Oracle’s Database of Youth: Larry Ellison, Oracle’s chief, has positioned the new version of his flagship database as a great marriage of stability and change from a company now worth more than IBM

Oracle’s Database of Youth

By QUENTIN HARDY

JUNE 10, 2014 6:00 PM 3 Comments

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Noah Berger/ReutersLawrence J. Ellison, Oracle’s co-founder and chief executive, tried to show how his company’s newest database, called Oracle 12c, would take Oracle closer to the hot trends of cloud computing and big data analysis.

Lawrence J. Ellison may have figured out a secret to seeming young: Ignore getting older, and act cutting-edge.

At least, that may be how to do it for databases.

On Tuesday Mr. Ellison, Oracle’s co-founder and chief executive, presented the newest version of Oracle’s flagship for indexing and analyzing corporate data. Versions of that product have been the centerpiece of Oracle for decades, and made it one of the world’s largest software companies.

Many of the new features were later to market than similar products from his competitors, but the whole thing was packaged in a way that made Oracle seem as if it had been waiting for the world to catch up. In particular, Mr. Ellison tried to show how his product, called Oracle 12c, would take Oracle closer to the hot trends of cloud computing and big data analysis.

“We’re constantly evolving,” said Mr. Ellison, who though about to turn 70 also appeared wrinkle free. “The technology around our database changed. Memory became cheaper, so it made sense to use more. Flash memory became a way to replace disk memory. Networks became faster.”

Utilizing them, he said, certain types of advanced analytic questions could be answered 100 times faster than before, and even conventional business analysis would be twice as fast.

It was a clever way to sell. The Oracle database is at its heart a relational database, which is useful for looking at data like orders and financial performance that make up the day-to-day running of a company.

The ties to fast analytics, with billions of data points, take that stodgy but necessary relational function into the business of forecasting, situation planning, and finding out why things happened the way they did. Big data, which often involves entirely different kinds of databases, does much the same thing.

Mr. Ellison may also be interested in lessening the appeal of new types of databases built to handle the larger and more varied types of data created in today’s mobile and online world.

All of the changes he spoke of, however — including lower prices for storing digital information, the rise of fast, solid-state storage over spinning disks, and new methods of shipping information around corporate data centers — have been going on for years, and Mr. Ellison’s competitors have already adapted.

An Oracle competitor, SAP, for example, came out with a successful in-memory product, called HANA, in 2010. “Thanks for the imitation,” Irfan Khan, the vice president for databases at SAP, wrote in response to Oracle’s announcement. He called Oracle’s methods to do relational and analytic work “a dual and complex approach.” He also indicated that HANA would do analysis more affordably than Oracle.

In fact, Oracle 12c may be an improvement over HANA in some ways. Mr. Ellison demonstrated a machine that could analyze nearly one trillion rows of data per second, and hold 32 trillion bytes of data in memory. A process that had previously taken 58 hours, he said, now needed only 13 minutes. Since costs were not disclosed, it was not clear how expensive it would be to do something like that.

Perhaps just as important as the features, however, was what the “forever young” message meant for Mr. Ellison’s customers. The core part of their businesses could remain relevant in our ever-faster future. By extension, the customers would too. That is a powerful pitch, when old incumbent companies, in and out of tech, seem under threat by new approaches.

It may be working. Oracle’s stock is up 25 percent in the past 12 months, and now has a market capitalization of $190 billion. That is more than IBM, another Oracle competitor, which has a market cap of $187 billion. IBM’s stock price has fallen 10 percent over the year, largely on investor concerns that its costs and products are not keeping up at keeping youthful.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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