 Mark Jarvis
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The computer industry differs in many ways from other established industries in the tenor of the dialog among companies. In fact, computer executives sometimes sound like trash-talking NBA stars, sticking it to their competitors with in-your-face comments.
As OracleWorld transpires this week, Oracle Chief Marketing Officer Mark Jarvis hopes to give Microsoft some grief with version 2 of the Oracle Collaboration Suite. In addition, Jarvis is calling OracleWorld a Linux festival, and touts the cost benefits of Linux/Intel solutions over Wintel and Unix platforms.
The sniping by tech titans does provide some bit of color in an industry full of acronyms and technical jargon, but in the end buyers are more interested in which companies are the best partners and provide product solutions with a measurable ROI advantage.
If it turns out that migrating from Microsoft Exchange to Oracle Collaboration Suite delivers the goods, then Oracle deserves crowing rights. It is the nature of this competitive industry to play a continuous game of leapfrog until someone drops out of the game. If beating Microsoft is what motivates Oracle to offer more value in its products, and the end result is bringing more benefit to customers, so be it. But I don't think Microsoft will stand by while Oracle or the open-source movement tries to eat its lunch.
In my interview with Jarvis late last week at Oracle's Redwood City, Calif. headquarters, he was not shy about criticizing competitors--including Siebel, WebEx, IBM, as well as arch enemy Microsoft-and projecting what companies will be left standing after further rounds of consolidations.
Jarvis also called Web services a fad, and doesn't believe the two camps--.Net and Java-will be able to interoperate effectively. And, he dismissed IBM's on-demand computing initiative as an attempt by Big Blue to copy Oracle. That seems like quite a bit of hyperbole.
We started off the interview talking about how the Internet has transformed the way Oracle does business.
Tech Update: How important is the Internet as a vehicle to reach employees and customers?
Jarvis: Totally. We generate more leads for our sales organization through the Internet than any other way. We used to run seminars in hotels and we switched to running them on the Internet as well as in hotels. Attendance at seminars on the Internet was ten times greater than attendance at seminars in hotels.
The payoff was that a seminar in a hotel cost us $350 per attendee compared to less than $1 for a seminar on the Internet. We were able to get 10 times more people at 350 times less cost. In addition, we had to run physical seminars around the world-on the Internet we run them once and people come in from all over the world.
Tech Update: And they don't have to come in at one time.
Jarvis: Right, we do them on demand and live. We also started noticing that customers were asking for live seminars in the evenings so they could learn and educate themselves after business hours.
Tech Update: You are also in charge of Oracle Broadcast, which includes online seminars as well as daily webcasting to employees and customers. How much is the webcasting used by your customers?
Jarvis: Our employees rely extremely heavily on the Web for communications. Keith Block, our head of North American sales, does a regular call with all of his employees-typically 4,000 to 5,000 people are on the call. He is talking and we are webcasting slides and you can interact on the Web. It's our primary form of communication. The economy is down, and we are trying to save money on travel, so everyone sits in their office and gets what they need.
Typically, we also do a sales kickoff once a year. In the past, we would pick a location and fly everyone to that location, and we would have 4,000 people in the same room. We'd tell them the message and Larry would give a speech. It cost us $10 million to educate our sales force for one day. This year, we asked them how they wanted to do it, and they said they wanted to be on the Internet.
Tech Update: Is there a downside to relying on a virtual Larry Ellison or Mark Jarvis?
Jarvis: I don't think so, provided you realize the Internet is different medium. You can't spend an hour giving a speech. You are restricted to 5 to 10 minutes, so you have to get your points across, and you have to rely on materials being available after the event. It has a benefit in that it forces every person speaking to actually think about the take away for audience because they only have 5 minutes to speak.
Tech Update: Like many other sites, Oracle.com has some customization and personalization features like myoracle.com. Do many users take advantage of those features?
Jarvis: Oracle.com has about 4 million unique users per month, but only very few use personalization features. MyOracle is more focused on employees than customers.
Tech Update: Would you recommend customers to personalized beyond corporate portals?
