Ellison: Why we shut down Oracle Canada’s data centre

SAN FRANCISCO — Oracle‘s chief executive singled out the company’s Canadian operation this week as an example of the challenges in consolidating its worldwide IT databases into one.

In his keynote address to the estimated 25,000

IT professionals at this year’s OpenWorld conference, Larry Ellison urged customers to pare down what are in some cases hundreds of databases spread out across an organization and create what he called a “”single global instance.”” This means all finance, administration and IT would be managed centrally, and would allow companies to cull all their customer or product information from a “”data hub”” based on Oracle’s 11i.10 E-Business Suite and running on its 10g database. This is something Oracle recently completed, he said, following a five-year effort that involved major cultural as well as technical obstacles. Many of Oracle’s regional staff didn’t want to give up control over their local IT operations, he said.

“”I asked our Canadian general manager, ‘Do you think it’s your job to run a data centre to run Canadian financials or payroll or e-mail?’ The answer we wanted to hear was that they’re not in IT,”” he said. “”We want them to understand our products and how to use our products to solve customer problems . . . I don’t want the general manager of Oracle Canada worried about payroll. Don’t worry your pretty little head about it.””

In a discussion with select international media following his speech, Ellison said Oracle’s data centre consolidation project stands to save the firm billions of dollars each year.

“”It’s doubled our profit margins,”” he said. “”It’s just a more efficient way to run a business . . . computers were the enabler for organizational change.””

Ellison touted the data hub strategy the same day Oracle rolled out a content management system, Files 10g, an update to its Collaboration Suite and Release 2 of its 10g database. Oracle executives said customers would be able to use the content management and middleware products to get their unstructured data under control. Then, if they move to a single database and create a data hub, they can pull real-time information on sales, HR and administration that’s more accurate than that which is extracted from a data warehouse on a weekly or monthly basis. The increased consolidation on the database in turn would help Oracle sell 10g, which offers grid computing capabilities that allow IT managers to load balance and share the work among pools of servers.

Although Oracle highlighted a few customers — including Chicago Stock Exchange and MainStay Partners — who have successfully bought into its vision, the message didn’t completely resonate with everyone at OpenWorld. Francois Dumont, manager of the DBA group at Loto-Quebec, said his organization has between 20 and 25 databases that have been on Oracle 9i since April of 2003, and although he’s thinking about moving to 10g he said he’s not about to consolidate them anytime soon.

“”The idea of having only one database to do data warehousing and LDP, I’m not really happy about that,”” he said. “”We have 400 users on our data warehouse. Most of them aren’t IT people. They don’t know all the SQL scripts, they make requests, it’s not efficient. But if OLTP (online transaction processing) and the data warehouse on one (database), it’s very dangerous.””

Dumont said Loto-Quebec may consider stringing two or three servers together, which Oracle calls Real Application Clusters (RACs), when it begins selling lottery tickets online. Although his team has been given the technical go-ahead to get that project going, nothing will happen until at least after Christmas, when a proof-of-concept will be demonstrated. “”If you’re selling the lottery and it’s $30 million, and if (your database) stops one hour before the end of sales, you lose a lot of money,”” he said.

Loto-Quebec has to pull information from its data warehouse to prepare a report for its president every Monday, Dumont added. This spring he said the firm will try to speed that up by creating something similar to an Oracle data hub that will extract some information every 30 seconds.

Ellison said consolidation and grid computing would mean the difference between a feudal company and a global company.

“”If you’ve got the managing director of Canada who does everything — he buys the furniture, he sets up the e-mail system, the networks — that is just stunningly inefficient,”” he said.

One customer in the keynote audience asked how his investments in PeopleSoft’s application software would be protected, and Ellison promised Oracle would both finish PeopleSoft 9 and provide better support than PeopleSoft will. A U.S. judge may decide soon whether to kill off a poison pill that could block Oracle’s takeover of its rival. Later, Ellison suggested a recent vote in which more than 60 per cent of shareholders approved the deal should speak volumes.

“”A poison pill is supposed to give a board of directors time to negotiate a deal,”” he said. “”It’s not supposed to be an absolute eradication of shareholders’ ability to sell their company if they want to.””

OpenWorld 2004 wrapped up Thursday.

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