#CounterpunchWithSVG is now seven exchanges old and has been read more than 20,000 times from over 100 countries. I have had the pleasure of hosting some big names from the world of technology who have braved not only some straightforward and challenging questions but also taken a punch or two (figuratively, of course).
That’s what this platform stands for – sharp, honest and unfiltered conversations. And our readers have genuinely appreciated this style and candor. After all, these readers are CxOs who don’t have the time to read scripted answers that mask the truth. There’s enough glossy marketing content out there that does a great job at that! Instead, these CxOs need a platform that cuts through this clutter and answers some of the pressing questions nobody dares to ask. And that’s how #CounterpunchWithSVG came into being. During a rather animated debate with the global head of IBM Cloud, I wondered how amazing it would be if this conversation were in a more open setting. After all, I represent the voice of the CxOs who are spending top dollar with technology vendors and don’t always get the outcomes they sign up for!
In this 8th exchange (E08) of #CounterpunchWithSVG, I host Chris Chelliah, SVP, Customer Strategy & Business Development, Oracle APJ. As someone who has spent two decades with Oracle and works closely with clients daily, Chris is well placed to offer perspective on the company’s recent investments and the change in client expectations. In this exchange, I quiz Chris about Oracle’s investments in Cloud, efforts to promote SaaS, and the company’s readiness to be relevant in a multi-cloud, hybrid-cloud era.
P.S.: For the uninitiated, #CounterpunchWithSVG is an executive dialogue series by Greyhound Research. As the name goes, this series is about sharp, honest, and unfiltered conversations. The format is simple. SVG throws punches at his opponent (asks tough questions that most wouldn’t) and gives his opponent an equal opportunity to counterpunch. In a world full of marketing hype, we at Greyhound Research believe #CounterpunchWithSVG makes an insightful read. We bet you will share our sentiment once you’ve read this exchange!
SVG: Chris, thanks very much for agreeing to participate in #CounterpunchWithSVG. Truly appreciate it. First, let’s talk about Oracle and its current posture towards Cloud Computing. The company has come a long way in embracing Cloud and only recently announced Dedicated Region Gen 2 Cloud@Customer to cater to the Hybrid Cloud needs of end-user organizations. In fact, in a recent survey that we at Greyhound Research conducted, over 42% of organizations (large, global orgs) confirmed their plans to move workloads back from Public Cloud to either an on-premise environment or a third-party Private Cloud. How do you see this sentiment play out with your customers here in APJ, and do you think they will bite the Dedicated Region Gen 2 Cloud@Customer bullet? Additionally, can you offer guidance on which key verticals, customer types, and workloads will be the first to move? Also, fair to assume that most of these will be existing Oracle customers of its Public Cloud offerings?
Chris: Oracle is at an exciting inflection point. With a second-generation cloud, we provide a marriage of the best cloud infrastructure, leading data platform, together with the most pervasive cloud applications. No one else, realistically, can do this. Our entry into cloud infrastructure came with an advantage that we could learn from others and build a cloud that truly matches businesses’ needs.
For instance, we knew we would live in a world with lots of regions – so we fully automated and optimized the process, so they could be rolled out quickly and easily – in a way that others can’t. This means we’ve already been able to provide more than 25 cloud regions in less than four years, and we have an aggressive plan to add another 11 Cloud Regions by July 2021, bringing the total to 36.
We recognized that even with this rapid expansion, not every country would have a cloud region, leaving many businesses (still bound by data residency restrictions) unserved. So with Oracle Cloud Infrastructure, we created a base platform from which we could build – and in different sizes, meaning we don’t have to design it from scratch each time. You select the right size. And then, you deploy the same cloud technology that you would for a cloud region and give it to individual customers.
This lets us offer Cloud in new formats, such as Oracle Dedicated Region Cloud@Customer – the industry’s first fully managed cloud region that brings all of Oracle’s second-generation cloud services, including Autonomous Database and cloud applications, to the customer’s datacenter. This lets enterprises get the same set of modern cloud services, APIs, leading SLAs, high price-performance, and highest levels of security that they would in the Oracle public cloud.
