>> Narrator: Congratulations, Reggie Jackson. >> Certainly in the moment, is about what are youth is and who we are today as a country, as a universe. You are CUBE alumni. Live from San Francisco, it's theCUBE covering Oracle OpenWorld 2016. Brought to you by Oracle now here's your host John Furrier and Peter Burris. >> Hey welcome back everyone we're live here in San Francisco at Oracle OpenWorld. This is SiliconANGLE Media's flagship program, theCUBE, where we go out to the events and extract the signal from noise. I'm John Furrier, co-CEO of SiliconANGLE Media, with Peter Burris, general manager at Wikibon research, and Head of Research at SiliconANGLE Media. Our next guest is CUBE alumni, Chuck Hollis, Senior Vice-President of Infrastructure at cloud and storage. Welcome back to theCUBE. >> It's always a pleasure. I always have a good time when I'm here. >> So the best part of having you on is you've seen the movie before, you've lived it on other teams, you're now at Oracle, what, two and a half years? >> Chuck: One year at Oracle. >> Almost two years, so -- >> Chuck: I'm not dead yet. >> I don't think you -- >> What's that mean? Let's explore that. When will you be dead? >> You're looking good right now. You actually look like you been working out. >> A little tan, like you, like you, you know? >> So is it the country club here at Oracle? >> No, no, no. >> Chairs spinning at five o' clock? >> I'm up early and to bed late and weekends included, right? >> Well, certainly, Dave Donatelli's here, and a team of people really ramping up, essentially engineered systems, AKA hardware engineered in with the software. >> Both, in the cloud, and on premises, right? >> In the cloud and on premises. Clear, end-to-end oracle solution, which will, one, be optimized to run on Oracle, or -- >> Among other things, yes. >> So give us the update; what's the new announcements today? >> So Larry from onstage was very proud to talk about our new gen-two infrastructures of service, and our belief is there's a gap in the market. We have people doing public cloud, right, which, basically, is Startover, Azure, AWS. No chance of an on-prem solution. We have the private cloud guys, basically a Vmware shop, infrastructure only, no pass no nothing, and certainly not a lot of choices if you want to go to public cloud. We think that Oracle's doing a good job of creating that third option. Here's a combined, integrated strategy, on-premises and in the cloud, same technology, same set of capabilities aimed at enterprise applications that basically works the way enterprise IT needs it to work. So this next-gen two infrastructures of service is kind of the first peak of this massive investment we'd be making making entirely new infrastructure cloud that meets the needs of enterprise IT. >> So is this a reboot, or is this an extension of where you guys were? Some were, analysts were saying, not us, but -- >> Chuck: Ah, you'd never say that. >> Well, they said, I was using their words. Holger at Constellation said it's a reboot of their other infrastructure service, so he didn't want to say it failed, implied a transition -- >> Well, I wouldn't say it failed, it's more like a leapfrog. >> John: Explain. >> Oracle got into this business software as service, rather than standalone Sass packages, they worked on integrating everything tightly together, unifying the company. That was followed by platform as a service, aimed at 9,000,000 Java developers around the planet and everything they do. Infrastructure as a service was just made separately about a year ago. We got into the market, we learned a lot of things, but we also realized that we could actually start over again. We look at the engineering team, it's up to about 400 people who are building this next-gen IS, are all ex-Amazon, all ex-Azure. This is not their first infrastructure cloud, and because they were handed a blank piece of paper and said, "you can start over again," it actually is pretty exciting what they've done architecturally. >> So there's got to be something Oracle's doing that's distinct, so just for any number of reasons. Oracle has a lot of existing customers that're running heavy-duty enterprise applications. >> Chuck: Yeah, the tough stuff. >> The tough stuff, so talk to us about how the tough stuff is going to end up in the cloud. >> I think you bring up a good point. One way of looking at it now is that the easy stuff is gone. Desktop has gone to Office 365, and those kids from college are playing with AWS, and maybe I've got some generic workload consolidation sitting in the back room with a private cloud. What about those hairy applications, the demanding databases, in-memory analytics, the big to-do workloads? Where are they going to go? Well, what you see with out infrastructure-to-service is that we're actually providing two capabilities. We can run all of those through our cloud using those exact same technologies that we're running on-premises. You're probably familiar with products like Exadata. Well, you can buy an Exadata. You can use the Exadata in the Oracle public cloud, or you can consume it as a cloud machine, something we call "cloud-to-customer" on premises. And I think that's an important differentiation. A lot of this market is focused on consolidating generic workloads. That's more moderately interesting to us. To your point, what we're really interested are the big, hairy ones. As