AWS Further Eases Database Migration Away From Oracle

Executive Summary

  • How AWS’s new heterogeneous migration targets Oracle.
  • Understanding how AWS’s Managed Services reduces a company’s reliance on Oracle support.

Introduction

Oracle has based its database business around lock-in. As I have covered in previous articles, there is an immense opportunity to reduce costs by migrating away from Oracle databases to databases like PostgreSQL or MariaDB or others. However, something that is required is a managed DB. There is no point in migrating away from Oracle DBAs if something else cannot take its place.

Well, something did.

AWS’s Managed Services

AWS came up with the managed DB through its managed services, which manages overall infrastructure, databases being one component of this. This AWS has had for a while. However, migration has been performed by consulting firms with expertise in AWS. But recently AWS has “greased the skids” for companies with the desire to migrate databases to AWS, and also to migrate away from the database to different databases. Let us see the following quotation from the AWS website.

“The service supports homogenous migrations such as Oracle to Oracle, and also heterogeneous migrations between different database platforms, such as Oracle to Amazon Aurora or Microsoft SQL Server to MySQL. You can also use AWS DMS to stream data to Amazon Redshift, Amazon DynamoDB, and Amazon S3 from any of the supported sources, including Aurora, PostgreSQL, MySQL, MariaDB, Oracle, SAP ASE, SQL Server, and MongoDB. In addition, you can use AWS DMS for continuous data replication with high availability.” – AWS Website

“Options” But a Target on Oracle’s Back

AWS presents this as a bunch of “options” but there is one database vendor that is burning a hole in company’s pockets with its expense and overhead and this database is Oracle.

In this quotation, it explains the details of how this is accomplished.

“With this launch, AWS DMS enables customers to use the same mechanic that the database uses for commit sequencing, which is the log sequence number (LSN). The launch also opens more integration use cases. For example, now you can use Oracle Data Pump or SQL Server BCP to do the initial data load into a target database and then use the DMS log sequence numbers to start change data capture (CDC). With the checkpoint feature.. you can replicate changes once a day from the last checkpoint.” – AWS Website

This conversion setup can be seen in the following screenshot from AWS.

Notice the options under the migration type. 

Conclusion

Companies can avail themselves of this new capability to migrate away from Oracle. Of course, many companies have customizations in Oracle, stored procedure, etc, that reduce the ability to migrate. However, for those databases that can, (other databases can be migrated by moving the stored procedures out of the database and into the application layer) it enables one to migrate to an open source database, which in the vast majority of cases can handle the workload just fine, and with AWS’s Managed Services, it means that Oracle support can be dropped. This can be a boon to companies. It takes what amounts to what is widely considered to be close to no value, and puts back in the company’s pocket to spend on things that do add value.

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

AWS / GCS Question Box

  • Have Questions About Using AWS for SAP & Oracle?

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References

https://aws.amazon.com/blogs/database/aws-dms-now-supports-native-cdc-support/https://aws.amazon.com/managed-services/faqs/

The Risk Estimation Book

 

Software RiskRethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

Larry Ellison on SAP and Salesforce Paying Oracle for DB Licenses

Executive Summary

  • Larry Ellison enjoyed observing how SAP, Salesforce and Workday pay large amounts of money for Oracle database licenses.
  • We cover how PostgresSQL as an Oracle replacement.

Introduction to Oracle’s Outrageous Statements

On Jun. 17, 2015 Business Insider published the article Larry Ellison: SAP and Salesforce pay Oracle a LOT of money.

In this article, we will review the article for accuracy.

Article Quotations

“Oracle reported its fourth quarter earnings on Wednesday and, as we’ve come to expect from the company’s flamboyant billionaire founder, Larry Ellison threw a few barbs at his major competitors.”

On SAP

“He slammed SAP’s Oracle-killer database HANA on a conference call with analysts like this:

“SAP does not use HANA in the cloud very much. I know that because they keep paying us. They paid us again, this quarter, for Oracle for Concur, Oracle for Ariba, Oracle for SuccessFactors,” he said, naming three cloud companies that SAP acquired over the past few years to jump start its cloud business.

“If they’re using HANA for anything, I don’t know about it,” Ellison chuckled.”

Expanding upon what Larry said, HANA is used for only a small portion of SAP’s applications. HANA is compatible with more applications than it is generally used for, but up until now, the vast majority of HANA implementations are with only one application, which is SAP BW.

“Like other Oracle customers, SAP must have found that it isn’t easy to rip and replace a database, even though it must be excruciating to write checks to Oracle.

One of Oracle’s CEOs, Safra Catz, explained why Oracle doesn’t have that problem. Oracle makes all the hardware and software it needs to build its own cloud. This means that Oracle’s cloud can be run more profitably than competitors, she said.”

That may be true, but it is not a reflection of how most of Oracle’s database business is delivered. Most of Oracle’s database business is still delivered on premises. Furthermore, this quote does not have much to do with why HANA is not more prevalent.

On Salesforce

“Ellison agreed and used a slam at Salesforce as an example:

“Salesforce paid us a lot of money for their platform. They buy Exadata from us to run their data center, they buy the Oracle database. They paid a LOT of money for the Oracle database,” he said, referring to a 9-year deal signed in 2013 between the two competitors.”

The parallel between SAP and Salesforce paying Oracle a lot of money simply is not there. It is not relevant (at least vis-a-vis SAP) that Salesforce pays Oracle a lot of money as unlike SAP, Salesforce has not put all of its chips on pushing HANA into their customer base. In fact, Salesforce does not even focus on the database when it discusses its solution with customers. Salesforce focuses on the business value or ease of use of its applications.

The Relevance of Salesforce on Oracle

The relevance is however between Salesforce, which does use Oracle, versus Workday, which does not use Oracle. Workday is along with Salesforce one of the largest SaaS vendors in the world.

“As the two companies became more competitive, and the two men had a falling out, Salesforce was rumored to be trying to move to an open source database known as Postgres. That would have been a bad precedent for Oracle, showing other cloud companies how they could migrate off Oracle, too.”

Postgres is picking up steam as a highly respected heavy duty database that can in many cases replace Oracle 12c. And Postgres’ rise is of concern to Oracle.

“Instead the two men buried the hatchet, momentarily, and cut a deal estimated to be valued at $300 million, where Salesforce would continue to buy Oracle’s products for another nearly decade. It was said to be a pretty good deal for Salesforce.”

On Workday

“As for Oracle’s other arch rival in the cloud, Workday?

Ellison dissed Workday in the usual ways, saying that it was winning 10 times more deals than Workday for a cloud version of the financial application known as enterprise resource planning (ERP).

We know that Workday doesn’t use Oracle’s database or any of Oracle’s technology. Ellison has said so.

So, every customer that leaps to Workday is a double loss for Oracle, both in the sale of the cloud contract, and the sale of the infrastructure that runs Workday’s cloud.

“They’re basically—this small company is basically going to have to build all of their own database technology. I mean, they need recovery, they need query processing, they need ad-hoc reporting, they need all of these things. They’re gonna have to build out that tool set themselves rather than relying on us like Salesforce.com does,” said Ellison, who also mentioned in the same context Netsuite, SuccessFactors, and SAP.”

It is not just Workday, but many other SaaS companies that have the scale are bypassing Oracle to develop their databases or using open source databases. Google mostly does not use Oracle. Quite obviously, Larry is going to be negative on this strategy. Yet the trend of not building your own or using open source databases is growing not shrinking. There are many cloud vendors that are choosing not to use Oracle for their database.

How is Oracle Situated

Oracle is better situated when they market to an end customer. But large SaaS vendors have the scale to develop their own versions of databases, and to leverage open source databases like Postgres without facing the backlash that a person might receive in an IT organization for not choosing Oracle, IBM or Microsoft.

“This has caused Wall Street analyst, Jefferies analyst John DiFucci to report that Oracle has been behaving “irrationally” to win deals from Workday for over a year.

Oracle is offering such steep discounts to customers when competing for deals against Workday, that Oracle is willing to go into the red on these deals, Jefferies analyst John DiFucci tells Business Insider.”

That makes sense. If Workday shows success without Oracle as a database, it is a signal to other SaaS vendors. One of the major marketing pitches of Oracle is that for really big and important implementations you use Oracle because it is so tested, so stable, etc.. But if Workday, which uses a multi-tenant database, and has major volume, cannot choose Oracle, then it is a beacon to those who would also choose a different path.

Conclusion

This article by Business Insider replays the quotes from the different actors, but it does not seem to know what they mean. It hits on several important points, such as the fact that some SaaS vendors have turned away from Oracle. It also gets the fact that SAP still mostly uses Oracle.

But overall, it is not clear the author understands these topics at sufficient depth to write an article on the subjects being covered. It appears that this article could be split into two, one covering the topic of SaaS vendors that use non-Oracle databases, and the other being how even after years of promoting HANA, SAP still primarily runs on Oracle (and DB2).

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

https://www.businessinsider.com/larry-ellison-sap-and-salesforce-pay-oracle-a-lot-of-money-2015-6

[Why Workday Is Different by Design, and Why It Matters](https://blogs.workday.com/why-workday-is-different-by-design-and-why-it-matters/)

https://www.cnbc.com/2017/06/01/workday-ceo-reveals-how-his-company-is-taking-share-from-sap-oracle.html

[Oracle is ‘irrational’ towards Workday – Business Insider](https://www.businessinsider.com/oracle-is-irrational-towards-workday-2015-5)

https://www.zdnet.com/article/look-at-what-google-and-amazon-are-doing-with-databases-thats-your-future/

https://www.forbes.com/sites/sap/2012/03/22/larry-ellison-calls-out-workday-for-two-fundamental-mistakes/#47c14614141c

How SAP Has Quietly Changed Strategy on HANA and SAP Oracle

Executive Summary

  • SAP’s original plan for dominating the database market with HANA was overly optimistic. The software was given a massive marketing and PR push, and the company aimed for a penetrate and radiate approach, in which customers would adopt HANA and then purchase follow-on database products.
  • In May 2017, however, SAP came to an agreement to continue supporting Oracle database products through 2025. This suggested SAP was quietly distancing itself from the aim of dominating the database market with HANA.
  • Factors driving the shift away from HANA included that the product didn’t deliver on its marketing claims and that it failed to receive projected market adoption.

Introduction: Changes in Policy

SAP has been communicating that it will replace Oracle DB with HANA on a mass scale. You will learn about SAP’s original plan with HANA and then discuss the recent unpublished change in policy regarding SAP Oracle, which says a lot about what SAP has internally realized about HANA and its future.

