Oracle Needs to Learn Lessons From Its Team's America's Cup Victory

By Eric Lundquist Print this article Print

I spent the early part of the week at Oracle's OpenWorld customer conference in San Francisco learning about engineered systems, the expansion of the Oracle cloud, the rebirth of Java and all things Oracle red.

The event was interesting for the opportunity to get an update on a company wrestling with a fundamental transition in enterprise technology as well as to talk with some of the 60,000 attendees making the transition.

On a much wider, wetter and wilder stage, the other piece of big Oracle news was the dramatic come-from-way-behind victory of the Oracle sailing crew in the America's Cup.

The sailing team has a few lessons for the Oracle enterprise team. Here's my take.

There is nothing like being behind to make a team focus. The Oracle team was down 8-1, with Team New Zealand only one win away from taking it all. In the enterprise vendor space, the big vendors are all championing innovation and rapid decision-making while also sitting on piles of cash—in Oracle's case, the company has about $41 billion in current assets.

When you've long had a dominant position in the market and your bank account looks like Scrooge McDuck's vault, it isn't easy to impart urgency. The products and services introduced by Oracle at its event were mostly upgrades or reactions to competitors. Larry Ellison and crew need to bring urgency into the corporate equation, and you can't do that when you don't have to worry about paying the rent.

Sometimes you need to hit the pause button. During the first week of America's Cup racing, the Oracle team called a timeout to reassess its racing strategy. In particular, the racing team had to rethink its upwind race leg where Oracle was being conservative and the New Zealand team was taking risks.

The Oracle team opted to take more risks, and what had been a runaway for New Zealand turned into close racing and thrill-a-minute finishes.

At OpenWorld, Oracle introduced its broad cloud strategy. That strategy embraces application services, infrastructure services and platform services. Customers signing up for the services will face license stacks as well as the costs associated with migrating from physical to cloud services in mixed environments where on-premises systems handle some of the load while cloud systems handle load spikes.

Oracle has said it will be competitive in pricing, but such a broad set of cloud offerings is really a new race for Oracle. Oracle has hit the pause button in announcing the services, but without announcing price and availability.

How to offer Oracle in the cloud in an attractive package competitive with the cloud leaders such as Amazon while also offering their sales team an opportunity to make money on cloud sales comparable to hardware sales requires a new tack and tactic for Oracle.

The enterprise technology space is evolving into one built on big data, mobile, cloud computing and social network information mining. The space was once the province of technologists and CIOs. But now business executives and consumers who have grown up in the smartphone world have a different set of expectations for corporate technology.

The America's Cup showed that Larry Ellison was willing to apply the money, the technology, the team building and a willingness to try something different when the race started going according to his competitor's plans instead of his desires. Now he has to do the same thing with the company he started in 1977.

Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC Week) from 1996-2008, authored this blog for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this blog. All duties are disclaimed. Lundquist works separately for a private investment firm, which may at any time invest in companies whose products are discussed in this blog and no disclosure of securities transactions will be made.


This article was originally published on 2013-09-26
Originally published on www.eweek.com.