Oracle CEO Mark Hurd says enterprises need to wake up in the cloud era
Oracle showcased the self-driving autonomous cloud database this week that fixes cyber-threats and computes data faster for an organisation going digital
The mood at Oracle Inc’s OpenWorld event was one of excitement about the changes that AI and Machine Learning would bring, thanks to the cloud.
The cloud is central to technologies that enable mass personalisation, and machine learning is seen leading the next industrial revolution, while sensors will monitor healthcare and manage autonomous cars. For companies such as GE and AT&T that use the Oracle Cloud, the future is in data. Microsoft, Cisco, Google, AliBaba, Amazon and Facebook portray a similar narrative.
“Global macroeconomics are not necessarily great,” says Mark. The global GDP growth rate is at 2 percent, and every company needs to grow faster than GDP, and only technology can allow that. “B2B businesses are slowing. Consumer IT is growing at 20 percent and growing faster than B2B IT, which is growing at only 1 percent,” says Mark.
So what does this mean? Mark says IT needs to be agile and must be deployed rapidly for customers to stay close to their consumers and businesses. "Only the power of the cloud and databases that are autonomous will allow you to stay ahead in the future."
Companies today are thus trying to squeeze out efficiency out of IT, and grow revenues. This is only possible with the cloud. Going digital today also means there is rapid data sharing on the network, which needs to be secure. "Business is changing from a traditional market share argument to using data to add value to customer experience," says Mark.
Traditionally, companies had to focus on higher revenue with lower spends, improved cash flow and risk management. They had to create new products, services and customer service. However, risk management is increasingly now the most important narrative, thanks to data theft. “Companies have to manage security attacks. Today, you have to run a business and simultaneously manage risk of attacks in the digital world,” says Mark.
He adds pressures to build a business are enormous today. “The tenure of a CEO today is only 18 quarters because they are not able to grow their companies because their customers are going digital and expect quick turnaround time in services,” says Mark. The tenure is falling as IT is beating businesses, and clients want faster and better results.
To illustrate the modern CEO's dilemma, one could look at a retail store. The store can no longer expect IT to capture sales - it needs to integrate customisation of customer experience and change supply chain to meet orders on demand in-store, and enable products to be picked up by the customer in other stores too. Oracle wants to power that journey from customer experience, to sales, to inventory management to managing employees in a seamless manner with data.
"Therefore, IT today is about performance and not maintenance, yet 80 percent of an IT budget is spent on maintenance and infrastructure management as organisations often manage twenty-year-old applications on ten-year-old infrastructure," says Mark. However modern companies have shown the way with disruptive IT and are using the cloud to deliver faster services. These companies, like Bloom Energy, Stripe, Warby Parker, and Houzz are disrupting their respective industries as they do not have legacy IT, and are able to use data efficiently to focus on customers.
“This will be more serious and companies cannot be dependent on humans to fix patches in different operating systems and databases during an attack,” says Mark. He says one needs to be ready now to have systems that can fight anomalies on the go. No wonder Oracle launched its autonomous driving database this week to free organisations from human intervention.
Oracle's customers spoke to YourStory on the sidelines, and said cloud was central to their transformation because technology allowed data to be crunched faster and business could decentralise strategic decisions on a day-to-day basis.
Power of the cloud and digital transformation
The cloud allows scale, security and optimises solutions, and Oracle today is positioning itself as one platform, one operating system, one database. “We fight seasoned and mature hackers every day. All the technology and capability has to make things more secure. All the analytics have to be built into these applications. All apps need AI and data need not be exported from one solution to another in our cloud,” says Mark.
The company’s R&D budget is $5.2 billion, allowing it to build on the platform and infrastructure level, he adds. Oracle aims to have a complete suite of SaaS applications, be a suite of PaaS Services, and next generation of infrastructure as a service.
"We are, in fact, playing to the prediction of Cisco and IDC, which say that by 2025, around 80 percent of production apps will be in the cloud. Only two SaaS companies will dominate the market, and corporate-owned data centres will decrease by 80 percent," says Mark.
According to IDC, already, the data centres have already declined by 15 percent from 4575 to 3873. Also, by 2025, app development and testing, and all enterprise data will be in the cloud, as will 80 percent of production apps.
Mark is not off with his comments; already, Caesars Entertainment has moved to the Oracle Cloud, and more are looking to follow. “It's good for business and security. We have a competitive advantage because we have moved to a cloud-based financial system. We saved millions of dollars thanks to the Oracle Cloud,” says Keith Ausey SVP of Caesar's Entertainment.
Randy Fur, CFO of Bloom Energy, says the company uses Oracle for all forms of data analytics to make their processes efficient. “Our tech enables customers to save on power bills by 20 percent.”
What has the cloud done for Caesars and Bloom? They have been able to crunch data faster to understand their business on a day to day basis. In the day of business intelligence tools, data would be available a week later and systems, to crunch data, would then run queries separately. This old system required huge IT resources to get information compiled. Today companies like Oracle, Zoho, and Microsoft are offering one unified platform to build apps and manage infrastructure with data analytics built in to the service.
Digital transformation, however, requires dedication as Paul Chapman, CIO of GAP, explains how he used scale to his advantage. Gap Inc is a 3,300-store, 400-franchises company operating in 90 countries. “We can design, oversee sourcing and plan logistics better than any other retailer around the world. Our ability to share knowledge across brands is great, from Athleta, Old Navy, GAP, Banana Republic, Intermix happens because we have data on one platform,” says Chapman.
The company uses mobile check outs and mobile commerce to redefine buyer experience. “We are a company that depends on the store business and we have to leverage mobile check out and also engage with customers on mobile to stay ahead in the digital world,” he adds.
All retailers look to delight customers, and GAP is no different. In India, Arvind Internet and Shoppers Stop are pushing this trend across more than 1,700 stores.
Today, from Oracle to Microsoft, everyone is betting on data and digital is the centre of everything. As IT budgets are cut, businesses are asking IT to focus on results rather than maintenance and application development.
Mark ends by saying the cloud is here to stay, and that business transformation will be led by the consumerisation of IT. In India, there are the likes of Swiggy that have disrupted food delivery, and Zoho making it easy for small business to scale up apps.
What is certain is that thanks to the autonomous self driving database of Oracle that uses machine learning to correct anomalies in data, the CTO and CIO's IT resources will be freed up. They can focus on using IT to build better services to customers by using a unified cloud platform that allows one to build applications, customise services and manage infrastructure, all under one dashboard.