Considering The Original Plan for HANA

SAP’s original plan for HANA was optimistic in the extreme. It was championed by Hasso Plattner, and the plan was so extensive that describing all of it would be its article. However, in included the following:

  • Books: Four books written by Hasso Plattner around in-memory computing.
  • Marketing and PR: A massive marketing and PR push for HANA, what must have been one of the greatest efforts and expenditures in the history of enterprise software.
  • Exaggerated Benefits: The proposal of enormous benefits to HANA, some of which are cataloged in the article When Articles Exaggerate HANA’s Benefits.
  • The Illusory Concept of Simplification: The proposal that because of HANA’s simplified model, that HANA would massively reduce the complexity of SAP as well as the business processes on projects.
  • Artificially Limit S/4HANA to HANA: Here SAP took its best-selling ERP system and in the new version, called S/4HANA, limited it only to HANA. This was always an anti-competitive move as there was never any true technical reason to perform this limitation. But as usual, the Federal Trade Commission as well as the European Trade Commission were not paying attention and did not step in. The concept was that many customers would migrate to S/4HANA and then they would be forced into purchasing HANA. But that approach has not yet worked out as S/4HANA adoptions have been incredibly low, which is covered in the article, How SAP Controls Perceptions with Customer Numbers.
  • Penetrate and Radiate: SAP’s had a follow-on strategy after getting HANA into the data layer. SAP has all types of follow-on databases and products that intended to pitch to customers after they had purchased HANA. One of the issues with HANA is that SAP does not divulge all of the components that are necessary to run HANA when one buys a copy of HANA. The customer finds out about complementary products after they have made the purchase. But secondly, SAP had positioned lagging databases, such as SAP IQ, formally Sybase IQ to perform data archiving for HANA. The argument was going to be that SAP IQ communicated much better to HANA, and this would, the plan went, force out database companies that were much better at archival, in favor of SQP IQ.

SAP’s Plan to Grow Into the Database Layer

As Oracle had acquired its way into the application layer using its database market share, SAP intended to grow (rather than acquire) their way into the database layer. In this way, they intended to push Oracle out of “their” accounts. For all software vendors, you should be on notice. When you sell software into an SAP account, they believe they own that account.

SAP’s move into the database layer was based on inaccurate information. Oracle acquired its way into the application layer. This is something I am not a fan of for several reasons:  as acquisitions lead to concentrations of markets, and concentrations of markets invariably lead to less competition and lock-in.

This lesson needs to be relearned by every generation. But Oracle did have real applications that had real value propositions. So while I disagree with whether Oracle’s massive acquisition spree should have been approved by the Federal Trade Commission (which seems to spend most of its time eating donuts and taking long naps), it was not in itself deceptive, except that Oracle promised to add value to its acquisitions, when it really didn’t.

The Long-Term Problems with Software Aquisition

Here is why software acquisitions are in most cases not a good idea for the government to approve. They relate to:

  • Market Inefficiency
  • Market Concentration

Market Inefficiency

Acquisitions are typically made by companies that are dominant in one space. Oracle in databases. SAP in large company ERP. Microsoft in operating systems and office suite. These “excess” profits are then used to purchase often companies in related areas. However, this results in lower profits. Over half of Oracle’s profits still come from databases. Three-quarters of Microsoft’s profits come from Windows and Office (not XBox, phones, etc.).

Acquisitions (and even growth into non-core areas) means a decreasing efficiency of the enterprise as bureaucracy increases and the additions are less effective than the core. About the only company that seems to counter this rule is Amazon. Amazon seems to be able to move into anything they do and be highly effective at doing so. They even migrate into areas like AWS that have a higher profit margin than the area they started in (online retailing).

Market Concentration

Acquisitions lead to concentrations of markets, and concentrations of markets invariably lead to less competition and lock-in. This lesson needs to be relearned by every generation. But Oracle did have real applications that had real value propositions.

So while I disagree with whether Oracle’s massive acquisition spree should have been approved by the Federal Trade Commission (which seems to spend most of its time eating donuts and taking long naps), it was not in itself deceptive.

However, SAP’s statements about HANA were always inaccurate.

The Recent Change in Policy on Oracle

SAP’s plans for HANA were so extravagant that they fell into the category of fantasy. I was working through a consulting company several years ago and attended a meeting where several men from SAP came over to educated us on HANA and S/4HANA. What was pitched as an educational presentation became one of the most aggressive sales pitches for HANA and S/4HANA or any other product for that matter that I have ever witnessed.

Taking a Deep Drink of SAP HANA Kool-Aid from SAP Marketing

At one point, one of these highly confident men stated that “there was going to be no innovation in SAP outside of HANA and S/4HANA.”

“there was going to be no innovation in SAP outside of HANA and S/4HANA.”

This is a ridiculous statement, as it implies that no other SAP products would receive any development (at SAP, “innovation” is a euphemism for “development.” And of course, ceasing all development on all SAP products aside from HANA and S/4HANA would be a very bad, and very illogical move. It is difficult to overestimate the hyperbole that surrounded HANA, and to some extent still encompasses HANA. HANA took over SAP conferences, it took over the marketing messaging of the SAP consulting companies, with each attempting to out-HANA one another.

At one consulting company that I was contracted to, a salesperson with an amazing pipeline of HANA deals was brought into the company without checking anything about him, the desire for some HANA expertise was so high that one. But probably other consulting companies would grab any person with HANA on their resume, and at very favorable terms to the resource. On LinkedIn, virtually overnight, people added HANA not only to their experience to their job titles. There were HANA Solution Architects and HANA Marketing Specialists.

The SAP ecosystem could simply not get enough of HANA!

The Problem with Not Making Sense

There was just one little problem, and it took me a few years to figure it out. But HANA simply did not make any sense. I began investigating HANA from multiple dimensions several years ago, first because the hype around HANA smelled strange. I reminded me too much of the Netweaver marketing program that preceded it. In fact, I compared HANA to Netweaver in the article Has SAP’s Relentless HANA Push Paid Off? 

“Information about the database reseller contract between SAP and Oracle (May 30 2017)

The following text has been agreed upon by SAP and Oracle:

SAP and Oracle have agreed to a long term extension of SAP’s global reseller and support relationship. For more than twenty years, SAP and Oracle have worked together to provide customers with a supported SAP/Oracle environment, running SAP applications and an Oracle database. During this extension SAP customers can continue to acquire Oracle licenses from SAP and Oracle to support their SAP business applications, and SAP and Oracle will continue to offer support for the combined Oracle/SAP Offering.”

This is one of the longest partnership announcements SAP has ever signed. SAP sales people were until recently telling customers that support for Oracle would stop in 2017. This contract between SAP and Oracle changes that.

How SAP is Underemphasizing This

Here is the entire text of the SAUG, the SAP Australian User Group article on the contract.

“SAP and Oracle have agreed to a long-term extension of SAP’s global reseller and support relationship. For more than twenty years, SAP and Oracle have worked together to provide customers with a supported SAP/Oracle environment, running SAP applications and an Oracle database. During this extension SAP customers can continue to acquire Oracle licenses from SAP or Oracle to support their SAP business applications, and SAP and Oracle will continue to offer support for the combined Oracle/SAP offering.

Between now and 2025, SAP will continue to offer integrated support for all Oracle/SAP environments (full time and runtime).  SAP will continue its current resale practices Oracle runtime licenses for the first part of the extension period, through December 31, 2023.  For the final two years of the extension, between January 1, 2024 and December 31, 2025, SAP will sell Oracle runtime licenses only to existing Oracle runtime customers.”

That is 144 words. One hundred and forty-four words on a significant change in contractual terms that all but spells out a massive change in SAP’s HANA policy. There is no introduction to the article, and it is the identical language as in the contract announcement. It as if SAUG is ashamed to write it.

The Future of HANA?

Here is another problem SAP has. Without a large installed base of HANA, they are at a disadvantage regarding much more popular databases regarding the number people reporting things, the “community.” My view is that SAP exaggerated HANA hoping to “fake it until you make it.”

But without that growth, the marketing push is fading, and it will become more obvious that HANA is not a fast growing product, and so its inertia becomes stalled.

Does this look like a growing database? According to DB-Engines, which ranks database popularity, HANA has been declining for eight months. It should be recognized that SAP pumped a very large amount of marketing dollars and company energy into pushing HANA, actually to the detriment of other of SAP’s offerings. This is why HANA’s future does not look good. HANA is out of runway on applications where it adds some reasonable value and is now receiving blowback from SAP’s exaggerations versus real-world performance. IBM and Oracle are now increasingly pushing back on SAP — even though both companies have relationships with and depend upon SAP for revenues.  

Taking the Creme off the Top of the Coffee with BW Conversion to HANA

As you may have read in my recent article, SAP already took the creme off the top of the coffee when it sold into BW. After the BW the value proposition becomes considerably weaker as HANA is just an analytics database masquerading as something more.

Now SAP is locked into this strategy, but it does not make any sense.

I have focused on proposing that SAP is legacy. Its new products have turned out to be poor values had had a weak implementation history on accounts, as is covered in the article, How SAP is Now Strip Mining its Customers. It’s time to keep the ERP system, but stop buying so much from SAP. Our view on this is so emphatic that it is a primary theme on the Brightwork home page.

Of course, that is radical to SAP customers. But really, none of what they said would happen with regards to the benefits of these new non-ERP systems worked out. It was in total, a massive misallocation of resources into a failed strategy. But the customers that did this can’t admit the error. It is interesting that decision makers are very rarely held accountable for bad decisions, and how bad so many of these decisions are when analyzed in detail.

As I mentioned in my article last year, the other teams within SAP will not like to be discounted heavily and then charge full price for HANA. It gives the HANA guys unfair share of recognition within the company.

Who Was Wrong and Who Was Right?

Well, obviously SAP was one. SAP claimed they would be the #2 database vendor in the world back in 2017. According to DB-Engines,

  • They have the 13th most popular database in the SAP Adaptive Server.
  • They have the 19th most popular database in HANA.
  • They have the 49th most popular database in SAP IQ (formerly Sybase IQ) and the 52nd most popular database in SAP SQL Anywhere.

Does that add up to the #2 spot? I need someone good at math to help me out with this one. Does anyone have Bill McDermott’s number? His data is always so reliable.

It seems reasonable for customers to ask SAP sales people to apologize to them for telling them that SAP would not support Oracle after 2017. That looks quite dishonest, especially after that date has now passed.

Hyping HANA

In the many articles that followed on HANA, I was repeatedly told by people that worked for SAP or for large SAP consulting companies that I did not get it. That HANA was going to be a huge success, and I simply lacked the vision. I was exposed to many discussions, by people that knew little about databases or comparative database designs, that HANA was the future. This is what it is like working in SAP. When you work in SAP, you are expected to mindlessly and loyally support that notion that SAP is the best at everything. And that the mere existence of an SAP product, means that this product should be used — because it is SAP. The lunacy of people talking about things they did not understand reached a fever pitch when I was condescended to by recruiter about how HANA would be so great and that I was not getting it. That is right people, a recruiter — that is a person who never touches much less sees any of the systems that they place people for, who worked for Dickenson and Associates, explained to me that I needed to get on the “HANA train.” He explained that his only reason for supporting HANA was not to staff HANA resources, but was related to making the world a better place. (I can’t make this stuff up)

How To Deflect That You Were Wrong About HANA

A little while ago I began to notice a pattern in the rhetoric with people I would debate, which is the topic of the article How to Deflect That You Were Wrong About HANA. This described an argumentative style that moved away from the main proposals of HANA when challenged on them, to stating that HANA was “so much more” than a database. Then the topic was changed to the HANA Cloud Platform or to HANA Studio, etc.. SAP had simply come up with a number of products and had slapped the name HANA on them. This created a lot of confusion but allowed HANA proponents to essentially move the topic in other areas, and to declare that HANA was a “platform.”