I joke, these are the ones that have vice-presidents attached to them, right? Yeah, the ones that people really care about. >> Peter: And typically eight figures. >> Depends on the size of the company. Like, Mark was interviewing a lot of people, a lot of customers this morning, and some of them were not large shops. >> But even those partners that're serving those customers often have eight figures associated with their investment in Oracle as well, so it cascades out through the entire industry. But it's also, I want to ask you this, Chuck. It's also not always the applications that have to be brought forward, but we were talking about ageism and it's always better if it's new, but there's a lot of skills in the industry. It's not a question of we want to bring them along. That's still where a lot of the value's being created, so talk about how this third way is going to make not only existing customers and existing apps, but also existing skill sets more rapidly develop inside and experience the expertise with these new technologies. >> I think that's a very good important because any IT organization's only as good as their skill set portfolio. I think anybody who's worked with IT understands that. By the same token, look at the portfolio. Walk into an average IT shop. Here's the stuff that was built decades ago. Here's the stuff that's kind of modern client-server three-tier. Here's the new stuffs that were using containers and microservices. If you're going to be an enterprise cloud provider to that IT shop, you got to support the old stuff, you got to support the kind of current stuff, and you definitely got to give a little pathway to the new stuff, and give me the ability to evolve that portfolio, and peoples' skills forward at the same time. This is what my big arguments that most public cloud providers is public cloud is easy. Just blow everything up and start over in our cloud. Well, as attractive as that might sound, that may not just be a financial reality for the majority of IT organizations. >> Yeah, operationally, too, they can't run their business. So so much for the container stuff. Ravello was the new container cloud server. >> Two things. So we have Ravello and we have a new container cloud service. So we'll put that on Ravello. So we all know hypervisors virtualize hardware. Ravello virtualizes hypervisors. What it does is it comes in to a VC or KVM environment, lifts it up, strips off the hypervisor, encapsulates the network to storage and the compute, then you can actually choose your cloud. You want to run it on AWS, you want to run it on Google, or do you want to run on the Oracle cloud? And it'll show you the prices for each, and you can shop there, so the reason we think that's interesting is nobody really wants to get locked into anybody's cloud, and if we can give people workload portability through VMs, that's great. Well, that's for stuff that we wrapped with virtualization. What about the new containerization? Well, trick with containers is container management, and today, if you want to do container management, you got to graft some open-source stuff and basically build your own. What Oracle has done is created and end-to-end container management service that says, alright, if you really would like to build your own, have at it, but in the meantime, here's something that kind of works. We can do that on-premises, on our cloud machines. We can do this in public Oracle clouds. We have this fast-burning desire to do this on other people's clouds just as soon as we get our own stuff sorted out. But it's the same thing. If I'm developing an application, Oracle has to go compete for that infrastructure business. It can't just say, well, you're an Oracle customer, you have go on all our stuff. And it would be the rare IT leader that would accept lock-in at the cloud level. >> There's no reason to do it today. There's absolutely no reason to do that. >> They may choose to go with us. >> But even if they choose to go with you, they want to do so in a way that doesn't force the lock-in. >> We all flew here, did you pay attention to the flight attendant when she showed where the exit rows are and everything? You may not plan on using that, but it's nice to know they're there. >> And it's nice for you to know where they are, too. Because you guys have learned that to stay at the vanguard of the industry, you have to be always aware of who's about to eat your lunch. >> And I think the Oracle database did a good job back in the day, and still to this day of being affordable. You can invest in the database, it can go wherever you want. And we're trying to do the same thing for that application ecosystem. And we're trying to involve three categories. The old, legacy stuff, the somewhat contemporary stuff, and the emerging containers, microservices-based stuff. >> So talk about your partners, because I know that something that we've been talking about on theCUBE a fair amount is -- >> Partners, we got lots of them. Infrastructure partners in particular? >> John: Well, Centure has an announcement. >> There's a disco party going on behind us here. >> There sure is, unfortunately theCUBE sign's in the way. Otherwise I could participate in it. >> I can see. >> But come back to this notion of a lot of the value that has always been created in the Oracle ecosystems has been created in partners. I have this theory, we have this