larry Ellison unhappy as he tries to complete the $7.4 billion acquisition of Sun.

But once again Sun has opened the door wide open for a number of competitors to rush through, most notably IBM. With one less competitor at the high end, IBM figures to rip away more server market share from Sun over the short term. Some speculated over the last day or so that Oracle might start to emphasize the next gen Niagra III Sparc chips, as well as pushing Solaris on x64 servers fueled by Intel’s upcoming Nehalem EX servers.

Sun has been relying on chips from Fujitsu for its larger servers while it waited for the Rock development to be finished. Now it is likely to just continue using Fujitsu chips, which should lower research and development costs.

But what does the lack of a “game-changing” chip like Rock do to Oracle’s plans to sell vertically integrated hardware-software stacks (as has been rumored) ala its Exadata Database Machine? It could hurt its newly acquired hardware business for sure, but perhaps more importantly hold back its flagship database business at the high end in some key markets, along with other proprietary and open source software offerings.

We knew Oracle was buying some damaged goods with its acquisition of Sun, but I am not sure if Redwood Shores was assuming its chip business might be this damaged.

Ed Scannell

Oracle’s continued lack of public enthusiasm, let’s call it, about gaining possession over MySQL Server continues to puzzle me.

The folks at Redwood Shores certainly haven’t indicated they will abandon the popular open-source data base, but neither have they acknowledged what the strategic importance to its overall data base fortunes might be.

I know Oracle can’t offer up too many specifics about its plans for MySQL until its acquisition of Sun is complete (the latest speculation is that approval may not come now until at least September over some concerns expressed by the European Union). But it could do a better job of making a general statement or two about its potential value, which might go a long way towards making its customers using Oracle and MySQL databases side by side feel more assured.

The company shouldn’t wait too much longer to do that.

A couple of weeks ago, Monty Widenius, MySQL’s founder who left Sun before the Oracle deal, has formed an independent vendor-neutral consortium that will serve as a hub to create and maintain code and binaries, as well as offer training and technical support for MySQL.

The fledgling organization, called the Open Database Alliance, will supply a range of software and services for Widenius’ fork of the MySQL MariaDB version of the product. The group will not wait for Oracle’s endorsement or formal participation.

At the announcement of the Alliance Widenius expressed more than a little concern that MySQL’s development efforts could be set back years if Oracle either lets the product languish without regular updates, or lays off many of the product’s programmers at Sun once the deal is completed.

Widenius pledged to work closely with those MySQL developers at Sun, to prevent a significant forking of the code which would fracture an otherwise united development community. This, of course, could result in diluting the product’s competitive powers against Microsoft, or make it less attractive to Oracle shops as a departmental-level compliment to its higher-end databases.

Not just that. Some of Oracle’s database competitors could join the new consortium and make technical contributions to MySQL. It is hard to imagine that Oracle would be comfortable with that scenario having just paid over $7 billion for Sun.

Widenius also made it clear his new organization is quite open to any company or individuals joining in the group. Given there are only the two founding members who have joined - namely Monty Program Ab and Percona - new members are likely to have more than a little influence in the product’s direction.

I have already written about MySQL’s more obvious advantages to Oracle’s data base business: a strong lower-end compliment to Oracle’s proprietary line of data bases that could effectively compete against Microsoft; another source of maintenance revenues; and a way for Oracle to take a leadership position in the open source world and improve its credibility there.

No matter what Oracle’s longer range plans are for MySQL, the company would be wise to throw The Open Database Alliance a bone soon, letting it know it intends to work cooperatively. It would be good for not only MySQL users and developers, but for its own strategic good.

But when will we actually see these proposed changes take place?

We’ll be one step closer to knowing the answer to that question next month, when Sun stockholders will meet to vote on Oracle’s proposed acquisition.  Sun announced today that this meeting will take place on July 16. If it goes through, the approval will mark the end of more than seven months of negotiations between Sun and interested buyers such as Oracle, IBM and HP, according to eWeek.

Oracle first announced its agreement to acquire Sun on April 20. Until now, the software giant has remained tight-lipped on the deal, with only a brief mention of it at the Collaborate ‘09 conference in May.

But now, even with the recent announcements at JavaOne, many questions remained unanswered about the future of Sun, especially surrounding what exactly Oracle plans to do with Sun’s hardware business.

An article today in ComputerWorld suggests that Sun customers remain skeptical about Oracle’s plans for Sun and the assurances made by Ellison at the JavaOne conference.