This will let banks, telcos, stock exchanges, governments, manufacturers, and other large organizations move some of their most mission-critical on-premise computing workloads to the Public Cloud. We already have the Nomura Research Institute from Japan as one of our first customers worldwide. Here in Japan and the Asia Pacific, we have some of the world’s largest and fastest-growing corporations across all of these sectors and more. You will likely see a number of them follow suit. And when it comes to moving workloads, honestly, the Oracle customers are looking for easy, cost-effective, and performant ways to migrate to and utilize the Cloud.
We already see a strong interest in our expanded partnership with VMware. The Oracle Cloud VMware Solution is an excellent example of how we help support customers’ hybrid cloud strategies.
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It lets them easily migrate VMware vSphere workloads to Oracle Cloud Infrastructure and take advantage of consistent infrastructure and operations and other Oracle Cloud services, such as Oracle Autonomous Database because their workloads are now adjacent. This means they can start to modernize applications or bring in the Cloud as a disaster recovery (DR) option, or burst to the Cloud at peak times. They can seamlessly move workloads between on-premises environments and Oracle Cloud.
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SVG: Before we move any further, let’s talk about some numbers. While the numbers in the latest annual report may not necessarily come across as handsome and Oracle has posted way better numbers in the past, a closer look talks at length about the change that is happening rather quietly in the background. Of course, the investments in autonomous DB and support for the hybrid Cloud are the most noteworthy of these changes. Please highlight the fundamental changes in technology and business to swing the company back into a growth phase. More specifically, how are these changes being implemented here in APJ, and what can end-user customers and partners expect?
Chris: We have a healthy balance in our business. In JAPAC, we have dual-cloud regions in India, Japan, Australia, and Korea, the latest addition being in Hyderabad. This lets us address concerns related to data sovereignty and DR. We are also strengthening our position in hybrid cloud space, as per our recent partnership with VMware, and giving customers strong multi-cloud options. These come via our interconnect with Microsoft in Tokyo and cloud adjacency model with Equinix. Customers can move their Oracle Databases onto an Oracle Exadata platform in an Equinix data center, next to generic public cloud services.
In Japan and the Asia Pacific, Oracle Autonomous Database remains a key growth driver. More and more businesses embrace it to leverage more in-depth data-driven insights faster and much more efficiently. And we’ve expanded our addressable market for this critical product by introducing it on Exadata Cloud@Customer, which lets our on-premise customers leverage its benefits too.
SVG: Since we are talking numbers, can you talk about the COVID-19 pandemic impact on Oracle’s business here in the APJ region? Despite this being the hockey stick moment for Digital and Technology, end-user organizations are being somewhat cautious. Hence, this means slower deal conversions, more aggressive asks in terms of outcomes, and better deals. Have you noted these and other changes from the end-user clients? Like your peers, has this period also impacted your cashflows? What are some of the key countries, verticals, and segments you expect will help come back the earliest and make up for the current revenue loss?
Chris: Our overall business has been doing remarkably well. We believe the pandemic has focused customers more clearly on the need for modern technology, which is uniquely at the core of Oracle’s offering. For instance, our second-generation, autonomous, serverless, elastic cloud infrastructure delivers better performance and higher security at a much lower cost than they can get elsewhere on the Cloud.
While we have seen industries that we serve, such as hospitality, retail, and transportation hard-hit, we have helped them shift to adapt supply chains and adapt to changed behaviors like home working and delivery. Conversely, we have been involved with helping some customers’ businesses soar, like Zoom and 8×8.