Who Got it Wrong?

  • Hasso Plattner: Hasso was the main driving force behind HANA. Hasso is so wealthy and powerful within SAP that no one can “No” to him. However, Hasso greatly overestimated the benefit that something like HANA would bring to SAP. Hasso thought he had found the magic pill for giving SAP a new life. However, he had SAP invest big into databases at the exact time when less expensive databases and open source databases were about to erode the margins and sales of the proprietary database vendors. This is covered in the article How Accurate is Seeking Alpha on the Decline of SQL? SAP clearly invested in the wrong thing by going into the database, and then by bringing out such a premium priced product. Hasso was wrong on HANA not only in that the market did not respond as Hasso predicted, but most of what Hasso said about HANA was simply incorrect.
  • Bill McDermott: Bill McDermott is more PR spokesman for SAP than CEO. When Bill McDermott speaks, I never get the impression he has any idea what he is talking about. Bill is an excellent salesman, but essentially he excels as explaining things in a way that make it seem as if the objective the listener wants can be achieved very simply, but to do this, he dispenses with any detail that complicates the messaging. For example, Bill stated to a Fortune Magazine interviewer that one could do both transactions and Big Data all in a single database. However, connecting HANA to Hadoop is not using one database, is it? For those looking for career advice, this is how you can make over $120 million per year without having to do much work. It’s a nice gig if you can get it.
  • Vishal Sikka: Vishal Sikka was for a time was the “architect of HANA,” something which is a bit doubtful given his level in SAP. Vishal Sikka is almost indecipherable when speaking. I analyzed Vishal’s statements in great detail about HANA and concluded that he was massively exaggerating the overall reason for and benefit of HANA. After reading his comments, I would never listen to Vishal on any topic as long as his name is attached to it. Interestingly, Vishal left for Infosys in 2014, which may have been for reasons unrelated to HANA’s progress. However, for someone who is thought of being so intelligent, HANA makes little sense. But at SAP, at that level, you do what Hasso tells you to do. If HANA was in part his vision, one does not need a Ph.D. in computer science to recognize that you don’t put an ERP system on what is nothing more than a gussied up analytics database.
  • Bluefin Solutions: Bluefin Solutions, more than any other consulting company went all in on HANA. They wrote articles, lead by John Appleby, that to me, clearly simply copied and pasted from information provided to them by SAP. In one article John Appleby stated that “SAP is finished on Oracle.” This is a curious statement as the evidence he provided related to S/4HANA. John Appleby should know that SAP is about a lot more than S/4. Therefore even if Oracle were finished on S/4 (which I don’t think it is, as covered in the article Why SAP Will Have to Backtrack on S/4HANA), it would not mean that all SAP applications are finished on Oracle. Four and a half years after Appleby made this statement, I wonder if he could guess what the majority of SAP applications use as a database today (hint, it’s not HANA). This is why consulting companies that are partners with SAP are unreliable sources of information on SAP. And this is particularly true of public statements released in the media. After Appleby was promoted at Bluefin Solutions, Steve Chaflen took over the position of HANA promoter from him Appleby. Not only John Appleby and Bluefin Solutions but all consulting partners of SAP release inaccurate information about SAP as they compete to see who can more intensively shine the shoes of SAP in return for special consideration.
  • Gartner: Gartner receives probably around $100 million from SAP per year. All of this undisclosed. The primary analyst assigned to SAP is Donald Fienberg who is also Gartner’s liaison to SAP. This puts Gartner in a bit of a problematic area as there was no line drawn between the analyst work Donald Fienberg was performing and his role as essentially an SAP relationship manager for Gartner. Donald Fienberg made repeated inaccurate and promotional statements about HANA, such as the following “Now SAP can set up a database to do my transactions and analytics with everything virtual. People have wanted to do both in the same database for years, but have not been able to do it because of the discrepancy between the two types of data.”These guys (SAP) are first, period. That’s a good thing. They have got a two to five-year head start on everybody else..” Oracle 12c, which has this ability Donald was describing was released six months after this article was written. IBM DB2 Blu (which offers the same ability) actually preceded HANA. And Microsoft SQL Server had a column store index in 2012, therefore before Donald Fienberg made this statement.
  • Forrester: Forrester was paid by SAP to write a report that predicted a reduced TCO for HANA, which SAP then took and marketed as proving that HANA “did reduce TCO.” This deftly changed a forecast into an actual. Forrester made some inaccurate assumptions in the report including the use of a runtime license for HANA. This is not a production license, and there was no reason for Forrester to have used this except — to reduce the cost of HANA artificially. This is covered in the article How Accurate was Forrester’s TCO Study for SAP HANA?  
  • ASUG: A usual, ASUG served as simply outlet for SAP marketing proving once again that they provide no filter to anything SAP says or does.
  • Fortune Magazine: Through a series of what appears to have been paid placements, Fortune provided SAP with an outlet for SAP to say anything it wanted on the future. Brightwork will be sharing an analysis of these articles, and how wrong they were in the coming months.
  • IT Leaders Who Purchased HANA: IT leaders that supported moving to HANA were tricked. Even in HANA’s “golden case,” which is moving BW on HANA, there was never any reason to do this. SAP customers could have stayed with SAP Oracle and received a far better database with better performance than HANA at a lower price. I believe similarly this may apply for DB2 and SQL Server, which also can store data in a columnar store, but I simply have not investigated the technical comparisons as I have with these databases as I have with SAP Oracle as is covered in the article Which is Faster HANA or Oracle 12c. However, Bloor Research recently performed, a study that while funded by IBM, I have reviewed and considered it to be quite accurate. In this study, which I have analyzed in the article How to Best Understand Bloor’s Research on HANA, and have given it one of the highest accuracy ratings of any publication I have analyzed. Those IT leaders cost their companies and directed monies towards SAP’s vanity project that should have been used elsewhere. And this is no small thing. I have visited companies that needed investment quite badly in neglected areas and instead decided to use that money to invest in HANA. What a monumental waste of resources!

This is a highly truncated list. Aside from individuals who were wrong, every single large SAP consulting company, Accenture, IBM, etc. all of them promoted HANA, and all of them got it wrong. Their support of HANA was so extensive that to analyze all of it would require a book.

This is why I have often said that if I want false information, I can always find it at a big consulting company. Whatever SAP marketing happens to be saying at the time, the major SAP consulting partners all in on the “vision.”

Who Got it Right?

  • Larry Ellison: Larry Ellison criticizes anything reflexively that is not good for Oracle. But you have to hand it to him; he made some very valid criticisms of HANA. Probably one of his best lines was in 2015 when he said:“For years SAP offered up lots of benchmarks for its database systems, Ellison said. But when SAP introduced HANA, its in-memory database, the company didn’t use any of its existing benchmarks —“ and they had a dozen of them,” Ellison said. They said they were going to write a brand new benchmark for HANA.“Now, call me cynical,” he continued, “but I guess this was to make HANA look good. It was a benchmark that allowed HANA to distinguish itself. And we decided to run the same exact benchmark on Oracle. And we ran more than twice as fast as they did.”By the way, SAP has not certified our benchmark. We’ve sent it to them…over and over and over again. And for some reason, they don’t want to certify.…The facts are, the entire SAP cloud runs on Oracle, not HANA. SAP Ariba in the cloud runs on Oracle, not HANA. SAP SuccessFactors in the cloud runs on Oracle, not HANA. SAP Concur runs on Oracle, not HANA. I don’t know what HANA runs, but it’s not [SAP’s cloud applications].” Every one of these statements by Larry turned out to be true. SAP did play around with the benchmarks, in my view because the HANA benchmarks for anything but read access are poor. This is something I have verified even with people inside of SAP. And secondly, the acquired applications are not moving to HANA. Right again Larry.
  • Peter Goldmacher: In the article How Popular is SAP HANA?, I observed that Peter Goldmacher pointed out “In a research note, Cowen analyst Peter Goldmacher did a deep dive into SAP’s HANA results. SAP has said that HANA’s two-year license compound annual growth rate through fiscal 2013 has been about 120 percent. If that growth rate is true, Goldmacher noted that “the other 90% of SAP’s license business, apps and business intelligence, is growing at a combined two-year CAGR of roughly 2%, materially below category growth rates.” Peter was right. As with CRM growth many years before, SAP was simply shifting revenue to HANA from other sources. This is virtually the same thing that SAP did with CRM beginning 15 years go. SAP pushed back hard on Peter, issuing a nonsensical statement about what percentage of HANA’s sales were stand-alone deals. Every time HANA was criticized, SAP pushed back in the media through a spokesperson. And, every single time I checked what the SAP spokesman said in defense of HANA, it ended up being inaccurate.
  • Brightwork Research & Analysis: We wrote the most comprehensive and detailed critiques of HANA available on the internet. As more information increasingly comes from the field, it turns out that even we missed areas of weakness of HANA. Our research into HANA is verifiable on my LinkedIn profile article page as well as the SAP HANA (and S/4HANA) sub-blog.

Conclusion

A huge number of people have been proven wrong about HANA. HANA fatigue has hit not only customers but SAP as well. Other groups inside of SAP are tired of playing second fiddle to the HANA teams.  

The word from inside of SAP under brackets of “you did not hear this from me, but ..” SAP now realizes that it cannot come anywhere near approaching the uptake of HANA that they had hoped.

  • This is the reason for extending its relationship with Oracle.
  • This is why SAP does not want to talk about it and why they want it kept as quiet as possible. 

HANA will become just another of SAP’s offerings now. It will not become, as Bill McDermott once said, the “basis for everything that SAP does.” More information is getting out that HANA is just not as advertised, and I predict from here on out, SAP going to lose far more arguments on HANA than it will win. 

As HANA’s time in the sun has come to an end, in a future article, I will cover how SAP will have to reverse itself on HANA. It will be tricky, as it must be done in a way that will not offend Hasso Plattner. Hasso must be handled very delicately. He must be told that his vision was an absolute genius, but SAP customers simply lacked the ability to see his fantastic long-term vision.

