I promised last week I’d have more to say about Oracle’s quarter, but as you’ll see this blog isn’t as much about Oracle’s quarter as what’s behind it. Oracle could well be the poster child for the new age of tech, the company who can teach us what the future of both IT and networking will look like.
In the quarterly call, Larry Ellison said “Our Engineered Systems business is growing rapidly for the same fundamental reason that our Cloud Applications business is growing rapidly. In both cases, customers want us to integrate the hardware and software and make it work together, so they don’t have to. As customers shift to pre-integrated hardware and Cloud computing, in search of lower costs and more rapid implementations, Oracle is presented with new opportunities for leadership in a number of market categories.” Cost management and agility, right? We’ve heard that before, from operators explaining their hope for NFV. But what I want to focus on is that phrase “…integrate the hardware and software and make it work together….”
What is Ellison’s integrated stuff going to look like as it works together? I assert that the answer is a service, which is also why there’s a linkage between growth in Engineered Systems and Cloud Applications. The future Ellison sees, and what I think Oracle sees as its “new opportunities for leadership” is a future where integrated stuff is presented as a set of services. Services can be combined as needed for agility, hosted where optimal for managed costs. It’s a cloud future, but a cloud made up of platform services that are more like the components of modularized software than they are like hosted virtualization. The future, in short is a future of service orientation on a much larger scale, but also based on different principles than “service oriented architectures” today. It’s how this future develops that will determine the fate of Oracle, and every other company in tech today.
Service orientation is about the value of the services, not the value of the platform. That means it tends to devalue hardware and OS products unless they’re packaged into a self-sustaining system along with some useful horizontal software component. It means that you have to look at how a “service” could benefit from being hosted in an appliance versus on a resource pool—scaling and resiliency come to mind. Overall, it means you have to take a broader look at the value of what you’re offering—a look at how it fits into that service-based approach.
My fascination with management and orchestration arises from this point. Oracle’s vision is that “services” created either in the cloud or by appliances will be composed into stuff that provides productivity gains, entertainment, whatever. That’s orchestration. This process has to be as efficient as possible because the costs created by the complexity that inevitably accompanies componentization on a large scale will quickly overwhelm benefits otherwise. That makes the critical point that you have to orchestrate and manage in parallel, because the two steps are related in process and driven by that common initiative to create flexibility by componentizing.
Where this takes IT is clear, I think. We start to focus on harnessing services that are put wherever it’s cheap and convenient to host them. The cloud of the future doesn’t need explicit hybridization because it’s boundary-less. Integration/orchestration binds components into applications and experiences. Hardware and operating systems and even Oracle’s Engineered Systems are ways to create components—meaning services. You use appliances where packaging reduces operating cost and complexity and improves agility enough to offset any capital cost increase. Sometimes things like horizontal scaling will mean that separation of software features of a service from the hardware platform is good. Sometimes, particularly with DBaaS and other highly contained and focused functionality, an appliance might well be better.
How about networking? One important starting point is that if you’re going to have a service oriented future you have to think in terms of creating services from and through networks. Here we immediately come to a seeming contradiction, because Engineered Systems is a move toward custom appliances and some modern concepts like SDN and NFV are moves away from that. How is that logical?
Probably it isn’t, which is what operators have told me over the last six to ten months. They’re seeing the value of SDN and NFV being (guess what!) agility and operationalization. To me that means that it’s less important to create a bunch of virtual functions to get rid of appliances than it is to create services from networks or by melding network and IT functionality. SDN needs to be thinking not about creating the tools for defining white-box strategies for connectivity but about creating network services that are uniquely different from what we have today, and thus uniquely valuable. NFV needs to be looking not at how to turn appliances into hosted software, but at how to create network services that can be composed like software APIs.
That this might be a tough transition is illustrated by Cisco. They’re supposed to be preparing to spend a billion dollars getting into “the cloud business”. What cloud business is that? Could they be thinking UCS-centrically? If I’m right in reading Oracle’s tea leaves, IaaS could be suicidal for Cisco’s cloud aspirations, the reprise of their Flip debacle. On the other hand, if Cisco thinks WebEx, and if they play their management and orchestration angles right, and if they frame their “SDN strategy” about making network as a service into something that’s really service-oriented they could have a big win here.
Cisco could be reading the same market issues as Oracle, in which case it would make sense that HP drive an aggressive NFV strategy and make no sense that IBM seems waiting in the wings on that whole angle. The cloud is the senior partner among the tech revolutions in an opportunity sense, but NFV might be the closest thing to a blueprint for the solution to the technical problems. Yes, cloud orchestration could evolve to a higher level, but if DevOps tools can morph into orchestrating and managing the services of the future, why haven’t they made progress toward that already? That a question we all should ponder, but in particular the big IT and network vendors, because if the cloud does answer its own orchestration and management questions it will mean that everything else, including NFV and SDN, could be nothing but services for a hungry cloud. That could be Oracle’s truly big opportunity.