SVG: Like yourself, your key competition – IBM, Google Cloud, AWS, Alibaba, and others – have all announced aggressive investments in local regions to support customers. While this is great for customers with a lot to choose from, this also adds tremendous pressure on cost structures since more competition – and all vying for the same segment of customers – naturally means a hit on overall pricing structures. This is particularly relevant in IaaS, where nearly all cloud providers have a parallel offering. Can you share more about how you expect competition amongst equals to impact your business here in APJ? Fair to expect aggressive deals being offered on IaaS to get customers started with the engagement and build out to SaaS and other areas after that?
Chris: Oracle Cloud Infrastructure is like no other. Our second-generation Cloud is autonomous. Being autonomous, it generates new types of value for customers. It brings lower costs and better management because it doesn’t require any human labor; better security because there’s no human intervention; everything happens automatically. And there’s higher-performance because the database and the operating system and the entire database are autonomous.
So, no, not all cloud providers have parallel offerings. We do recognize that it can be challenging for customers to compare, especially on pricing. So with the Oracle Cloud Workload Cost Estimator, organizations can finally assess the comparative costs of Oracle Cloud versus AWS in as close to a real apples-to-apples comparison as possible.
On top of this, customers recognize that they can migrate existing and even highly customized and packaged workloads simply and quickly with OCI, and then use a complete suite of modern cloud development tools to extend these or build new, cloud-native applications. They can bring-in modules from our SaaS suite to easily replace outdated solutions or add-in new capabilities. They can also harness new and powerful data analytics leveraging artificial intelligence and machine learning, through tools like the world’s only autonomous, fully self-driving, self-securing, and self-repairing database, to get unbelievable insight.
Customers can also live in a multi-cloud world, through Oracle Cloud’s interoperability partnerships with Microsoft and VMWare.
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SVG: Amongst many things, Oracle expects its SaaS portfolio to be one of its key differentiators against AWS. This is a logical and fair assumption since CIOs and business leaders are spending considerably more resources and time making SaaS decisions. However, these decision-makers are also increasingly concerned about vendor lock-ins and looking to reduce risk by using the best of breed apps that can be relatively easy to integrate using APIs. While this may not be a challenge for highly vested customers in Oracle products, how do you think this mindset will impact sales to customers with a relatively small base (or none) of Oracle products?
Chris: Oracle Cloud is a platform that interoperates with other cloud platforms. Its openness and interoperability are key functionalities. Additionally, Oracle Cloud Applications have been known to deliver a simple user experience. SMBs are an essential constituent of our business.
Sure, Oracle is known traditionally as a technology provider to large firms – we continue to support them, but we’ve also developed solutions with the midsize customer in mind.
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As these growing firms evolve into digital, cloud-based organizations, it becomes the core for them to have a reliable platform for their applications – one that allows them to seamlessly connect content a many of our customers across SaaS and on-premise. Here’s a SaaS checklist many of our customers have used to help them select a cloud service provider.
Let’s talk about clients, what do they want from Cloud? They want:
1/ Simplicity: the ability to do tasks easily
2/ Mobility: the ability to do tasks on any device
3/ Extensibility: designed for a better visual appeal and framework
The user experience we bring to customers is great: we’ve built it to be smart, consistent across devices, easy to use, contemporary-looking, mobile, and able to evolve. You don’t have to adapt to the software. It will adapt to you and what you’re doing.
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SVG: One of the things Oracle talks about a lot is its effort to integrate internally, for example, a combination of Autonomous DB with Oracle Analytics cloud and packaging that with FusionApps. This will be a tremendous value proposition for customers struggling with existing ERP silos and similar issues. What else can be expected in this trajectory of integration?
Chris: Customers need quick time to value from their investments, especially now. That means it is incumbent on us to take out the hassle of putting the piece parts together or integrating different offerings.
Oracle’s approach has long been to engineer different elements of our product portfolio to work together. We’ve extended that to embed new emerging technologies into the tools that people use daily to gain rapid benefits. This includes building blockchain into supply chains, digital assistants into our CX cloud services, embedding analytics, machine learning, and artificial intelligence into our Apps. This allows users to analyze data and get unprecedented insight from their organization to make smarter predictions and better decisions.