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

https://www.g3g.com/hubfs/White_Papers/Projected_Cost_Analysis_of_the_SAP_HANA_platform.pdf?t=1455200742977

https://www.saug.com.au/news/saps-global-reseller-and-support-relationship-with-oracle-extended

https://www.oracle.com/us/solutions/sap/introduction/overview/index.html

https://www.businessinsider.com/sources-why-vishal-sikka-left-sap-2014-5

https://www.forbes.com/sites/oracle/2015/10/29/larry-ellisons-world-view-7-observations-straight-from-the-hip/

https://www.computerworlduk.com/it-vendors/will-oracles-customer-base-migrate-sap-business-suite-on-hana-3420138/

https://blogs.gartner.com/donald-feinberg/2014/09/28/in-memory-dbms-vs-in-memory-marketing/

*https://www.simba.com/blog/donald-feinberg-and-vishal-sikka-explain-about-in-memory-and-sap-hana/

SQL Server is About to Pass Oracle as the Most Popular Database

Executive Summary

  • According to DB-Engines, a site that ranks the popularity of databases, MySQL and SQL Server are about to pass Oracle as the most popular databases.
  • From July 2016 to July 2017, Oracle lost 66% of its popularity while SQL Server grew at 33% over the same period.
  • Based on these trends, Brightwork predicts that the 2018 database rankings will be: 1st: SQL Server, 2nd: MySQL, 3rd: Oracle, and 4th: PostgreSQL.
  • The decline in Oracle’s database will cause a decrease in purchases of add-on applications and negatively impact the company’s overall profitability.

Introduction: The Logic for a Changing of the Guard

The database market is changing, with lower price and open source database options nipping at Oracle’s heels. You will learn about the reasons for these changes in the database market.

Oracle’s Dominance

Oracle’s dominance in databases has been so great for so long that it is taken as a given. However, according to DB-Engines, something interesting is about to happen in the next year, and this is shown in the graphic below:

Understanding the DB-Engines Ranking

DB-Engines ranking is a site that uses a method that combines a series of factors to result in a rank of how widely a particular database is used. So what factors do they use? Well, I have listed the description of their method below:

“Number of mentions of the system on websites, measured as number of results in search engines queries. At the moment, we use Google, Bing and Yandex for this measurement. In order to count only relevant results, we are searching for <system name> together with the term database, e.g. “Oracle” and “database”.

General interest in the system. For this measurement, we use the frequency of searches in Google Trends.

Frequency of technical discussions about the system. We use the number of related questions and the number of interested users on the well-known IT-related Q&A sites Stack Overflow and DBA Stack Exchange.

Number of job offers in which the system is mentioned. We use the number of offers on the leading job search engines Indeed and Simply Hired.

Number of profiles in professional networks in which the system is mentioned. We use the internationally most popular professional networks LinkedIn and Upwork.

Relevance in social networks. We count the number of Twitter tweets, in which the system is mentioned.” – DB-Engines

This seems like a reasonable way to perform a ranking.

Oracle’s Negative Database Growth Rate

To begin, let us review the usage/popularity list from DB-Engines. This is for June.

Oracle’s DB-Engines Ranking

The June column shows the growth since the past month (as this snapshot was taken July). The month to month change moves around quite a bit. So the next column, July 2016, shows the change since the same month last year and is a more reliable guide to what is happening long term.

  • As one can see, Oracle has lost 66% of its popularity since July of 2016.
  • We can look at the base popularity; it is 1,374 units. If Oracle continues at even 1/2 this rate of decline for the next year, in July 2018, Oracle will sit at 906 units.
  • If nothing else were to happen, both MySQL (also owned by Oracle) and SQL Server would pass by Oracle. However, SQL Server is growing at 33% per year.
  • This means that in a year, its 1226 base would be 1630. This would far exceed Oracle.

If we conservatively take Oracle’s decline from 2016 and 2017 and cut it in half, while keeping the other three databases at their number from the previous year, then the 2018 database rankings would look like this:

2018 Projected Database Rankings

  1. Microsoft SQL Server: 1630 Units
  2. MySQL: 1160 Units
  3. Oracle: 906 Units
  4. PostgreSQL: 583 Units

Interestingly, Seeking Alpha has noticed this as well. In their article, The Death of the Commercial Database, they stated the following:

“We see the $29.6b commercial database market contracting 20-30% by 2021, and do not believe Oracle (NYSE: ORCL) can transition its revenue streams (from legacy commercial database to cloud-based subscription offerings) fast enough to offset the decline of this market, which represents a major legacy core of its revenue.

The commercial database market – 80% of which is an oligopoly of Oracle, IBM (NYSE:IBM), and Microsoft (NASDAQ:MSFT) – has remained one of the most stable and sticky in all of tech for over two decades. However, we think the velocity and magnitude of its decline is likely to surprise many investors.

Faster growth in use cases such as social media, IoT, and unstructured/semi-structured data that are ill-suited to the SQL standard upon which the database oligopoly is based;

Revenue from database software represented ~36% of Oracle’s total FY16 revenue and ~55% of its operating profit.”

Understanding Oracle’s Profits

This statement is quite interesting because it means that of all of Oracle’s acquisitions, none were as profitable as its database business.

According to SeekingAlpha, Oracle’s 2016 profits break down the following ways:

  1. Database Software: $1,445 Million
  2. On-Premises Applications: $1,022 Million
  3. Database Infrastructure: $250 Million
  4. Hardware Support: $125 Million
  5. Cloud Revenues: $83 Million

The Counter Argument to Oracle’s Database Decline Versus SQL Server

Oracle’s databases have many proponents, and it was interesting to find a counter-argument to the Seeking Alpha article, which I have pasted below:

“Articles like this were written 20 years ago. In 1997, the Oracle database was going to decline because it did not fit modern use cases and new document data types (HTML, XML) like the new extensible databases such as Illustra and Polyhedra. Oracle was not “object oriented”, so OODBMS like Poet, Versant, and Object Store would soon rule the day. With 64-bit computing mainstream, in-memory databases like TimesTen, ANTS, and SolidDB were on the “right side of Moore’s law.” In data warehousing, Red Brick and IQ were a lot faster due to advanced indexing. Most of all, Oracle was going to be replaced by cheap or free open source databases, especially MySQL. Here we are in 2017, and of the vendors just mentioned, only TimesTen and MySQL still survive” – as part of Oracle Corporation.

Predicting Oracle’s Database Market Share Decline?

The issue with this analysis is that just because Oracle’s database decline was predicted due to new technologies in 1997, and did not occur, does not mean that this new prediction will not occur. HTML and XML were greatly overblown in the late 1990s, and they never affected databases they were projected to have had. The same applies to object-oriented databases. It is also true that open source databases did not replace Oracle, although MySQL has undoubtedly reduced Oracle’s proprietary database growth.

But the problem with arguing this is that the popularity of Oracle’s proprietary databases is declining. And Oracle is nowhere near as popular in the NoSQL database market as it is in the SQL database market.

Conclusion

If Oracle’s control over databases declines, it causes two issues.

  1. Overall Profitability: One is the direct profitability issue, as Oracle receives so much of its profits (although less of its revenue) from databases. Oracle’s 12c is (depending on a number of variables) a million dollar database per server and has high yearly maintenance costs (it is very complex and can do quite a lot). Losing sales on such a high-profit item is going to cost profits. This is pointed out by the Seeking Alpha article.
  2. Account Control Issues: But a second issue is that Oracle uses its database (through account exposure and account control) to leverage customers to purchase its applications. Oracle has an enormous number of acquired applications that are less impressive comparatively than when they were purchased. This is the normal state when one software vendor acquires another software vendor. But with a lower ability to control accounts, this means the on-premises applications will (I predict) decline as well.

There is a massive amount of discussion as to whether Oracle is moving to the cloud fast enough, but Oracle appears to have a bigger issue at hand: it’s swiftly eroding market share in its core profitable product.

On the other side of the issue is Microsoft’s fortunes, as they appear poised to surpass Oracle in database popularity. This actually won’t matter all that much for Microsoft.

SQL Server sells for a much smaller amount of money than Oracle does with its database, at roughly $14,000 for an enterprise version. Estimates are that SQL Server and all other databases by Microsoft (principally Access) drive roughly 5% of revenues for Microsoft.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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    Just fill out the form below and we'll be in touch.

References

https://seekingalpha.com/article/4044813-death-commercial-database-oracles-dilemma

The Risk Estimation Book

 

Software RiskRethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

Is Oracle in Trouble (Longer Term) for Oracle Cloud vs AWS?

Executive Summary

  • Oracle is a dominant database vendor, but Oracle is set to lose out in database growth as well as IaaS growth in the future.
  • How AWS threatens Oracle’s account control and how AWS dramatically differs from Oracle in using products themselves
  • Our prediction of what will happen versus AWS (Oracle Cloud vs AWS)

Introduction

This blog focuses on SAP HANA and related topics, and of course, Oracle database is a related topic. SAP HANA was designed not to benefit customers, not to bring anything particularly advantageous to the market, but to grab the high margin database business from Oracle. Oracle is the dominant database that SAP customers use. SAP thought that if they used enough false claims about HANA they could claim a large share of the database market. Bill McDermott predicted that by this time, 7 years after HANA was introduced, SAP would be the number two database vendor in the world.

SAP made all manner of exaggerations in order to promote its customers to drop Oracle in favor of HANA. All of these claims have been researched by Brightwork Research & Analysis and have been proven to be untrue. Oracle’s future database dominance will be challenged, but not by SAP. 

In this article, we will observe something quite interesting about their popularity in databases and what it might mean for the company’s future.

Understanding the DB-Engines Ranking  forOracle Cloud vs AWS

DB-Engines ranking is a site that uses a method that combines a series of factors to result in a rank of how widely a particular database is used. So what factors do they use? Well, I have listed their description of their method below:

“Number of mentions of the system on websites, measured as number of results in search engines queries. At the moment, we use Google, Bing and Yandex for this measurement. In order to count only relevant results, we are searching for <system name> together with the term database, e.g. “Oracle” and “database”.

General interest in the system. For this measurement, we use the frequency of searches in Google Trends.

Frequency of technical discussions about the system. We use the number of related questions and the number of interested users on the well-known IT-related Q&A sites Stack Overflow and DBA Stack Exchange.

Number of job offers, in which the system is mentioned. We use the number of offers on the leading job search engines Indeed and Simply Hired.

Number of profiles in professional networks, in which the system is mentioned. We use the internationally most popular professional networks LinkedIn and Upwork.

Relevance in social networks. We count the number of Twitter tweets, in which the system is mentioned.” – DB-Engines

This seems like a reasonable way to perform a ranking.

Oracle’s Growth Rate

To begin, let us review the usage/popularity list from DB-Engines.

DB-Engine rankings can go up and down over time, so when we refreshed this article we took a second data point.

Oracle’s decline has continued, but interestingly, MySQL and SQL Server have turned significantly negative. This does not track what we will discuss, which is Oracle databases which are switched from being on premises to being hosted with AWS or Azure or other — reducing Oracle’s support revenue. 

Oracle’s DB-Engines Ranking for Oracle Cloud vs AWS

Oracle has two of the fastest declining databases in terms of popularity on the entire list of databases. MySQL is less of a concern as Oracle makes little money on MySQL as it is open source. However, Oracle’s proprietary databases are steeply declining in popularity. Now the overall database market is not growing very fast. In fact, the top 2 databases have an average growth rate of 4.2%. Although it should be mentioned DB-Engines is not measuring revenues, but rather popularity.