The Sun customers interviewed in the ComputerWorld article were concerned about the future of a variety of Sun’s technologies, including Java, its Sparc architecture and its free GlassFish open-source application server.

Others were nervous not just about the technologies, but the future of the JavaOne conference itself. One attendee was quoted as saying that the conference had “the look and feel of being the end of the road for JavaOne… It was hard not to get a sense that this was the last one.”

In a recent blog post, JavaWorld’s Dustin Marx also speculates that Oracle will not continue to hold the annual conference.  First, he points out that in the current economy, it may not be feasible for Oracle to hold both Oracle OpenWorld and JavaOne and still make money. Marx also points out that Oracle already has many Java-related presentations at its Oracle OpenWorld conference, and simply expanding those offerings would not be too difficult.

We’ve already looked at how the Oracle-Sun deal will affect you, but as the approval of the proposed acquisition gets closer, new questions are beginning to emerge, on everything from Oracle licensing to the future of Java and JavaOne.

As more details of the Oracle-Sun deal start to surface, what new questions or concerns do you have?  As an Oracle customer what do you think about what the Sun customers have to say? Are their concerns justified? Leave a comment or talk about this in our Oracle-Sun discussion on the IT Knowledge Exchange.

Hint: don’t be too quick to pick IBM. It seems that when it comes to picking a vendor or consultant, IT professionals believe larger more global companies such as IBM or Oracle aren’t always the preferred choice.

According to a VendorRate Trade Show report from Collaborate ‘09 in Orlando last month, Solution Beacon was the highest rated vendor of the approximately 200 attending the show.  The lowest rated vendor was Business Objects, with Oracle Consulting, Deloitte Consulting, Microsoft, BMC Software, ADP, Symantec Enterprise Storage and Verizon Wireless rounding out the bottom, according to the report.

VendorRate collected responses at Collaborate from nearly 400 IT professionals, who rated the vendors on a scale of 1 to 10 in 10 categories, including communication, timeliness, usability, reliability and customer service.

Three of the lowest rated vendors provide global consulting services. In a BusinessWire article, VendorRate CEO Rick Schaefer is quoted as saying, “Small and medium sized vendors continually score at the top of the charts while the big consulting organizations receive the lowest scores.”

Joining Solution Beacon at the top was Feith Systems & Software, Quest Software, Sun Microsystems Server, Oracle Software, Dell, HP and TUSC.

Here are a few of the highest and lowest scorers in specific categories, according to the report:

Best in Expertise: Solution Beacon and Sun Microsystems

Best in Communication: TUSC

Best in Recommend: Feist Systems and Software

Lowest in Recommend: ADP

Lowest in Timeliness: BusinessObjects

Lowest in Reliability: Microsoft

What do you think of these results?  Do they surprise you?

Then today’s your lucky day.

A new version of Oracle Warehouse Management, released June 1, allows users to deploy the warehouse management application as a distributed product.  Users no longer have to be an E-Business Suite customer to use the application, as was required in earlier versions.

Oracle Warehouse Management can now either stand alone or be deployed as a module within E-Business Suite, giving customers the choice between an integrated or standalone product, according to Oracle’s Warehouse Management blog.

And that’s not its only enhancement — Oracle Warehouse Management will also be integrated more closely with Oracle’s transportation management application. According to Managing Automation, Oracle recently announced that Oracle Warehouse Management and Oracle Transportation Management have new integration points — such as load sequencing and cross docking — that indicate a plan to offer the applications together as a best-of-breed logistics management suite.

Other new capabilities with this release include advanced wave planning, task planning, demand-driven forward pick replenishment and high-volume performance, according to Oracle.

What’s behind all these changes?

Oracle Warehouse Management was originally built for industrial manufacturing and high-tech sectors. However, the product has evolved to have more appeal for higher volume environments such as wholesale distributors, food and beverage, life sciences and consumer packaged goods, according to Jennifer Sherman, Oracle senior director of logistics product strategy, in this Logistics Management article.

Moving forward, it will be interesting to see how new features such as these allow Oracle to compete with best-of- breed warehouse management systems.  If you’re an E-Business Suite user (or a non-EBS user who can now use the application), how will these extended capabilities help you?

Oracle has always had the right to call for a review (with very little notice, I might add) to verify that users have not downloaded more copies than their contract calls for. But the Sun acquisition, coupled with the crushing effect the economy has had on Oracle’s revenue growth, the likelihood of reviews and audits has risen considerably.