theory at Wikibon that ultimately there will be more examples of college suppliers being created by your customers and your partners than by individual like AWS and Oracle and Microsoft. >> So Oracle's always had a very rich partner ecosystem. Applications, development, to infrastructure. And the exciting thing that I'm seeing with out partners is like they're seeing opportunity. So let's say that you have this cool vertical application. Five years ago your were selling on-prem hardware with all that entailed. Now you can run the in the Oracle cloud and simply sell a subscription service to your customers. You've evolved your business model forward. Folks that we partner with do application development. They have a platform now for application integration where they have vastly more capablites as opposed to the old school, got to go build it, got to go assemble it, etc, etc. The people who're feeling a little threatened by all of this not surprisingly, are the box-shifters, right? They're guys who just move hardware from A to B. And we're working with them, it's like there's still opportunity there. You just have to look up the stack a little bit. Their skills are still valid, they're just not assembling hardware. >> And you got a Centure announced that the business groups taking the infrastructure-to-service products out, that press release went out today. We covered that. >> I didn't know if that went out yet, but thanks for confirming. >> Oh, maybe that was embargoed, oops. >> Roll back, roll back, roll back. >> Put that back in the model, live TV. >> Centure, all these guys, they want to provide more value to their clients, and 10 years ago, that was stitching together hardware. Now it's about teaching them how to intelligently consume cloud. And I think what these partners like about the Oracle offering is designed to work the way enterprise IT works. It's not this, hey, here's our model, take it or leave it. >> One more thought on this, that there's a difference between the traditional, as you said, three-tier infrastructure, client-server innovation center, and some of the new analytic stuff that's on the horizon. Talk about how you guys are specifically focusing on some of the new analytics applications that are on the horizon coming into the cloud and how you intend to make the two worlds work better together. >> So I think that's great. Old-school analytics we used to call data warehousing, and business intelligence. That hasn't gone away. If you look back five years, it was all about big data, and mining values. Now we're moving to a phase of real-time decision making. Welcome to in-memory analytics things as fast as they can be. And once you figure out how to monetize data, it's addictive, you just want to do it faster and faster and faster and faster. Also, we're talking about relatively exotic infrastructure, right? Multi-terabyte memory spaces, shared Numa architectures. Pretty hard to go down to Best Buy and find the hardware for that and go build that, so as people start pushing the envelope, they're looking more for on-prem engineered solutions or more often, what can you do for me in the cloud. Interestingly enough, we talked about this gen-2 infrastructure service. One of the things it's very good at is having enormous memory spaces and very fast to compute, this kind of bare-metal compute we're seeing in real-time analytics. I think the other factor on this is internet of things, forgive me for playing buzzword bingo, the easy part is gathering the data. The real-time decisioning and actioning on it, that's heavy computing. >> Peter: And delivery with control. >> Yeah, delivering with control. You've got 10 million gas meters. Okay, how do I reason over that in real time, right? That kind of thing. >> So I had to ask you, we've been hearing about this spark-based exadata, what it's all about. What's that all about, is it a new product? >> Another member in the family. So you guys probably know the headlines on the spark chip has a couple of unique talents. It's got 32 encryption processors, so it can encrypt in real time, no delay. Has this ability to take queries and run them in silicon. It also has the ability to compress and decompress memory for in-memory analytics. So the exadata is basically a purpose-built, engineered system for database, so by taking our processor technology and putting it in this purpose-built machine, it gets a whole bunch of new talents for no more money because again, that's part of our differentiation. Things I've learned since I've been a year at Oracle is it's nice to have your own chips. Sometimes they come in very very handy as you build differentiated solutions, so I think exadata customers will have a new option, and I'm sure in the fullness of time it'll be available in our public cloud, it'll be available as a cloud -- >> But this brings up a good point, though. Intel was on stage yesterday, gave the same old corporate pitch, didn't really learn anything new there. >> Chuck: They had nice slides, though. >> That Ian Bryant's awesome. But the thing is, and Larry said that I find compelling is now that I can get your thoughts on it because it kind of comes back to the hyperconversion trend, which is he said, "we are going to provide it faster and cheaper." So he's clearly looking at infrastructures, bring this thing down, cost down to zero if possible, while performance he wants to bring