Ellison up close

SAN FRANCISCO — An enterprise shift towards grid computing will empower CIOs, accelerate industry consolidation and create a standard way of managing IT infrastructure, according to Oracle chief executive Larry Ellison.


a keynote speech in which he pitched the merits of the10g database and Application server, Ellison met with a small group of international media to provide more detail about the company’s strategy. While acknowledging the challenges in getting users to change the way they operate, he said grid computing that has several servers sharing an application workload could usher in an entirely new era of governance in corporate IT departments that are now split between network, application and storage groups.

“”It’s just such a mystery to me, the way decision-making around technology devolves among so many different people,”” he told ITBusiness.ca. “”It’s like buying a telephone where you can only call the marketing department.””

Ellison said the evolution of the telephone industry was a helpful way of understanding shifts in IT. The promise of grid computing to dynamically reallocate IT resources during peak demand periods, for example, could have dramatic effects on the number of database administrators a company will need to hire.

“”We used to hear a lot about the labour shortage, and all these people we needed for these IT jobs,”” he said. “”It’s like in the telephone industry; as everyone started using them, they predicted that we would all eventually need to become operators. And in a way we did, because now we dial the phones ourselves.””

During a guest keynote earlier on Tuesday, Sun Microsystems chief executive Scott McNealy used the automotive industry as an IT metaphor. He referred to “”jalopy”” enterprise environments that have been cobbled together by all different kinds of suppliers. In the future, he said, customers will choose common reference designs that have been proven in the field.

“”You can buy a car cheaper if you buy all the parts, but the assembly, the total cost of all that, is so much higher,”” said McNealy, who said Sun would tie the telemetric capabilities of Oracle 10g with its N1 products within 12 to 18 months. “”You don’t want to be buying a carburetor, you just want a car.””

Networks built on standard components will mean CIOs focus not on technology but what kind of information is critical to the business. “”Think of the difference between the terms information technology and information management,”” he added. “”You’re doing IT, but you should be doing IM.””

Ellison echoed this philosophy in his keynote. “”We try to focus on the ‘I’ in CIO,”” he said.

Canadian customers have so far been cautious about embracing Oracle’s grid computing vision wholeheartedly, but they admitted it reflects issues that concern them.

“”Typically people will buy machines that are expandable, but it’s still more than they need,”” said Wayne Linton, a database administrator at Calgary-based Shell Canada, who is attending OracleWorld this week. Linton said Shell is still running a mix of 8i and 9i and will likely put off 10g for some time. “”That’s not to say I’m not going to get a test copy and have it running in the lab to see how it does,”” he added.

Ellison admitted that a grid computing transition won’t happen overnight. So far he said only about half of Oracle’s customers have deployed its Real Application Clusters, software that distributes the computing load of a single application over a few servers.

“”It will take years before the Oracle economy becomes the majority in the industry,”” he said. “”At least three.””

Oracle has been working towards its grid computing strategy for more than a dozen years, Ellison said. One of the company’s inspirations was IBM, which in an early version of its DB2 database for mainframes used a shared disk system called Sysplex. Oracle learned a lot from Sysplex, which Ellison described as “”terrific.””

While most of the discussions at OracleWorld this year have concentrated on 10g, many attendees have been gossiping about Oracle’s hostile takeover bid for PeopleSoft, which it reaffirmed late last week by extending its tender offer to Oct. 17. In response to an audience question following his keynote, Ellison would only say that he was optimistic the takeover would succeed. Afterwards, he said PeopleSoft customers were optimistic, too.

“”We have actually had several of their customers tell us they’re glad that we’re trying to buy them and that they really hope it goes through,”” he said. “”Customers want a company that they know is going to be around in the marketplace.””

Ellison said the coming era where computing is treated like a utility will see more well-known players disappear, including BEA Systems. Those he pegged for survival (besides Oracle) included Microsoft, IBM, Sun and Red Hat.

“”The end of that consolidation might make the industry more boring to some,”” he said. “”The madness that went on in Silicon Valley in 1999-2001 where Ariba had a higher market value than Daimler-Benz . . . we’re now going through this phase where Silicon Valley will look more like Detroit: a smaller number of substantial technology providers that will do a much better job than the fragmented period that came before.””

OracleWorld 2003 continues through Thursday.

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