As Jeff Greenwald, Acresso Software’s Senior Director of Product Management for Enterprise Licensing Optimization told us last week:

“This (Oracle-Sun) merger could spark other conversations with a shop that may or may not have Sun boxes running in them, but Oracle won’t know that when they start the conversation. Oracle could treat this as an opportunity to investigate a shop’s hardware base and without realizing it, users enter into an audit.”

It has been his experience, Greenwald said, that most users have no best practices guidelines or software in place to track deployments. In fact, many use only a spreadsheet to track their compliance, which is a bit scary. The drawbacks to this relatively primitive method are it is time consuming, prone to errors and its results are often out of date even before the exercise is completed.

Naturally, Greenwald believes his lineup of license management software offers a better alternative, but he does have a cogent case. Not only does Acresso’s products present an automated way to collect instances of Oracle software and store them it a central location, they also provide users with reports that “interpret” those deployments comparing them to their contract.

“It is about (Acresso’s) technology but it is also about services that can help customers come to a decision by recommending what the best course of action is when they renegotiate a new contract with Oracle,” Greenwald told us.

Greenwald believes there is a basic set of license management best practices that can be applied to a range of different “events” that trigger reviews and audits. Events can be many things including not just mergers and acquisitions but divestitures, re-organizations, expansions, facility closings, or layoffs.

The following rules can better prepare an IT shop for such reviews, he believes.

Pro-active, consistent monitoring of Oracle deployments.  IT shops should monitor Oracle deployments continuously instead of waiting until a review or audit deadline approaches. This is the most sensible way to avoid a crazed fire drill under tight time constraints.

Collect complete, granular information. Oracle deployments and licensing both can be complex, involving multiple instances on multiple platforms. Consequently, IT organizations should make sure their visibility into their Oracle deployments is complete and granular, including discovery of all processors and all named users.

Use of automation. IT organizations can reduce strain on their staffs as well as improve the accuracy of their information through automation. That automation however should be scheduled to avoid being a drag on performance of critical business services. It is a good idea to implement agentless automation to avoid management complexity.

Clear reporting against actual license structure. Once IT shops have a granular accounting of their Oracle deployments, they need to understand how those deployments compare to their actual current license entitlements. That understanding can come through reports highlighting where the deployment exceeds the license and where there is “shelfware” i.e. software that is not in use.

Fully leveraging of deployment insights across all IT and business functions. Once an IT organization can maintain pro-active insight into their Oracle deployments, it must then deliver that insight across an organization.  These organizations, besides developing the ability to monitor their deployments, will want to take advantage of experts in disciplines such as negotiation, budget allocation and planning.

In an e-mail interview with Reuters, Oracle CEO Larry Ellison made it clear he intends to keep not just Sun’s chip and server products but its disk storage and tape backup businesses too. So with one short interview Ellison has confirmed he will attempt to significantly change the competitive landscape among major vendors competing for the billions of enterprise dollars at stake.

And he is not lacking for confidence about his chances. In the Reuters interview Ellison said he has the in-house talent — both from among Sun and Oracle engineers - to compete successfully against the likes of hardware giants including IBM, Hewlett Packard and Dell.

“We have lots of hardware experience inside of Oracle. Hundreds of Oracle’s engineers came from systems companies like IBM and HP. Even I started my Silicon Valley career working for a hardware company that worked with Fujitsu to design and build the first IBM compatible mainframe,” Ellison said in the Reuters interview.

I am not sure how much of Larry’s own hardware experience will successfully translate to competing against The Big Three in a cutthroat low margin business. I suspect it will have more to do with retaining key Sun engineers and their managers working on key hardware technologies. But you have to like his optimism here.

It could very well be that Oracle has no intention of engaging in hand-to-hand combat with his major competitors in the low end, Intel-based server market. According to his comments in the Reuters interview, he intends to invest heavily in Sun’s Sparc- and Solaris-based servers where margins would be significantly higher.

“Once we own Sun we’re going to increase the investment in SPARC. We think designing our own chips is very, very important. Right now, SPARC chips do some things better than Intel chips and vice-versa. While most hardware businesses are low-margin, companies like Apple and Cisco enjoy very high-margins because they do a good job of designing their hardware and software to work together. If a company designs both hardware and software, it can build much better systems than if they only design the software,” Ellison said.