In terms of our roadmap, we have already launched Oracle Analytics for Fusion ERP and Oracle Analytics for Cloud HCM too to deliver this combined offering, with Oracle Fusion SCM Analytics and Oracle Fusion CX Analytics coming.
SVG: Next, I would like to have your view on the Exadata range of products being deployed on-premises. Until now, it’s typically been a favorite for Financial Services and Telecommunications players who have been invested in the Oracle database for decades and find the hardware rather fitting in their environment. Plus, of course, Oracle’s turnkey approach to offering Exadata has meant that these customers can feel at ease when opting for Exadata products. But to carry on this momentum is a tall ask, especially in the current times. How should end-user organizations think differently about Exadata? Are there specific use-cases and verticals where you believe Exadata can add significant value?
Chris: In today’s competitive world, data is everywhere, but you need to turn it into actionable information to make decisions. Customers can do this better, faster, more securely, and with less cost using Oracle Exadata. Oracle Exadata is exclusively co-engineered with Oracle Database so users can realize up to 5X more performance, 4X greater efficiency, 73% less downtime, and better security and management capabilities with Exadata than with other solutions.
Companies in data-intensive industries have recognized the benefit, and we have customers from across the financial services, insurance, manufacturing, media, consumer goods, engineering and construction, utilities, retail.
Oracle Exadata can now deliver the same unmatched capabilities wherever used, be it on-premises, in Oracle Cloud, or as Exadata Cloud at Customer. With Exadata, customers can move workloads seamlessly between these different deployment models with no application changes. It is 100% compatible, ensuring a smooth transition to the Cloud and an efficient hybrid cloud strategy. With pay-as-you-grow dedicated Exadata configurations and infrastructure managed by Oracle experts, Exadata Cloud Service enables business agility and operational flexibility with zero CapEx. This product and these optional deployment models are unmatched in the industry. No one else can provide customers such important choices.
This is allowing businesses to involve it with some newer types of use cases. Exadata can accelerate IoT workflows ingesting 100s of millions of IoT data points/ second, enabling users to run data-intensive IoT analytics in less time. Another key use case we see is it being utilized to consolidate edge computing with easy-to-manage solutions that cut WAN costs by 50 percent and improve user experience by 2X. There are a number of customer examples we can share, including:
Panasonic (Japan)
1/ Reduced hardware and maintenance costs by consolidating 38 pluggable databases for the sales management systems of 16 group companies into a private cloud for Panasonic Group with Oracle Database 12c, Oracle Multitenant, and Oracle Exadata Database Machine.
2/ Cut operating workload by 15x and increased development efficiency by reducing resource requirements for each system from 5 DBAs managing 8 systems to 7 DBAs managing 170 systems through database integration and enhanced service level agreement.
3/ Supported growth for all group companies by improving sales management system performance by up to 6.7x and minimizing frequent outages due to low CPU capacity, insufficient memory, or other resource issues.
Ewha Women’s University (South Korea)
1/ Provided campus services to students up to 40% faster and enhanced user experience to accelerate query performance – for example processing 20,000 queries made per second in just 1 minute instead of 3 minutes.
2/ Anticipated cutting total cost of ownership, including hardware and server maintenance costs, by approximately 25% (US$265,000) over 3 years by consolidating 9 disparate databases and 2 legacy Oracle’s SPARC servers onto Oracle Exadata, enabling the university to reduce database cores by 50% – just 36 cores rather than 76.
Wumart Stores (China)
1/ Reduced IT operating costs – such as power consumption and data center floor space by more than US$100,000 annually, and simplified IT maintenance by consolidating 92% of IBM legacy servers and four Oracle Databases for SAP applications onto a single Oracle Exadata Database Machine.
2/ Processed online customer orders 8x faster and minimized revenue loss from clearance sales due to declining fresh food quality and expensive low-temperature storage costs by improving SAP application response time by 82% and processing online transactional processing workloads rapidly.
