Today was a milestone day for me in my professional life. After nearly a decade of SAP, culminating in my stint with the “attack Oracle” team, I ended up at Oracle OpenWorld as their guest sitting across the table from co-president Charles Phillips. BTW, OOW is frickin huge… I thought the Sapphire events were impressive but OOW is much larger and goes for the full week.
I twittered the meeting with Phillips but in the interests of providing some context I want to reconstruct it and point out a few observations. First and foremost, Phillips is like Bill McDermott at SAP in that he is always on message, confident, and in control of himself and the environment. These are not insignificant qualities, they convey a sense of purpose that is palpable, however unlike McDermott, Phillips has a sense of distance about him.
I don’t want to take cheap shots at Phillips but I noticed a couple of things about his style. First and foremost, he is very practiced and there is not a word that comes out of his mouth that he doesn’t intend you to hear. His smart answers are definitely smart and I found myself nodding in agreement on more than one occasion, his thinking is far ahead of most of us.
When confronted by a tough question that he doesn’t want to answer, well he answers the question he wants to answer and moves on. We had more than a couple of points where we could have nailed him in a contradiction but I think we all wanted to avoid coming off as playing gotcha with him.
Lastly, there was only one point at which I felt he was talking extemporaneously and that was when I asked him about his reaction to the announcement that Cognos was getting acquired by IBM. Of course, it would have been hard to be well prepared for that given that the deal was just announced.
There were a couple of things that were clearly posturing on his part. For example, he took the opportunity when asked about third party maintenance to suggest that if you don’t own the IP you can provide end-to-end support “unless you break the law”. That flies in the face of Oracle’s own efforts to provide support for Red Hat, even though one of my Oracle friends tried to argue that open source doesn’t count. The enterprise apps that are the target of third party maintenance feature “open code” meaning the customer gets the code with the software.
Phillips also suggested that “acquired innovation” was a term he coined to describe Oracle’s model for acquiring startups and having Oracle take on the burden of the backoffice while they do what they do best. I got the sense that Phillips definition of startups is not what most people in the Valley would define as such. Personally, I think Phillips thinks of acquired innovation as acquiring maintenance and then hoping the products become more “sales scalable” through Oracle’s formable distribution capability.
After the meeting, the Irregulars discussed this “acquired innovation” topic and I don’t think anyone was buying it. To us it sounded like the same old M&A strategy with a new label.
SAP is very much in Phillips sights, he continually refers to the company and differentiates. He suggested that SAP will have it’s hands full with BOBJ and therefore not make any more acquisitions, is unable to support the development of new products in light of current product portfolio requirements, and lastly, will be unable to deal with changing economics of the software business.
Phillips echoed sentiments I heard at SAP that customers don’t want end-to-end multi-tenant hosted solutions. In fact, he argued that because Oracle offers a private database option that they are uniquely able to capture government and other accounts that are prohibited from allowing their data to be on hosted datacenters. Quite honestly, I found this hard to believe but was unwilling to argue the point absent of factual data to support my own position.
One comment that he made about subscription pricing caught my attention, he said (to paraphrase) “if you look at the numbers you will find that saas subscription models are more lucrative after 2 1/2 years than perpetual licenses”. I would like to see that data, but tend to agree with him even absent of the data.
On Oracle’s partner ecosystem Phillips stated firmly that Oracle now has more people on the “Oracle practice” than SAP, both in terms of partner companies and people. Again, can’t argue with him either way but we did have a discussion among the Irregulars and there were some concrete data points about SAP attempting to take more consulting revenue and alienating partners to the benefit of Oracle.
It was an interesting meeting and while Phillips doesn’t have the passion and conviction that Hasso Plattner has, he also doesn’t have the same job as Hasso. Phillips is impressive and I’m thankful to my hosts at Oracle for arranging the meeting. I’m heading back up there through the week, there’s lot’s of good content and interesting people to meet.
With Michael Krigsman(sitting):
That’s Karen Tillman,
Senior Director Vice President Corp Communications, in there, she worked with Jake to setup the blogger program. Karen is definitely not what I expected from someone with Oracle Marcom… no taser strapped to her hip, no brass knuckles at the ready… just a competent hard working professional.
The hardest working guy in the blogosphere… Dan Farber. I see Dan literally everywhere and it’s always a pleasure.
My press pass, I’m gonna save it.