Yup, that’s right. Apple is a model, if not the inspiration, for Ellison believing he can deliver high margins servers if he can form fit Oracle’s software with Sun’s chips and servers ala Apple’s iPhone and iPod.

There may be at least a little concrete evidence to back up his ambitions. Oracle’s Exadata database machine, which tightly couples Oracle’s flagship database with HP’s server hardware, has received good reviews, particularly for its speed and performance.  It must be noted however, that the Exadata server uses Intel chips, and not RISC-based chips such as Sun’s SPARC processor.

Both Ellison, in the Reuters interview, and Oracle President Charles Phillips at last week’s Collaborate conference, said Exadata was the most successful product launch in the company’s 30-plus-year history. Oracle, of course, declines to release sales figures for the system, so there can be no iron-clad confirmation of this.

But if Oracle successfully applies its Exadata model to other server hardware-software combinations, perhaps targeting each offering at a specific vertical market, it may not only succeed in the market but also lay down the law for how server bundles will be sold.

There are a couple of unanswered questions remaining, of course. One, is if Oracle proceeds with its plans to sell SPARC-based servers bundled with its software, where does this leave HP?  HP still competes with Sun in some segments of the server market, and may not take too kindly to Ellison’s aggressive commitment to SPARC.

Second, how will Ellison deliver bundled combinations of servers to Oracle and Sun customers?  If he intends to focus on complete solutions using only Oracle-Sun chips, servers, operating systems, databases, middleware, and tools, the emphasis would seem to be on largely selling  these systems direct.  If he does an end run around the resellers, will this drive the channel into the arms of IBM, HP, and Dell that can reach customers across a greater number of markets?

We may not get these questions answered for another few months. But I’ll say this, with the Sun acquisition Larry has brought back some of the fun and excitement that has been missing from this market for some time now.

Collaborate ‘09 speaker Jeffrey Hare, CPA, CIA, CSA from ERP Seminars, addressed some of these risks Tuesday in his session, “Top 10 Application Security Risks and Related Best Practices for companies running Oracle E-Business Suite.”

The majority of these application risks described by Hare are internal - so, even if you’re not putting your data out on the internet, you’re certainly not free from unwanted users accessing your systems.

What did Hare list as his the top 10 risks for E-Business Suite users, and what did he recommend for dealing with them?

10. Upgrade risk: To avoid upgrade risks, Hare said end user security should be designed from scratch, using completely custom menus and sub menus. He also advised against using AZN menus.

9. Risk analysis: Hare said it’s important to look at risk analysis holistically, from outside the system to access and processes inside the system. He recommended choosing a risk analysis firm that specialized in E-Business Suite, and to make sure to take into account material risks as well as sub-material risks.

8. Relying on auditors: Be aware that many auditors do not take into account risks of sub-material fraud and often fail to look at the business process holistically. He recommended starting with Procure- to -Play, hire a firm that specializes in fraud risk to do a risk assessment beyond SOX and review their conflict matrix before hiring them.

7. Security changes- Change management process: The change management process is not something you can afford to get wrong, Hare said. It should be very specific and include menus, responsibilities, roles, request groups, functions and profile options.  All security changes should go through a change management process.

6. SQL Forms: All activity in SQL forms should go through the change management process just like an UPDATE SQL statement would, including peer review and code freeze, Hare said. All activity should be audited via trigger or log-based technology.

5. High risk fraud forms: Hare said to be aware of forms subject to high fraud risk such as banks, remit to address, locations and suppliers. Define a procedure for changes and additions such as a form and procedure for new suppliers.

4. Password hacking: Hackers can get into production applications and database accounts via a published exploit code. Hare recommended reading the white paper Oracle applications 11i: Password decryption for solutions.

3. Override of workflow policy: It’s important to have a process in place regarding delegation of authority for processes such as worklist access and vacation rules, Hare said. Figure out the allowable delegation of authority within your company, and audit and trace back your changes.

2. Support personnel access: Lack of inquiry only access and non-production support instance is a problem within organizations, Hare said. He recommends using SysAdmin Views, identify high risk single functions and SOD issues and to take the same precautions with security analysts as with end users.

1. Utilities: diagnostics: Hare stressed that no one should have access to these profile options in the production environment - they should be left off the production environment and go through the change management process.

What risks and/or best practices could you add to this list? If you’re an E-Business Suite or other application user, what has or hasn’t worked in terms of security and what do you think is worth your time and investment?