3/ Lowered logistics costs by enabling the company to gain a holistic view of the online supply chain model and modify the process to ensure order accuracy and on-time customer delivery.
SVG: On similar lines, let’s talk about a real-life client situation. Every client (especially here in APJ) has a mix of dated processes, traditional monolithic apps, some SaaS apps, some IaaS from a large public cloud provider, and a team still in the process re-skilling. Typically, these clients have teams trained from a provider like AWS and find it extremely difficult to work with a new Cloud provider cause the effort to sign a new contract and train existing resources is a steep one. Do you think there are enough reasons for such customers to consider Oracle Cloud?
Chris: Our customer momentum shows that there are plenty enough reasons for customers to consider Oracle Cloud, whether it is for cloud infrastructure with the likes of Zoom, 8×8, NRI for our dedicated regions, the Otaru University of Commerce in Japan, Nissan, Law Society in Australia, Indian Oil Corporation for Autonomous Database, or NEC in Japan, Unilever, SRL Diagnostics, New Zealand’s Inland Revenue Authority for our SaaS apps.
Oracle has the fastest Cloud and the lowest-cost Cloud, and when customers try it, that’s what they find out as they compare our second-generation infrastructure with other cloud solution providers.
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We have customers like Verizon who tried out other clouds and then tried Oracle and found that Oracle could do a lot more for a lot less money than they could get done elsewhere.
Here in the Asia Pacific, we have a whole raft of recent adopters of Oracle Cloud Infrastructure using our new cloud regions: Hindalco, Indian Oil Corporation, and Star Health Insurance in India, NRI, Nissan, Riken, and the Otaru University of Commerce in Japan, the Law Society in Australia, Medicom in South Korea, as well as City Bank in Bangladesh, and Shaukat Khanum Memorial Hospital in Pakistan.
And we are making that as easy as possible for customers to try it out. Look at our new autonomous JSON database. Not only is it the first database of its kind, but users can come and test it without any commitment using our free tier.
Again, Oracle Cloud infrastructure is the world’s only second-generation autonomous Cloud; autonomy is the defining technology that separates our Gen 2 Cloud from Amazon’s, Microsoft’s, and Google’s generation 1 cloud. On top of that, the lion’s share of our database installed base will want to maximize their existing skills and investment with Oracle Cloud.
Do you think a customer will ignore the benefits they receive by migrating enterprise workloads to Oracle Cloud vs. AWS if benefits are like:
1/ 30-50 percent lower service costs
2/ 55-100 percent better price/ performance
3/ Up to 70 percent less effort to migrate
4/ 30-40 percent lower operational costs
SVG: AWS recently made a public comment on moving completely off Oracle’s database by 2020. Now, that’s not something Larry or anyone else in the Oracle ecosystem ever thought was possible. Of course, this has also impacted customer sentiment who are now increasingly looking to use more open-source based database options. Please throw some light on this topic.
Chris: The Oracle Database continues to be the #1 database globally, and the Oracle Autonomous Database is the world’s only autonomous database – no one else has anything comparable. It is a multimodel converged database with machine learning-based automation for full lifecycle management. That means when you configure the system, you don’t do anything. The system configures itself, secures itself, and repairs itself. This set of distinctive features add up to a substantial advantage in ease of use and time-to-value. Customers can reduce operational costs by up to 90 percent.
There are significant synergies for customers also using our cloud applications on Oracle’s Cloud Infrastructure. For example, it means they can quickly and easily build out data warehouses associated with those applications in minutes and link to our cloud analytics. Once built, the user can perform all of their data analysis as you would expect from any fully formed data warehouse and analytics tool.
Organizations recognize these benefits. So we now have the likes of AS ONE and Propre Japan, Hansol PNS and DB Hitek in Korea, AU Small Finance Bank and Sharda University in India, Regional Development Bank in Sri Lanka, Kerry Logistics, Hehegu and Pagoda in China, AsiaPay in Hong Kong, and Johor Ports and JNE in ASEAN using Oracle Autonomous Database.