  • Clearly, databases that are growing very rapidly such as PostgreSQL and MariaDB are simply taking market share that Oracle is losing. Of all the open source databases, PostgreSQL has probably the best overlap with Oracle in terms of higher-level functions. However, it is also true that many companies that use Oracle don’t take advantage of Oracle higher level functions. That is they purchased Oracle on the basis of brand recognition and defensibility if something were to go wrong (i.e. the IBM argument “no one ever got fired for buying IBM”)
  • This means lower cost databases are eroding the market share of a high-cost database, with high maintenance costs (but with more ability to be tuned).

Oracle’s Long-Term Growth

DB Engines also shows the long-term trend of Oracle.

This is a rather shocking and severe decline. What is curious is how little this is commented upon. Oracle’s databases have not declined, but open source alternatives are eating away at Oracle’s market share, as well as lower priced databases like Microsoft’s SQL Server. Let us look at SQL Server’s growth. 

This graphic is misleading, however. It makes Oracle’s decline look more much severe than it actually is. This is because the base is set to 1.3, instead of zero. If we look at the actual percentage decline from Jan 2013 to July 2017 it is 1.5k – 1.35k or .15. .15/1.5 = 10%.

However, if we look at the graph, it looks like a decline of over 50%. This is the problem with graphs that do not have the x axis set to zero.

Also, this does not seem to match the 97% decline year over year presented in the table. July 2016 shows Oracle with a popularity of roughly 14.2. A decline from 14.2 to 13.7 is .5/14.2 = 3.5%. So how does that comport with DB-Engine’s estimate of 97% decline year over year?

After a significant period of decline in 2014, 2015, SQL Server is regaining its popularity. But is not indicative of long-term growth. 

PostgreSQL is a highly technically competent open source database. After 2014, PostgreSQL has grown consistently. This is exactly the type of database that it taking market share from Oracle, and looks ready to do so in the future. 

Oracle and the Cloud (Oracle Cloud vs AWS)

Oracle is like SAP, a vendor that flourish and is completely designed for the on-premises model. Oracle has two major problems with the cloud.

  1. SaaS vendors tend to not choose Oracle. And prominent SaaS vendors like Salesforce that do use Oracle are trying to move away from them.
  2. Oracle’s applications are not substantially used in the cloud. Oracle sells cloud licenses (because this is how Oracle compensates salespeople) but Oracle sells both the on-premises license and the cloud license bundled. However the cloud license is far less frequently used, and it becomes shelfware — all of this is an attempt to cloud wash Oracle’s earnings for Wall Street.

This following point is brought up by Ahmed Azmi.

“Oracle is obsessed with AWS. Over the past couple of years, Oracle’s marketing machine has been completely fixated on Amazon’s cloud business. I knew something was up when Larry used most of his hour-long keynote at Open World ’16 in San Francisco to trash AWS’ slow first-generation cloud infrastructure.

By October 2017, AWS migrated over 40,000 databases to their cloud. The majority of which are Oracle instances. Why’s this a threat? Because these are AWS fully managed instances. This means AWS takes care of the full range of database administration work including upgrading, patching, and security.”

How AWS Explains This Topic

This is explained in the AWS page on the benefits of managed databases like AWS RDS.

“Many customers prefer to use Amazon RDS for Oracle because it frees them to focus on application development. Amazon RDS automates time-consuming database
administration tasks, including provisioning, backups, software patching, monitoring, and hardware scaling. Amazon RDS simplifies the task of running a database by eliminating the need to plan and provision the infrastructure as well as install, configure, and maintain the database software.”Strategies for Migrating Oracle Databases to AWS

As we are currently doing application development ourselves for our application the Brightwork Explorer, this resonates with us. We want the database to just work, and don’t want to worry about all the database maintenance, which is why we are going with AWS ourselves.

Ahmed continues….

“The AWS threat is so serious, Oracle resorted to the most desperate anti-competitive measure the industry has seen in decades. In January 2017, Oracle quietly doubled its database license for instances hosted on AWS cloud!”

How AWS is Changing How Customers Staff Database Management

This next quote from Ahmed gets into how AWS is changing how customers staff database management, essentially outsourcing it to AWS.

“This is irresistible to many customers because they no longer need to keep as many DBA’s on their payroll. The savings are really quite significant. The operational agility is even better. This model is a no-brainer not only for small businesses, but also for large companies trying to do more with less.

But that’s just an appetizer. Here’s the main course: A fully managed database is a trouble-free database. In other words, customers can easily drop the annual 22% maintenance and support fee they pay Oracle and save really BIG. That’s the existential threat because nearly 50% of Oracle’s annual revenue is generated from install base M&S. The cash cow is moving to greener pastures.”

But familiarity becomes less of a concern if someone else is managing it — providing the DBA, etc… And to Ahmed’s point, AWS has a history of proving managed DBs; Oracle never had this background. (They are an on-premises vendor in their heritage — and as Ahmed points out in their actual revenues).

The customer buys the database and hires their own DBA. That has been their model.

How AWS Threatens Oracle Account Control

Oracle (overall) is vulnerable to database maintenance loss because everything Oracle does is based upon its account control which is based upon its monopolistic control over the database.

If AWS threatens that, it threatens everything else that Oracle does — including their account control.

Ahmed’s quote regarding commoditization of the database layer is as follows.

“Cloud computing commoditized hardware. Now, it’s commoditizing software starting with database. The database, a back-end process by definition, is the perfect candidate for automation.

What happens when a database is commoditized? Just like compute and storage, customers only care about the SLA not the manufacturer. They no longer care HOW you deliver 99% availability because that’s no longer their concern. In this case, why keep paying millions for M&S? You no longer maintain the database and you loathe tech support.”

How Oracle Cloud vs AWS Differs in How the Companies Go To Market

And this shows a difference in how Oracle and AWS go to market.

“AWS and Google are developer-focused. They sell to developers. When your buyer is a developer, you really need credentials. You get credentials from building not buying and reselling.

You may be surprised to learn that AWS hired so many seasoned Oracle salespeople. They hire them because they own the account relationships at many organizations and know how to open doors. Long years of experience also gives you a deep understanding of the local market.

AWS goes to market primarily by gaining grass root mindshare for their developer centric tools. You can call it B2D2B where developers use the services to build solutions then they (the developers) do the selling internally on behalf of AWS. They showcase their work to management as social proof. Much of the process, as you said, is self-service. You don’t need nearly as many sales people. The products do much of the “talking”.”

This gets into the topic of the prominence of the database as it becomes a service.

“The database trajectory is a micro-service. Apps and developers only need to know the API/SQL. If the service provider switched overnight to another SLA-compatible micro-service that happens to run say RedShift, who cares?”

Migrating Oracle to AWS (Lo0king Easier and Easier)

As pointed out by Ahmed, AWS has hired ex-Oracle sales to get Oracle accounts transfer to AWS hosting. A major part of Oracle keeping its customers is inertia. AWS’s hiring to sales reps (many who were let go by Oracle in an effort to go younger and cut its sales costs, explained by Ahmed in the following quotation).

“The idea is to replace as many highly experienced (expensive) account reps with much cheaper fresh grads to lower operating cost enough to report a net profit for product lines where sales growth has stalled.

The justification is that in such accounts, experienced reps add no value since the customer is already locked into long-term contracts and account control is already established via lock-in and the prohibitively high switching cost.

The problem, as Mark Dalton noted, is that those high-profile reps joined competitors like AWS, Google, Salesforce, and Workday. They took with them the account relationships, deep industry insights customers want more than anything else, and some pretty persuasive, time-tested, competitive tactics.

It’s dangerous to think that the credentials of an enterprise sales rep is a replaceable commodity.”

This is clear evidence that AWS is becoming more aggressive in going after Oracle’s maintenance business. AWS did not have to do this. They could have sat back and continued to receive inbound business and continued to grow very well. However, out guess is that AWS saw the opportunity to seriously cut into Oracle’s maintenance business, and by selectively hiring ex-Oracle sales reps decided to alter their normal sales strategy. How can we put this, AWS essentially said to Oracle “For you, we will make an exception.”

But AWS also has online educational material that explains how to migrate Oracle DBs to AWS as well as Oracle DB to AWS’s DBs like Aurora.

They also offer a migration service. 

We have always found that AWS has some of the best technical documentation, and all of it available on the web. 

Oracle Database Migration Options

 ApproachTool Provider
For Smaller Databases < 200 MB (Even with numerous objects)SQL Database CopyOracle
Greater than 200 MB but Smaller than 500 MB.Materialized ViewsOracle (Oracle Database Enterprise Edition)
Greater than 500 MB, Less than 10 GBSQL Loader (Process repeated per schema)Oracle
Greater than 10 GBData PumpOracle

In AWS’s documentation, it shows different approaches for exporting databases from Oracle.

 This is the SQL Database Copy, (for smaller databases).

...which changes depending upon the size of the database. SQL Loader for databases smaller than 10 GB. 

The more customers have customized the Oracle database, the more they have followed Oracle’s advice and placed stored procedures in the database, the more difficult it will be for them to migrate their data to AWS, and also to other non-Oracle databases.

A big part of AWS’s strategy for grabbing Oracle support business is by having customers help themselves as much as possible.

How Oracle Really Sees the Cloud (Oracle Cloud vs AWS)

Oracle appears to have a weak commitment to the cloud as anything more than a mechanism to extract more income from companies and to get a higher multiple from Wall Street. This following quotation is the problem that companies run into when they both try to message to customers and to Wall Street, you end up with inconsistencies.

“And healthy margins are what Oracle’s cloud strategy is all about. “When a customer who is on-prem paying us support moved to the cloud, they pay us more money,” Hurd explained on the most recent earnings call. “They don’t pay us one to one, they don’t pay us two to one, they pay us more like three to one. In some cases more than three to one.”Forbes

How is a customer supposed to interpret this statement from Mark Hurd?

More reality regarding Oracle’s true commitment to the cloud is offered by Mark Dalton, CEO of AutoDeploy.

“Oracle has cloud marketing, AWS has the real deal. The capabilities that AWS has so far outpaces anything Oracle talks about, it is astonishing. I would urge everyone to watch Werner Vogels and Andy Jassey’s talks at Reinvent, last year. Vogels is particularly good.

On Oracle sales front, I used to think the biggest threat to Oracle was not having a fully baked cloud roadmap. I’ve come around to think that it’s the massive sales force that Oracle has alienated, and now have huge upside to go work with Google, Amazon, SFDC etc….Oracle is losing the institutional knowledge of their sales teams. They just push cloud cloud cloud regardless of customer needs. It’s a problem.”

What is the Value of Oracle Support?

Oracle support is as little in value-add as SAP’s, and Rimini Street was essentially originated as an idea to go after this 90%+ margin business that Oracle has in its support. As with SAP support, it is one of the great areas of waste in IT budgets for companies that use SAP or Oracle.

