Various reporters have asked me about Oracle’s third quarter 2012 earnings conference call. Specific Q&A includes:
What did Oracle do to have its earnings beat Wall Street’s estimates?
Have a bad second quarter and then set Wall Street’s expectations too low for Q3. This isn’t about strong results; it’s about modest expectations.
Can Oracle be a leader in both hardware and software?
- It’s not inconceivable.
- The observation that Oracle, IBM, and Teradata all are pushing hardware-software combinations has been intriguing ever since IBM bought Netezza. (SAP really isn’t, however; ditto Microsoft.)
- I do think Oracle may be somewhat overoptimistic as to how cooperative the Sun user base will be in buying more high-end product and in paying more in maintenance for the gear they already have.
Beyond that, please see below.
What about Oracle in the cloud?
MySQL is an important cloud supplier. But Oracle overall hasn’t demonstrated much understanding of what cloud technology and business are all about. An expensive SaaS acquisition here or there could indeed help somewhat, but it seems as if Oracle still has a very long way to go.
Other comments on the call, whose transcript is available, include:
1. I first heard Larry Ellison use the joke “They must have a better pharmacist than I do” almost 20 years ago, and his delivery was tighter then. But Mark Hurd’s follow-on shot about not having to stay up late to read HANA loss reports was pretty funny.
2. My real thoughts about Oracle vs. SAP HANA are:
- I actually agree with Larry that SAP expresses naive over-optimism about HANA as a general-purpose DBMS challenger, especially whenever it suggests any kind of time frame.
- I believe the claim that Oracle hasn’t lost much to HANA yet, if ever, but I don’t find it significant.
- SAP is still cherry-picking hard-core, committed SAP customers for its early HANA adoption.
- That’s not who would buy competitive products from Oracle.
- On the DBMS side, HANA is still an add-on, not an Oracle replacement.
- However, there’s a good chance that serious OLTP (OnLine Transaction Processing) databases will eventually wind up in RAM. Larry’s wrong to pooh-pooh that.
3. Larry also insulted Workday’s database architecture choice, while contrasting it to and praising salesforce.com’s. The only problem is — from the standpoint of what Larry was talking about, those two choices are pretty much the same.
- salesforce.com has what amounts to its own DBMS, which in essence uses Oracle as a glorified file system.
- Workday has what amounts to its own DBMS, which in essence uses MySQL — an Oracle product — as a glorified file system.
4. Larry’s comments on overall hardware revenue growth boil down to:
- Exadata, Exalogic, Exalytics, Exathis, Exathat will grow Exafast.
- High-end/differentiated Sun products will also prosper.
- Commodity Sun products will fall off.
- Pillar, which was too modestly differentiated to prosper as an independent company — and refused to pay me the consulting fees they had agreed to for confirming their understanding of that — will do better as an Oracle subsidiary.
- If total hardware growth isn’t positive, Safra Catz’s neck is on the line.
The real question is the “differentiated” Sun products. I’m pretty skeptical about those. And if they’re so great, why isn’t the Exastuff more consistently based on that technology?
Specific Oracle financial comments should probably be trusted, including:
- Exadata sales doubled year over year.
- The overall prior target of 1 billion revenue for Exaverything is right in the ballpark of what Oracle may or may not reach.