In fact, with the growing popularity of Oracle Autonomous Database and constant feedback received from our customers, we recently launched Autonomous JSON Database – a new cloud service for developers who are looking for an easy to use, cost-effective JSON database with simple NoSQL API’s. Autonomous JSON Database provides all the core capabilities and high performance, simple elasticity, full ACID support, and complete SQL functionality.
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SVG: Another critical change that is brewing at end-user clients’ end is moving towards a more engineering-led technology team that is far more hands-on than earlier times. This change is seen mostly with traditional organizations responding to startups. This is particularly true here in APJ, where we are seeing startups being funded across Australia, Singapore, Vietnam, China, and India. This change is significant since it deems cloud providers like Oracle to lead with an engineering approach and not necessarily follow the traditional sales model led by pre-sales. Can you share how you are changing your team mix to adjust for this significant change?
Chris: Generally, we are seeing that IT once again is being asked to do more with less. There is also an accelerated pace of change, an increased focus on short term delivery cycles, and as well as having a short time to value projects must deliver high ROI.
For many, that means having projects that can be stood up quickly, and that is why Cloud is so welcomed, and why our autonomous offerings are gaining such momentum. They take the effort out so customers can focus on the business. It’s also why we expect to see a lot of interest in our VMware offering too – you can get an environment set up in hours – 2 hours, 42 minutes to be exact, and then you can start seamlessly moving workloads between on-premises and the Cloud as if they were one.
I would say that at Oracle we are seeing a demand for true enterprise-class cloud services that help solve real-world business problems. This is what our Cloud is about – offering a complete and open cloud that gives a choice.
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Customers have the option to choose from the largest portfolio of cloud apps in the industry, across ERP, HCM, and CX and from a wide range of industry-specific options. They can opt to use cloud infrastructure to migrate their existing apps, extend them, and build cloud-native new ones. They can choose applications with emerging technologies built-in or use our suite of developer tools to build themselves.
SVG: One of the critical success factors of Cloud is the ability to take partners in the journey. While Oracle has a solid partner base, can you give us a sense of how you are building momentum for cloud-native developers who shy away from enterprise tech vendors like yourself? Also, with the decision to launch autonomous services, starting with autonomous OS/database, there’s a growing sense in the partner community that you are automating many services provided by partners. Of course, this means a certain base of partners will either need to go up the value chain or look at alternative products. How are you helping partners currently facing this dilemma?
Chris: Partners account for around 80 percent of all Oracle transactions in one way or another, especially in the Asia Pacific. This shows the contribution of partners in Oracle’s growth. As more and more businesses move from on-premise to cloud, partners realize the opportunity in the cloud domain. We continuously engage with our partners, enabling and equipping them to tap these opportunities. We continue to be intensely focused on skilling/re-skilling our partners, encouraging them to achieve more specializations, and winning more business with Oracle.
Understanding our partners’ fast-changing needs, we had also launched a modernized Oracle PartnerNetwork 2020 program last year. It is a customer-focused, cloud-first modern partner program that accelerates Cloud’s transition, driving superior customer experience and business outcomes. By selecting the appropriate track(s), our partners can choose how they want to engage with Oracle: fully invest in the cloud space, focus efforts in the on-premise license and hardware space, or extend into a hybrid model.
SVG: Last but not least, how do you expect the remainder of 2020 to pan out for Oracle in APJ? Can you highlight critical changes that end-user clients can expect from Oracle in 2020 and beyond?
Chris: If 2020 has taught us anything, it is to expect the unexpected. So what our customers can expect is for us to keep providing them with the most powerful solutions that help transform their businesses and their day in and day out lives, helping them make things a bit easier.
Oracle will continue to be a company that brings innovation to our customers that will help inspire them to do amazing things. That is our plan, and the whole business is fully aligned behind that.
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SVG: Chris, thanks again for your time. This has truly been a wonderful conversation.
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