“As a recent Rimini Street survey showed, as much as 74 percent of Oracle customers are running unsupported, with half of Oracle’s customers not sure what they’re paying for. These customers are likely paying full-fat maintenance fees for no-fat support (meaning they get no updates, fixes, or security alerts for that money).” NZ Reseller

This article brings up the question of whether you should be hosting with Oracle. That is, is IaaS and managed DBs a core thing for Oracle? Oracle has immense resources and can cut the price on its IaaS BDs, but the price is not the only factor, but other probably more important features are selected and options for one. So what if a customer want to migrate some of my current Oracle DBs to Redshift or try out other DBs, is Oracle a good choice for my IaaS provider? No. Oracle will, of course, lock them into Oracle.

How about proven managed DB capability. Is this an Oracle core “thing?” No. Oracle is doing this defensively.

Again Oracle seems to be transitioning to managed DBs rather than it being something they have normally done.

How AWS Differs Dramatically from Oracle in Using Products Themselves

Have you noticed how little AWS talks or makes announcements or talks about how much they are investing in A or B? Amazon is huge but very quiet. They don’t have to make big pronouncements; they don’t need expensive sales reps — they just quietly grow market share by being more efficient and offering more choice.

If you don’t actually use your own stuff, you are much more likely just to create trendy stuff that sounds cool. SAP does this. They sell software on the basis of things that sound cool, and they don’t care if any of the cool things end up being true.

Oracle has made announcements that they are investing mightily in data centers as the following quotation attests.

“The future of IT is autonomous. With our expanded, modern data centers, Oracle is uniquely suited to deliver the most autonomous technologies in the world,” said Oracle CEO Mark Hurd. “As we invest, our margins will continue to expand. And with our global datacenter expansion, we are able to help customers lower IT costs, mitigate risks and compete like they never have before.”

First, Oracle has actually very little to show for the “autonomous database” which is a response to AWS’s managed service. The vast majority of Oracle instances globally are managed the old fashioned way, inefficiently, on-premises and with little in the way of automation.

Second Oracle seems to think the only thing that separates them from AWS that will make the difference between Oracle Cloud vs AWS is more servers and more sysadmins. But if customers are looking to have someone manage their databases why would they want to be locked into one database vendor?

  • If possible, (which it is) it is preferable to choose an entity that is database agnostic.
  • An entity that can offer scale economies in Oracle’s database that even Oracle can’t seem to offer?
  • And if the database becomes managed, then the preference for Oracle DB will decline, as much of Oracle’s market share in DBs currently is due to familiarity with IT departments.

A Prediction of What Will Happen Versus AWS  (Oracle Cloud vs AWS)

Sounds like Oracle is going to lose a lot of maintenance to AWS in the coming years.

This whole thing with Oracle being able to charge so much for their database for such long periods of time so long is odd.

Normally customers say Oracle is their least liked vendor, and yet they have this leverage over their customers for so long while there are so many good options available. The old argument was MySQL was not heavy duty enough, but now PostgresSQL brings scale and performance. MariaDB has built-in cloud features that 12c does not have.

AWS sees a big fat margin in Oracle maintenance and they are going after it.

Oracle’s Attempt to Respond to AWS with Pricing

Oracle has claimed that customers that switch from AWS to Oracle for managed DBs will see their costs decrease.

Ahmed Azmi has the following observation on this.

“Larry doubles Oracle DB license on AWS then claims he can halve the cost on Oracle cloud. When Larry’s gone, I’m going to miss his funny antics. Ethics aside.

Nobody can compete with Amazon or AWS on price leadership. Google’s the only exception because of their monstrous scale and pervasive automation. Everyone else, in comparison, has enormous cost inefficiencies. If you have any lingering doubts, ask Verizon, HP, Cisco, Rackspace, and VMware.”

Oracle as a Highly Expensive Offering with High TCO

Oracle has always been a very expensive offering — literally, customers constantly complain about Oracle’s pricing. I have heard these stories for decades now. But all of a sudden Oracle is going to cut the cost in half. Its difficult to believe because its antithetical to what Oracle has been about. That history does not get wiped away because Hurd or Ellison make some statement about pricing at a presentation.

The standard argument offered by Oracle has been their database is better than all other databases. That is a different topic. But it has not been the price argument.

Here is another story that makes the Oracle price declaration seem unrealistic.

“According to that story, Oracle, which would not comment, is calling lawyers in faster to invoke “breach notices.” These contractual notices mandate that non-compliant customers stop using the relevant software within 30 days. If the software in question happens to be the company’s lifeblood database, that is a potentially lethal threat. But guess how the customer can avoid all that unpleasantness? By buying cloud! Cha-ching for Oracle.” – Fortune

And in this quote.

“The secret: tricking customers into using features they haven’t licensed. “Oracle’s licensing policies are notoriously vague and confusing,” said Robert Sheldon, technical consultant writing for TechTarget’s SearchOracle. “One misstep and you can end up owing thousands of dollars in audit fees. Yet Oracle software, with its dazzling array of management packs and pre-installed options, is easy to misuse.”

This is the same technique used by SAP, but for indirect access. Both SAP and Oracle use confusion in order to charge more from customers than would ordinarily be possible. This can be viewed as the attorney approach to extraction.

“The challenge with Oracle software, in particular, is that product options and management packs are installed with the main products and enabled by default.” Once a customer has fallen into this trap, Oracle sends it a breach notice, and then sends in a team to conduct a software license audit. Bringing a customer into compliance, however, isn’t Oracle’s primary goal – selling them services they may not want or need is. “These days, to make the breach notice go away — or to reduce an outrageously high out-of-compliance fine — an Oracle sales rep often wants the customer to add cloud ‘credits’ to the contract,” Bort said.

Once again, it almost seems as if this is undifferentiated from SAP’s use of indirect access. Under indirect access, SAP brings what are phony claims in order to push companies into buying more SAP.

“Customers are buying cloud services to make the Oracle issue go away, not because they have any intention of using cloud services,” according to Craig Guarente, CEO of Palisade Compliance.

Why Is Oracle Used?

Oracle has several different businesses. They have hardware, applications and databases. But their core advantage lies in their database. However, the options for both the database itself as well as the hosting now put Oracle’s database in a weak value proposition. A case can be made for Oracle 11 and 12’s differentiation in the market, but the differentiation is for a narrow number of applications. If a reset button were hit, and companies were able to select any database they wanted, Oracle’s database dominance would change very quickly. This brings up the following quotation.

“For many of its existing customers, however, sticking with Oracle in spite of its anti-customer policies is preferable to switching to another vendor – not because Oracle’s products are necessarily any better, but because Oracle has done such a good job putting up roadblocks for any company considering such a move.” – Forbes

The Problem for Oracle for Oracle Cloud vs AWS

The problem with this for Oracle is that databases are really Oracle’s core strength.

Oracle used its database revenue to make an enormous number of acquisitions in applications.

However, none of those acquisitions were as differentiated as their database. As Oracle’s database decline continues, it reduces their power over their customers. And that leads to Oracle’s application sales also declining. Not immediately of course. Applications in the enterprise space have a stickiness. For example, DB-Engines shows Oracle declining in popularity over the long term, but a rapid decline.

The original purpose of making such acquisitions in the first place was, at least in part, to concentrate the account management and sales effort. Therefore, an Oracle rep would not only offer databases but applications as well. Enterprise accounts tend to like to concentrate their purchases from as few vendors as possible. That is rather than evaluate each offering on its own merits, IT pushes the business to make their lives as easy as possible and to manage fewer vendors.

Therefore, the thought goes that the more that any one rep can offer, the higher the ability to crossover sales for various products.

Historically, vendors that have made the most money, have used a strong capability in one area to sell more product in another area. This is how vendors grow from stronger offerings to progressively weaker offerings.

Conclusion

The trend in databases is clear — most of the growth is coming from open source databases versus proprietary databases. This will have a major impact on Oralce Cloud vs AWS. What this shows us is that the original promoters of open source are being proven correct.

  • The Relational Market: This is still dominated by Oracle in both its proprietary databases and in MySQL, is giving way to open source databases.
  • The Rise of AWS: The usage of AWS’s open source databases continues to grow rapidly. This is bad for Oracle Cloud vs AWS because AWS primarily offers open source databases on its PaaS. It exposes more customers to non-Oracle databases. And the more they do, the more customers will realize they often have Oracle databases that could be migrated to open source options.

These activities in the popularity of databases bode poorly for Oracle at least in the long term and is something that they will need to address with some strategy.

As a side note. It is important to look over long periods of time for database increases or decreases in popularity. If we look at the example of SQL Server, it has grown quite a bit over the past few quarters. However, has yet to recapture the popularity that it maintained back in 2013. This may indicate some change in policy, price change etc..

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References

Ahmed Azmi is a Developer Advocate and Community Builder at the Dubai Technology Entrepreneur Center

https://d0.awsstatic.com/whitepapers/strategies-for-migrating-oracle-database-to-aws.pdf

https://www.reseller.co.nz/article/633023/why-oracle-cloud-bravado-masks-deep-database-despair/

https://www.linkedin.com/pulse/why-aws-bigger-threat-oracle-than-sap-microsoft-ahmed-azmi

– https://fortune.com/2015/07/10/oracle-sales-cloud-hard/

https://db-engines.com/en/ranking_definition

https://www.forbes.com/sites/jasonbloomberg/2017/07/11/oracles-cloud-strategy-ruthless-or-byzantine/#5fae6e1662d9

https://www.techrepublic.com/article/oracle-prepares-for-war-with-amazon-adds-12-new-data-centers-for-cloud-business/

Oracle as the new IBM — has a long decline started?

Analysis of Steve Lucas’ Article on What Oracle Won’t Tell You About HANA

Executive Summary

  • Steve Lucas is one of the most quoteworthy of the SAP executives. In an article, he proposed that many false items around HANA under the concept of “setting the record straight.”
  • Steve Lucas discusses topics ranging from performance to pricing. In this article, we review Steve Lucas’ level of accuracy.

Introduction

Steve Lucas wrote a popular article back in 2012 when HANA was first introduced. Now five years later, we will review what came true.

Steve Lucas Quotes

“The recent and significant increase in negative messaging Oracle is attempting to spread about SAP HANA is pretty amazing. Traditionally at SAP, we’ve taken the high road when it comes to responding to these claims, as nearly 100% of what Oracle says is inaccurate and designed with one thing in mind: To protect their established revenue base. All you have to do is look at what Oracle has stated about the cloud over the last 10 years in order to understand their plan of attack for in memory:”

  1. Step 1: Halfheartedly acknowledge its presence
  2. Step 2: Continue to push old technology
  3. Step 3: Create fear and doubt related to innovations

“We see the same, tired response plan from Oracle emerging for in memory and SAP HANA.”

Steve Lucas works for SAP and is not an unbiased source of information on SAP. So these claims against Oracle are also designed to improve revenue.

However, are they true?

SAP Taking the High Road?

Well, since I began working with SAP in 1997, I have never seen SAP take the high road. SAP is a consistently unethical and monopolist software vendor. Just like Oracle. Secondly, Steve Lucas has not worked with SAP all that long. He came over from Marketo, so would know less about SAP’s history than I would. Thirdly, through his comments, Steve Lucas demonstrates that he knows very little about databases.