Jarvis: We haven't pushed it hard yet with customers. We have totally focused on doing it for our employees so they get access to their e-mail, calendar and files via the Internet anywhere in world.
Tech Update: This week you introduced a new version of the Oracle Collaboration Suite. What about this new version will cause customers to give it a look?
Jarvis: We will be announcing a program to take customers off [Microsoft] Exchange and migrate them to Oracle for $71 less cost per user than an upgrade to the next version of Exchange. In other words, with this new version 2 we can migrate from Exchange to our software for three times less cost than an upgrade to the next version of Exchange.
Tech Update: What does that cost include?
Jarvis: It includes rip and replace and 50 megabytes of e-mail per user. In addition, version 2 has a lot of new features to improve productivity, collaboration and administration, as well as to scale up the number of users per server. We are at about 40,000 users on a single server. There are also a number of new features to improve the collaboration aspects of the product.
Tech Update: What kind of approach are you taking with the collaboration tools?
Jarvis: A lot of companies provide online meetings, such WebEx. When take a look at where they are going, we don't think that they have done enough to integrate with the other productivity tools you use. For example, how do you integrate online meetings effectively with your calendar, e-mail, and with the files you want to share? Version 2 is focused on linking those applications together more logically. The integration allows us to innovate more, compared to companies that have separate pieces. If look you look at WebEx and Microsoft's products, you have separate pieces; because you can't integrate, you can't innovate.
Tech Update: Other companies can bring in files and integrate them with a presentation.
Jarvis: By having it all in one system we can make the user experience considerably better and lower cost to run.
Tech Update: How important is it to get away from the notion of monolithic applications to more of a portal concept in which you just select the pieces of applications and functions you need for your view of the world?
Jarvis: We are not so heavy on integrating applications as much as having common ways of representing data across applications. If you look at our E-Business Suite, it's a set of disparate applications that integrate on a data level. The sales system and marketing system are accessing the same data so they have a common way of discussing between the two. It's the same for our Collaboration Suite, integrating e-mail with files and voicemails.
Tech Update: Oracle hasn't been top of mind when talking about Web services. Do you plan to play a bigger role in Web services moving forward?
Jarvis: I have to be honest--we believe Web services is bit of fad. We don't really believe Web services will ever work the way people think they are going to work.
Tech Update: How do you think those people think it will work?
Jarvis: Lots of little pieces of application logic located all over the place, all connected together and communicating, flowing from place to place. We don't believe it will ever work.
Tech Update: Then how do you see Web services evolving in the future?
Jarvis: We have always believed that all integration done on a data level is much better than trying to integrate on the application level, and our e-business suite is a key part of that strategy. If you like, our Web services strategy is very much the same as everyone else's, but you keep your data in one place.
Tech Update: Will all these companies agree on standards and a level playing when historically they have rarely played together nicely?
Jarvis: The best way of predicting the future is to look at the past. There will be .Net on one side and a whole bunch of companies on the other side that go with J2EE and Java. Both standards will compete and survive.
Tech Update: Will the two platforms interoperate?
Jarvis: I would be very surprised.
Tech Update: Oracle is working on building back office applications using Java. Where does that effort stand today?
Jarvis: We don't believe that everything will be written in Java. At times you want a simple interface, and it will be written in HTML. For complex data analysis, for example, a Java interface is probably a little better than an HTML interface. You'll see a combination, and we have plenty of Java parts available in the applications we are shipping.
Tech Update: How does open source play into Oracle's strategy?
Jarvis: Our major contribution to open source is the clustered file system for Linux that we did with Red Hat, Intel, and with Dell to some extent. In fact, OracleWorld is going to be a Linux festival.
Tech Update: Why is OracleWorld a Linux festival?
Jarvis: Our picking on Linux, as well as Intel, has to do with getting the highest performance and greatest reliability at the lowest cost. We found out that Intel/Linux is considerably lower cost than Microsoft Windows 2000 and other versions of Unix right now. And, you can get it running on a bunch of cheap rack-mounted PCs with our real application clustering [RAC] technology and it never goes down.
