Last week, Brian Sommer and I attended Oracle’s Cloud ERP analyst day. Sommer’s write up is here. This story centers on Catz session. First up, my thoughts.
Listening to a CEO who has been with a company for a long time always provides fascinating insights into how the company has evolved. It provides a yardstick against which you can measure your experience. For those that don’t know, Catz has been with Oracle in various executive roles since 1999 and almost never does this kind of Q&A.
As an operations person, she reserves her time for running the business and handling the financial analysts. Say what you want about Oracle, I doubt anyone would deny that the company has done incredibly well under Catz financial leadership and especially in the area of engineering acquisitions at the right price.
Having dialed into numerous financial analyst calls, I expected to hear a feisty person banging the Oracle drum and beating up on any analyst with an opinion with which she disagrees. Instead we were treated to a deferential conversation during which her admiration for co-founder Larry Ellison’s vision was apparent. When she disagreed, it was with a grace that to me, felt like a steel fist in a velvet glove. I like that because it speaks to the conviction with which she believes in Oracle’s story.
Sadly, our time was all too short – can you ever get enough time with a person of her stature? – but enjoyable.
On to what she said and her assessment of the Fusion history:
When Larry was talking in those days about, he didn’t call it the cloud, but the network and how things should actually be structured, we went on our merry way building the E-Business Suite and then we bought PeopleSoft. I know many of you got to watch this thing from the front row. I think what wasn’t really apparent but what we were talking about at that time when we came out with Fusion and our good friends at SAP called it confusion, but in fact, what we actually said was we were going to rewrite the products to make them modern.
We had to completely rewrite our Middleware to write those applications. Just so that you know how things really are done, don’t think the apps guys were so up on that plan. They knew they had to be SaaS-ready but they were like, “Let me use my old tools.” No, you have to use brand new tools.
Catz then spent a good amount of time explaining why this matters, reminding us that it doesn’t stop at deployment choice or functional fit but needs to include close attention to scale, security and performance. These may sound repetitive to old SaaS hands but Catz wanted to to ensure that Oracle doesn’t come across as playing at this thing called cloud. Turning to the hardware and software PaaS story, she said:
Building engineered systems is strategic to be able to offer a full scale cloud. Running the database at super scale is critical not only for my customers when they want these systems on-premise, but for me to be able to actually run PaaS economically. I look around and I see some of my corporate competitors in the cloud, why do they not make any money? I don’t know. Some of them have to pay me for a bunch of software or they have to pay me or somebody else for a bunch of hardware. If it’s me, at least it’s optimized for my platform. That’s one of the things. We make everything entirely optimized to run us.
She then referenced several customers who say that running on the new Oracle stack delivers performance that ranges from 108 to more than 300 times faster than the previous performance metrics. Impressive? You bet and I look forward to hearing from those customers over time. Talking to the transformational journey, Catz gave us an important insight into how Oracle thinks:
The transformation we did in 1999 where we simplified and standardized and centralized in our case our operations made everything else possible. In many ways the folks who are going to be the most successful with cloud are going to be the ones in my view who also use it as the platform for their own transformations. Larry is fond of saying we should eat our own dog food. First of all, don’t eat dog food. It’s bad for you. It’s dangerous. We eat our own cooking. That’s correct. We have to eat our own cooking. You know why? Because the entire scale of our business is to the point where I cannot meet the demands of all our customers unless I transform myself, meaning Oracle.
Commenting on what this means operationally, Catz talked about the new hires they are making in an effort to crank up the engine for millions of smaller deals. In turn that means:
In my back office, we need to be able to provide them a contract without calling 10 lawyers and negotiating it for weeks. It’s one thing to negotiate a contract for weeks when the implementation is going to take months or years, but if the implementation is going to take three weeks or in some cases you are good to go with the platform in hours or minutes, who’s going to call their lawyers?
That was refreshing and is a change we have seen at other vendors. Anyone who has gone through the grueling process of negotiating enterprise class contracts knows how painful that can be and how many landmines you can inadvertently step upon. On customers moving to cloud (or not), she said:
I think it is legitimately possible that some of them aren’t going to always want some things to stay on-premise. That’s okay. We’ve got that because our guiding light is not what we want them to do or what we think is better for them, it’s what they want to do, and so we’re going to give them the choice.
I was little taken aback at that because word on the street is that Oracle is pushing hard to get customers to move into cloud. Asked about the difficulties Oracle experienced in keeping the vision alive, even as Fusion took longer and longer to turn into reality, Catz acknowledged that many in the industry didn’t believe it is possible for Oracle to make the transformation but, she added:
Larry signed for the future very publicly 10 years ago. NetSuite is like 16 years old and Business OnLine was here when I got here 18 years ago. Why did we do it? Because we saw that chasm coming and we took a running start at it. A lot of people didn’t think this dinosaur was going to get across but they didn’t realize this dinosaur has wings.
We often see companies that struggles with transformation and I have long held the view that a near death experience is often what it takes to being about needed change. To this topic, Catz said:
The absolute hardest part is not the technology, it is because of our incredible success in the past. Now here, we took change seriously…it’s constant. If you aren’t up for constant transformation, you are not going to like it here. We are not the Post Office.
You know what really helps you want to transform, an immediate crisis. Whether you’re in health communications or you’re in banking or some of these industries, the oil companies, they just got to move fast. In our view, being in technology means you’ve got to change. If you don’t change, you will be changed from the outside in.
Talking about the competitive environment and how that is shaping up, Catz was emphatic that when oracle gets to show up then it can win:
Now that we’re on the field, seriously, we’re beating the crap out of these guys. It is sure, some of these companies are bigger in like Salesforce.com, they’re bigger so they seem to be like the automatic choice, but when we actually show up with our products, unless the decision-maker just says he’s sticking with the old product from his past company then we’ve got a great shot at winning because we can show the people who use the technology what they are going to use and it’s like ‘great.’
By the way, those who totally understand that platform matters and architecture matters? Those guys get it and, as more and more of our modules have gotten lots and lots of references, that is going to give us a continued advantage because having a strong platform and products that are integrated to work together is going to become a very obvious benefit.
And with that Safra Catz was done.
Image credit - Story image via the author, featured image via Oracle on Twitter
Disclosure - Oracle is a premier partner at time of writing. Oracle paid part of my costs for attendance at the event.