Therefore he is unqualified to either promote or speak on SAP’s database or to contradict claims made by Oracle. Oracle also makes exaggerated claims about their database(s). But one has to know something about databases to contradict them, or to know which claims are the most exaggerated.

SAP Using a Similar Storyline to Oracle Regarding the Cloud

Interestingly, the items pointed out by Steve Lucas regarding Oracle’s response to the cloud has also been SAP’s response to the cloud. That falls under the category of hypocrisy to the highest degree. Both SAP and Oracle are on-premises vendors that have tried to put off the cloud as long as possible while cloud washing.

“Why would Oracle want to innovate anyway? There are billions of dollars’ worth of reasons why Oracle must protect their legacy database technology. Oracle has boxed itself into a corner, where they can’t afford to cannibalize their existing revenue stream, and at the same time are obligated to push massive amounts of hardware from their Sun acquisition – effectively amounting to a digital albatross hanging around their neck.”

I could make and have made the same argument regarding SAP! SAP is not an innovative software vendor, but pose as one. I have proposed that SAP reduces the level of innovation in the enterprise software market in the article How SAP Reduces Innovation.

Billions of Dollars of Revenue to Protect

So likewise SAP has billions of dollars’ worth of reasons to protect their ERP and other application business by raising as many barriers as possible. By paying off IT media sources by giving their implementation business to unethical consulting companies like Deloitte, Accenture and IBM that then recommend SAP regardless of the fit between the SAP application and the business requirement, by creating a false construct of Type 2 indirect access in order to block out competitors who have beaten them in software selections.

So SAP has no stones to through here, and if Steve Lucas can’t figure that out, well I don’t know what to say.

“We should also let it be known that comparing this Exalytics bundle/packaged thing is just a red herring for customers. It’s an attempt to imply that HANA isn’t ready to compete with Exadata or Oracle’s core database. It’s an attempt to imply HANA is limited to analytic business scenarios.”

HANA is limited to analytic business scenarios. Steve Lucas should probably have educated himself on databases before writing these things. HANA has portions of the database that is column oriented. SAP proposed that the entire database was column oriented, but we later learned that HANA is a combination of row and column-oriented tables. However, HANA is effective only for queries run on preconfigured analytic data (so simple SQL queries) and slow for transaction processing or complex or long queries.

Column-Oriented for Analytics

It is well known that column-oriented databases are optimized for analytics. This is covered in the article, Why SAP HANA is So Fast. Oracle 12c has a superior ability to switch between column-oriented and row-oriented storage. This is included in the article Which is Faster HANA or Oracle 12c?

Steve Lucas’ writing is like reading someone falling down a set of stairs. Steve Lucas seems not to understand databases but is very comfortable discussing them.

“Bottom line for Oracle, there is no incentive to truly innovate. Is innovation loosely coupling and stacking an RDBMS + TimesTen + Exadata + Endeca on expensive hardware? Clearly they would rather repackage 20 year old, tired products on refrigerator sized servers and overcharge customers for it.”

What a statement. Oracle did innovate with Oracle 12c several years after this. Oracle has been improving its database for decades since it was first introduced. It is nothing compared to how much money Oracle brings in from their database, but they do improve the database. Moreover, why is Steve Lucas obsessed with Exadata in this article. Did he not comprehend that Oracle was pushing its analytics appliance as HANA is primarily an analytics database!

Is that point lost on Steve Lucas?

“In this blog, I will provide a set of facts about SAP HANA and in-memory computing. I will try my best to be objective throughout and dispel some of the silliness Oracle is spreading.”

In Memory Computing?

In memory, computing is a myth, which is something we covered in this article.

In memory, computing was aggressively promoted by SAP, and instead of explaining its inaccuracy, Oracle decided to copy SAP’s marketing message.

It is interesting that Steve Lucas has the lack of self-awareness to describe silliness written by others when he does not himself have the subject matter expertise to understand this topic.

“Let’s take a look at the inaccurate comparisons and misnomers floating around:”

  1. “TimesTen is a mature database technology vs. SAP HANA
  2. Scenario comparisons of Exalytics vs. SAP HANA
  3. Pricing comparisons between HANA and Exalytics.”

Is misnomer the right word here? A misnomer is a misnaming. It is difficult to see what misnomer Steve Lucas is referring to. Steve Lucas means misimpression.

Here are his explanations for why in essence SAP is wrong.

#1: Comparing Database Feature/Functionality:

“Oracle is attempting to compare TimesTen to SAP’s HANA database. There are as many 14 attributes that they claim HANA lacks, including in-memory aggregates, multi-dimensional OLAP (MOLAP), in-memory indexes, NUMA support, etc. Ironically, most of these are cumbersome mechanisms that Oracle has patched on to their RDBMS to improve performance, but thanks to HANA’s innovation, are unnecessary overhead and maintenance tasks that customers will be glad to leave behind.”

“To me, this comparison at a very basic level is exactly the same I would have expected to hear from the horse and carriage salesmen when automobiles were first introduced. Oracle is essentially arguing that our “car” is not as good because it doesn’t come with feed for the horses, or a large bucket and shovel that customers can use to clean up their mess.”

This is highly misleading.

And it is not Oracle that has “patched” them onto their RDBMS. They are part of any RDBMS. Steve Lucas may be surprised to learn that aggregates are a pre-computation device used to speed processing. If a series of values are consistently referred to, it makes sense to create an aggregate table of them. SAP seems to see this as some kind of sin, but it is a sound practice. MySQL has aggregates, MariaDB has aggregates, you get the idea.

H0w Steve Channelled Hasso Plattner

It is unclear why they are considered cumbersome by Steve Lucas, but I suspect this is only because he was told this by Hasso Plattner.

Hasso Plattner places a lot of emphasis on removing aggregates in this book. Hasso wrote four books on in-memory computing, all of them filled with falsehoods. However, outside of SAP, others that focus on databases, and have concentrated on databases for far longer than SAP do not agree that aggregates are a bad thing. We are currently developing an application, and one has to decide whether to precalculate or whether it is worthwhile to re-calculate values. Hasso Plattner seems to emphasize reducing aggregates because he needs to show that he an by extension HANA made essential contributions “innovations” to the column-oriented design, when in fact he didn’t. We cover Hasso Plattner’s lack of innovation and the fake storyline around HANA’s innovation in this article. 

Also, aggregates aren’t maintenance items. They mostly sit there until called upon. Indexes are very similar to aggregates but are pointers for the database to more quickly find things. Indexes also make a lot of sense.

The Major Problems with Steve Lucas’ Comments

So there are three major problems with Steve Lucas’ explanation here of RDBMS systems.

  1. It proposes that Oracle is the only database vendors that use indexes, MOLAP, aggregates, etc..
  2. It proposes that all of these items were grafted onto the RDBMS willy-nilly. They weren’t; they are part of the design.
  3. It proposes that these additions are a lot of maintenance when they aren’t.

There is some truth to the carriage versus the automobile, but the problem is it shows Oracle as the aggressive party here when it is SAP that is the party stating that they have come up with some quantum leap in databases when they haven’t. SAP is saying that all of these items are irrelevant when they aren’t. For instance, HANA still uses aggregates, although minimizes them.

There are in fact cases where it can make sense to replace Oracle, but the opportunity is not with HANA. The opportunity to replace Oracle is with lower cost and quite competitive databases like PostgreSQL or MariaDB, as well as moving Oracle DBs off on premises to AWS or Azure that allow for those databases to be managed. Once the database is managed, the reason for having Oracle declines. Oracle has its place, but it is overused because it is considered the standard and IT departments are comfortable with it. But most Oracle databases are used far below Oracle’s capabilities. And databases like PostgreSQL or MariaDB or AuroraDB now cover the vast majority of most company’s needs.

Steve Lucas’ Facts?

Here Steve Lucas presents what he calls facts. Let us review his list.

A few facts:

HANA is an ACID Database!

“SAP HANA is a fully ACID compliant database”

All the databases that HANA is competing with are ACID. This is like saying that a car competing with another car has “wheels.”

HANA is Entirely Loaded into RAM?

“HANA’s design manages and accesses data completely in RAM allowing for speedy retrieval of data over massive volumes and addressing the BigData problems of today and the future.”

False. This was the original presentation of HANA, but the data is swapped in and out of RAM with HANA. It is just a misrepresentation of the database.

HANA Does Away with MOLAP?

“HANA does away with the need for MOLAP, tuning structures such as multiple indexes, aggregates, materialized views, and saves the costly time to build and maintain such structures.”

Yes, that is true. That is the benefit of the column-oriented design. But IBM, Oracle, and Microsft also now have this same capability.

HANA has Super Efficient Queries?

“HANA leverages parallel queries to efficiently scale out across server nodes as proven in our April 10 scalability testing announcement in which 100 TB of data partitioned across 16 nodes was queried with sub-second response time.”

First, Steve Lucas has no idea what this sentence means. But if we evaluate the sentence on its merits and leave Steve’s knowledge out of it, if this were true, it’s not showing in our analysis of both public and private benchmarks. SAP is not the performance leader in any category versus the competing offerings.

HANA is a Good Place for Unstructured Data?

“HANA handles both unstructured and structured data and has since its inception.”

All databases can do this. The question is whether the database is the right one to use. Due to HANA’s high cost per GB, it will not be the right DB to store unstructured data. That is why SAP introduced Vora, to connect HANA to Hadoop. But Vora is dead in the market.

HANA Can Store Non-SAP Data?

“HANA handles both SAP and heterogeneous data equally well.”

Well, data is data. The database is not going to care what application the data originated from. But HANA is not used to store non-SAP data, because HANA is only sold into SAP environments.

Oracle Can’t Scale Beyond One TB

“Oracle has not demonstrated how Exalytics with TimesTen can scale out beyond the 1TB limit and Oracle has publicly stated that the usable memory in this configuration is about 300GB.”

Not sure what to say to that.

HANA is Super Innovative?

“HANA does, in fact, support ANSI standard SQL syntax, as well as MDX. Just like Oracle extended the ANSI standard with their PL/SQL procedural language, SAP has extended the ANSI standard support in HANA with SQLScript, a procedural language that allows you to write programs with logic not possible to implement in the single-statement SQL language.”

“HANA allows you to manage your data as you choose in either column stores, row stores, or a combination of the two. (Plus other stores/models) Oracle’s claim that you must load data into the row store, and then migrate to the column store, is false. Not to mention their claim that columnar data must be migrated back to the row store to be updated and then back to the column store to be queried. This is simply not how HANA works at all.”

The bottom line: HANA is a next generation solution that replaces many of the tired, legacy products that Oracle continues to re-label as “innovative”.

None of HANA’s claims related to innovation regarding HANA have held up. It is highly unlikely that SAP, with its far lower database expertise, came up with a better way to manage row and column data that Oracle. But the point is moot because performing OLAP and OLTP from the database is both not a significant requirement for companies, and there is no database that can perform OLAP and OLTP optimally for both.