up to a whole other level. How are you guys going to do that, what's the strategy? >> I think Larry and Oracle have the ability to invest like crazy. Don't forget, we build our own hardware. We build our own servers. We build our own data center fabrics. We don't have to buy this stuff from anybody. We build it, so Larry and the team, a couple years ago set this team up with a mission to go compete. Now if you've looked at Amazon, AWS margins, you know there's a lot of fat there. They're also running on really old stuff, the basic architecture was designed 10, 11 years ago. I don't want to throw aspersions around, but you could call it legacy cloud, right? >> John: What do you call it? >> Legacy cloud, anything 10 years or older, it's got to be legacy. So there's a clear opportunity to go build something new. That being said, this is a big boy's game. This is not let's round up a couple million dollars of VC and build a new cloud. So to look at the aggregate spend Oracle's putting behind this infrastructure -- >> Well, you just said the big boys are public, like Rackspace, they couldn't make it, right? So you're starting to see, they were a little, kind of a big boy, I mean... >> They're reasonable out there. But look at it this way, Oracle's got a national software franchise. Much like Microsoft does bring people on. We build our own hardware. We build our own data centers. We actually can become a vertical supplier in this and the argument is efficiency is result. >> So we're going to see Dave Donatelli on Wednesday after his keynote. I know he's prepping up for that. How's it going with Dave, what's going on with Dave? >> Dave's having a good time. I mean, we all came to Oracle on the same premise, is that the industry was rotating, and I think we've seen that in some of the analyst numbers, less and less on-premise spend, more and more spent in the cloud. >> A lot of new hires coming in from an industry that we know on Oracle, pre-existing players. >> And if you asked 'em five years ago if they ever would end up working for Oracle, they might have not said so. >> John: You're being polite. They'd say, "no friggin' way." >> Go through your mind and think what are the traditional on-prem IT vendors that transition their customers to the cloud? It would be a very short list. >> So you buy the whole cloud-broker Dell technologies? >> They don't have a cloud. I think customers want to consume cloud. >> Bing cloud air network now has 4,000 cloud providers. >> All slightly different, all slightly different. >> All working together with hypervisor. >> It's like a big portfolio management company. >> Is that a chess game, or is that just hail Mary? >> Vshpere was designed for the data centers. EMC bombed 10 years ago. Our tech's designed for the data center, and it wasn't designed for a world where people don't want data centers anymore. So I think VM ware's very challenged because their technology and business model is standing up viable public cloud options. The last big one was, oh no, we can't do it. We'll go to IBM. What's your cloud strategy, VM ware? Call IBM? That's kind of a rough deal on a sales call. >> Well, if you put it in the context of a V-cloud air network, you could argue that they're giving up the cloud. Basically, VM world, they said, "we're done with the cloud." they yielded -- >> Peter: I don't think they said that, John. >> They yielded that they weren't going to have their own cloud. >> Absolutely they yielded. >> They yielded on not having their own cloud. >> Okay, they yielded on their own cloud, that's what I meant. >> Nothing more than kind of a boutique offering, and certainly there's a market for small regional service providers around the world. No argument there. And there's a natural tendency, but as I look at people going to cloud, the sticking point isn't the hypervisor, the sticking point is the database and the applications, the middleware. This is something Microsoft has done brilliantly with Azure. >> Larry pointed out that's Ernie's call. Microsoft's well ahead of Oracle on migrating their install base half into their cloud. >> And that's what you guys have to try to figure out how to do as well. >> We're well along the way. But the point is that without that franchise, that's a tough road to hoe, right? The infrastructure guys maybe, the applications guys are the ones you want to talk to. >> Peter said, I'd like to get your thoughts on a comment Peter made on our intro with Matt Eastwood from IDC, everything's on the table. Ecosystems, channel partners, >> Chuck: And we're shaking the table apart. >> So if you have the gravity, an Oracle face of the world that's a suite, which I think is a little bit orthogonal to where the cloud is, but I get the language of Oracle the suite. Is it gravity around the suite, not a winner-take-all? >> You got to be able to pick off pieces and they have to stand on their own. >> You could build a ecosystem around that, and open ecosystem, so that means a new lock-in spec is stickyness, or pure performance, or not, am I getting that right? >> I think Oracle's going to try to play on both sides. If you appreciate the value of the suite, the IAS working with a pass, working with a Sass, great, we have all those pieces; pick and choose. Larry made it pretty clear. He wanted to go head-to-head on iops, memory and core, and dollars per whatever. Oracle intends to feed on that as