If you take a look right now, the number of Linux downloads on Oracle.com far outstrips Unix and is slightly behind Window at this point. If the trend continues over next two or three months, Linux will be our number one downloaded platform.
Tech Update: About a year ago you launched RAC it with a lot of fanfare, betting the company on this technology for the future. How would you grade you progress so far on that initiative?
Jarvis: More than 700 customers are running RAC today, many in mission critical environments. Electronic Arts, for example, is running its entire online gaming system on RAC technology.
By the end of the year we will have our mid-tier applications, such as order entry, HR and e-mail applications, running on Linux Real Application Clusters.
Tech Update: What kind of cost savings are you getting?
Jarvis: The major cost savings is in hardware. If we need to buy an SMP machine to run applications, it can cost $1 million. The same amount of hardware with Intel/Linux will cost $40,000 to $50,000 per server.
Tech Update: Benchmarks seem to get a lot of attention from database vendors such as yourselves. Do customers pay attention to the benchmarks? Do they have any credibility with customers?
Jarvis: My opinion is they don't. The hardware vendor cares the most and our developer organization cares second most. Having said that, if we beat the crap out off the competition, we will rub their face in it.
Tech Update: You have using the Unbreakable as a marketing theme for the past year. Are you going to unveil a new campaign or theme?
Jarvis: No, we are still going to have our "Unbreakable. You may have noticed we switched from saying unbreakable to "Unbreakable Linux," and we still have variations such as like "Make e-mail unbreakable." It's working great.
Tech Update: What do you think of IBM's on-demand computing initiative that was just announced?
Jarvis: We've been calling it outsourcing our business online for three years. It's another attempt by IBM to copy us.
Tech Update: As you look toward next year, what are your biggest goals?
Jarvis: In technology, we are taking a look at the application server business. We currently have more customers than BEA. However, we have 200,000 customers for our database, which means we still have 185,000 customers who need to get our app server. Getting our existing installed base, many of whom are BEA's customers, onto Oracle 9i application server is a big thing.
Tech Update: Some of the vendors are basically giving away application servers as part of a solution.
Jarvis: That's IBM's entire strategy. Give away WebSphere and get the Global Services business from it. The way we respond is that we are lower cost than IBM and BEA on license prices. We don't look at market share numbers, we look at revenue. If we are half the [revenue] size of BEA, we are selling at least as much as they are because our price is half the price. We know in application server market we are doing better than most people think. We just have to get to the installed base.
Tech Update: What other goals do you have for next year?
Jarvis: For next year, the Oracle Collaboration Suite is extremely huge for us. Microsoft has changed its licensing policy and customers are upset. Secondly, Microsoft is about to obsolete Windows NT and Exchange 5.5, so customers have to upgrade whether they like it or not. We know we can migrate them cheaper than upgrading, and based on the last few months of efforts in marketing and push we have made in sales, the Collaboration Suite is looking good.
We'll also continue to move our applications into the middle market and smaller companies. We announced a big middle market effort in China. There is a booming middle market outside the U.S., and we will see those offerings come to the U.S. too.
Tech Update: Has IBM dropping the price of the midrange version of DB2 had any impact on Oracle?
Jarvis: I don't think it will have any impact at all. If you take a look at DB2 Workgroup Server Unlimited Edition, it doesn't compare with Oracle Standard Edition. You get what you pay for. It's not something we worry about at all.
Tech Update: What is your biggest challenge for next year?
Jarvis: The economy is the biggest challenge. We have one advantage-- we are large enough. We've looked at this economy, and the way we describe it to ourselves is that we and all of competitors are in the desert suffering. The one solace we have is that our water bottle is a lot larger than most peoples' water bottles. This economy is going to clean out some of our competitors.
Tech Update: Who do you think is on the bubble?
Jarvis: Ariba, Commerce One, I2 are all pretty much gone. I also think Siebel is going to go too-it won't survive more than three years. I the application business, we think it will come down to Oracle and SAP. In the technology business, it will come down to IBM, Microsoft and Oracle.