Our Conclusion on Section 1

One can go back and forth on each of these bullet points. Some are false. For instance, HANA is not designed for unstructured data and is not priced for holding Big Data. HANA is not a player in the Big Data market. HANA is priced per GB and is very expensive per GB, so even if HANA is good for unstructured data, it is too costly to place much data in HANA.

I cannot see why Oracle’s database is “tired and not innovative.” Part of what is happening is that Steve Lucas is commingling being immature with being innovative. Yes, HANA has more releases, but that is not necessarily a good thing. It means less stability and HANA can’t compete with Oracle 12c in the ways that SAP promised that it could. Oracle 12c has a far better reputation for reliability than does HANA and for fault tolerance.

#2: Comparison of Use Case Scenarios Between HANA and Exalytics

“The easiest way to find out how HANA is transforming our customers is by looking at the customers stories on saphana.com. Anyone can publicly see proof – compelling business case after case where customers are consolidating IT systems and delivering breakthrough business value with a lower TCO than Oracle.”

SAP would not have jerry-rigged these case studies, would they? For instance, would SAP place a case study on their website where the customer had a lot of problems with HANA or where it failed to meet expectations? I say this because I know of several instances where HANA failed to meet the expectations of different customers, but this did not seem to make it to the SAP website.

SAP’s History with TCO Claims

Second, SAP never estimates TCO. TCO calculators of various SAP applications and non-SAP applications are available for free at the following link. In each of the application categories where SAP had an application, SAP came out as the highest in TCO. SAP’s high TCO is why they have so many consulting partners. Deloitte, Accenture and IBM and others build their consulting practices around SAP for precisely the reason that they can make the most money on SAP implementations. SAP’s proposal about lower TCO is entirely made up, and in fact, any statement by SAP about TCO can be dismissed out of hand because SAP has lied so frequently in the past about their applications lowering TCO.

“I have a moral objection to this whole comparison Oracle attempts, as the mere existence of Exalytics is just a diversionary tactic. Oracle doesn’t want HANA digging into their RDBMS business or Exadata for that matter, ergo the attempt I mentioned at the beginning of this blog.”

If Steve Lucas had any morals, he would not be a top executive at SAP. Also for a person with such high moral standards, he indeed lies a lot when he writes. Therefore, this statement regarding any moral concern must be false. And secondly, Oracle’s comparison between Exalytics and HANA is quite logical, for the reason that HANA is a specialized analytics database. It’s difficult to see why Steve Lucas can’t see this. But Steve Lucas might want to ask people at SAP that know about databases, why SAP stopped releasing a transaction processing benchmark for HANA.

Nothing just written should be taken as an endorsement for Oracle’s morality, it is well known it has none.

Steve on What HANA Supports

“Let me state (again) that SAP HANA supports analytical functions (e.g. all datamarts – e.g. T-Mobile’s use of customer micro segmentation analysis across millions of customers, across SAP and non-SAP application systems), business functions, planning functions and predictive functions (SAP BusinessObjects Predictive Analysis and Predictive Analytical Library in HANA) as well as transactions natively (e.g. upcoming SAP ERP on HANA). To do this in Exalytics you need – TimesTen, Essbase, Endeca, Oracle RDBMS, etc. This amounts to more money for Oracle and no business breakthrough for the customer…not exactly a “win-win”.”

Support is a different word than “excels at.”

Any database can support virtually any application. But the question is whether it does it well. It turns out that HANA is a poor match for S/4HANA, but this not yet a problem, because five years after this article was written S/4HANA is still not ready to implement.

This falls in the conventional approach of simply accepting because SAP offers something or supports something that it must be good or worth using. What other vendor gets that kind of slack cut for it?

Steve on What Scenarios HANA Can Address

“What Oracle doesn’t tell you about SAP HANA is that it addresses scenarios that were not feasible before, even with an armada of legacy tools – for example with the business function library in HANA it is now possible, using standard SQL, to execute in-database processes and functions that could not be written in SQL before.”

Steve Lucas has swung and missed on far more straightforward assertions already in this article. How would he possibly have the background to know if this is true. And this may or may not have been right in 2012, but again Oracle 12c has things that Oracle 12 did not have.

SAP BW Will Not Need to be Recoded for HANA?

“With respect to SAP BW customers, Oracle has argued that customers would have to re-code BW applications to work on HANA.This is simply not true, and we’ve published numerous public statements from our customers that have already migrated to BW running on HANA in production.”

No, it is true. And here is why.

BW is based upon a relational design, but it uses emulated cubes based upon a star schema. BW is one of the least productive report data structure applications that I have used. There are plenty of bad ones that come to mind, such as IBM’s near dead Cognos. However, BW absorbs massive amounts of human resources and produces very few reports. A lot of what BW does is take flat files and make them into a star scheme, which is called and InfoCube in BW. Then queries are run on the InfoCubes. Star schemes, or as SAP calls them in BW, InfoCubes speed read processing. These InfoCubes are rendered unnecessary when a column-oriented database like HANA is used along with BW because the column-oriented design and the memory significantly speed the read. However, the problem comes in that the customer has already spent great amounts of money to build all of these InfoCubes. InfoCubes that are no longer needed. So what is to be done?

Justifying the Investment into HANA

To explain the investment into HANA, but not undermine the investment into the InfoCubes, most customers that put BW onto HANA simply keep using the sale InfoCubes. But when new aggregations are necessary, the BW resources runs merely the query against a non-cube based structure called an InfoProvider. Essentially the BW is in contradiction with HANA, because the BW was created to run on a relational, or more accurately a row-oriented database that was not optimized for analytics.

Therefore, one can dispense with recoding BW after moving to HANA, but there is a natural conflict between BW and HANA. SAP may have published numerous public statements on the topic, but the problem is that most of SAP’s public comments tend to be either false or misleading. The fundamental conflict between BW and HANA will of course not be addressed by SAP.

Our Conclusion on Section 2

Steve Lucas is attacking the reader with an unending list of false contentions. The only things that Steve is pointing to that are right, are also true of the databases for which HANA competes.

#3 – Pricing Comparisons

“Oracle has tried to publicly compare Exalytics pricing to HANA and the information presented is grossly misleading. Not only is SAP HANA less expensive in up-front cost than Oracle’s Exadata + Exalytics bundle, (plus all the derivative components you’ll need to make it work) the differences in total cost of ownership are substantial.”

The TCO of HANA and Exadata is Known?

Steve Lucas has no idea what the TCO of HANA or the TCO of Exadata is. Since SAP was established until this article was written, I have never seen a single credible publication on TCO by SAP.

HANA’s Pricing?

“We didn’t just innovate on the technology platform with SAP HANA, we innovated on pricing as well with a straightforward, simple to understand model based solely on the amount of data held in memory (Unlike Oracle which charges per CPU plus test and development environment fees.) A single unit of HANA (1 HANA unit = 64 GB of RAM) includes the FULL production, test and development licenses a customer needs. It also includes the data modeling and management tools needed to get data into HANA and actually use the product. Even better, HANA gets cheaper over time…the more you buy, the more the list price per unit reduces.”

Putting Business One on HANA?

Wow. This is a lie. HANA is exorbitantly priced. And SAP has not been transparent about the pricing but has instead been publishing information meant to give prospects a misimpression of the amount HANA can be reduced in its footprint. SAP has been utterly opaque about what HANA costs, as they have endeavored to hide the real costs of HANA from customers.

“Our customers running SAP Business One can purchase a HANA license for as little as €2K. Any customer can purchase a license of SAP HANA Edge Edition for €40k. We also have the SAP HANA Netweaver BW edition for as little as €13k per HANA unit. (64GB of RAM = 1 unit)”

HANA’s Hardware is Not Expensive?

Why would any customer put BusinessOne on HANA? BusinessOne is targeted towards smaller companies that purchase BusinessOne because it is relatively inexpensive. Why would a price sensitive company like this put BusinessOne on HANA, a database that is both expensive to buy, but also very expensive to maintain? Even the pricing Steve Lucas is putting forward here does not match the pricing list from SAP in any way.

“I am certain Oracle would cite that hardware is extra, so let’s cover it right now. HANA servers from certified partners like Fujitsu are available for as little as $12K. That’s because we don’t force our customers into one hardware stack and then overcharge for it. We have certified partners like IBM, HP, DELL and the list goes on and on for HANA. We believe that the Intel platform, combined with the continued commoditization cycle we’ve seen for the last 40 years in computing will win…period.”

Even if the hardware were free, it would not make up for the other costs associated with HANA. I was unaware that SAP hardware is somehow more cost-effective than hardware purchased for other applications.

“Even with rapid growth of data, 95% of enterprises use between 0.5TB – 40 TB of data today. For this market, at the low end (0.5 TB) the combined cost of hardware and software is approximately $500K and at the high end the pricing is comparable to Exalytics alone today. In a recent test, we ran a 16 node cluster of 100 TB of uncompressed data, read more in the SAP HANA Performance Whitepaper.”

I think Steve Lucas should have provided more detail. There are a lot of details to this. Exalytics is expensive, but HANA seems to work out as the most expensive database available. But HANA’s features and performance don’t match up very well to the databases that SAP compares it to.

SAP Will Win?

“As I said when I started this blog, SAP doesn’t usually comment on competitor FUD, but I wanted to pause and be clear. SAP will win this market because we rely on fact and figures, real performance and customer success.”

So far, SAP has not won in the database market. SAP has picked up market share, but it dramatically lags Oracle12c 5 years later. Of course, it is not clear what time horizon Steve Lucas was forecasting. According to DB Engine, a website which tracks the popularity of various databases based on things like media mention, support tickets, etc..HANA is only the 19th most popular database in current usage. This is right around MariaDB and Hive. Furthermore, looking at the popularity value, Oracle is 28 times more popular than HANA. And moreover, DB Engine is most likely overestimating HANA’s actual usage, because it is measuring things like media mentions, and SAP has an enormous ability to get media attention on HANA. For example, one hears less about applications like MariaDB that are far more widely used than HANA (and also free by the way)

SAP Delivers Innovation?

“We are going to continue to deliver real innovation and let customers decide who can better help them build the future, not continue to invest in re-packaging the past!”

SAP does not deliver innovation. They are a marketing company filled with blowhards like Steve Lucas that will say anything to continue to collect millions of dollars of stock options. This innovation narrative is becoming extremely old, and it overshadows real innovation which happens at other vendors, notably smaller vendors. At Brightwork we have given only four applications perfect scores for innovation, and none of them were large vendors.

Our Conclusion on Section 3

The same as our conclusion on Sections 1 & 2.

Overall Conclusion

Steve Lucas is an untrustworthy source of information on HANA. He was certainly not the right person to write this article, and it was one of the lowest quality and least honest articles I have read in a very long time.

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Disclosure

Unlike Steve Lucas, Brightwork Research & Analysis has no relationship with SAP. We were not paid by SAP or Oracle or any other vendor or entity to write this article.

John Appleby should have declared that he was releasing SAP marketing information to get business for HANA implementations.

References

https://db-engines.com/en/ranking

*https://blogs.saphana.com/2012/04/30/what-oracle-wont-tell-you-about-sap-hana/