well, so it'll be interesting to see how this plays out. Nothing like a low price to get an IT buyer -- >> Well he said, and the word he called this is interesting, he was overselling in my opinion, I've heard Larry. >> Chuck: Larry? I can't imagine he'd do that. >> Larry was overselling on their earnings call, but I don't think the analysts understand, they don't see the long game. You look down the 20-mile stare, it just hasn't even started for Oracle. >> Larry is a master at the long game in ways that I'm just now starting to appreciate. >> Well, let's be honest. What is the most sticky thing in the industry? Your applications, that's the stickiest thing in the industry. After that, the developer ecosystem and then you get down to the hypervisor, and you get down to the first -- >> Chuck: And then you get to the wires that connect it together and all that kind of stuff. >> But the most sticky thing is the businesses are still run around some of these floor applications. >> Well, that's why I brought up the suite angle, because I think that the developer angle is sticky because agility has proven that not everyone can build a killer app, so for instance, with an HCM there's probably some feature of HCM that is sub-par relative to some genius entrepreneur that eats, breathes that one feature, has an app, that could be integrated into that feature. >> I think that's your point, and with the platform-as-a-service offering, oh, you want to add it, do something different, great. Yes, exactly. >> It's all a continuous development, continuous integration, but that continuity still is close to the application. >> Yeah, ecosystem to me is, I've heard talks about what the developers' market, go-to-market strategy is. If that's in place, Oracle could have a very robust -- >> We're seeing the both the same thing on the hardware and the software. So hardware, build-your-own, is starting to get out of bow, ya know? Less and less popular buying servers and storage and knitting them together. A lot of guys still buy into that, but that market's going down. I think you're going to see the same thing with software and applications. Rather than starting with a blank piece of paper, where are the big chunks of enterprise functionality that I can grab out of the box and build the thing -- >> Reused, preexisting applications. >> Yes, yes! >> Everybody's talking about business capabilities, right? And the idea is that this capability is the things that I have to do to perform the activities to fit my business needs. And those activities are people, and increasingly, software. And being able to grab those capabilites and pick parts of them from the industry and weave them together quickly, continuously sustained, the match with the marketplace, to your point -- >> Well, we're going to have Juan Luzon next, and we're going to go deep on this, but I think -- >> That was a great guy. >> The API economy, if anything, showed us one, security is FUBARed and needs to be fixed fast, and the encryption on a chip thing has been downplayed. I don't know why Fowler's not getting more airtime on that. That's a really huge thing, but the API economy has proven that this ability to pull stuff that someone else has already done, not assembling like a junkyard kind of situation, why build it if someone's got to get it though an API? >> You talk about giving capital management, right? And you know, there's 175 functions, I don't know, some large number of function there, they're fine. I need this one little thing, so I'm just going to extend it, and still do it in such a way that I'm not developing -- >> And a developer who does that becomes a feature in a bigger pie. I mean, he'll make more money, doesn't go out of business, doesn't try to go public. >> So I wanted to share, before we wrapped up, one interesting thought. We all talked about cloud is coming, cloud is coming. I actually got tangible evidence at the beginning of the year that it's here. So a new word was given to me, cloud quotas. Cloud quotas, and it was kind of funny. This is happening mostly in the larger banks. Senior management, executive management, you're a little slow on this cloud thing. Let me help you out. We'll set a strategic objective. Five years from now, how much did we cloud-spend? This year, your cloud quota is 15% between cloud and non-cloud spent. Next year, etc, and I think what we're seeing is that kind of like the gears are starting to rub, between the businesses says, guys, this can't be so hard. Let's get on with it. >> I'm sure your sales guys have cloud quotas, too. >> Different kind of cloud quota. Different kind of cloud quota. >> On that point, 20 years ago, when it became very popular to pay executives on the basis of RONA, return on net assets, it was right about that time that outsourcing got popular. >> Shocking, isn't that, your mess for less, right? >> Sounds like cloud. >> Okay, bottom line, for the folks at home, Oracle's infrastructure stuff that you're involved in is not new, but it's growing now because it didn't have a lot of nurturing. It was always kind of like that back office secret sauce. What's the update, give a quick update. >> We want to give people a strategy for their enterprise applications for cloud. If they want to consume on-prem, great. Engineered system's cloud equivalence. You want to consume off-prem, same set of capabilites and more in our public cloud. You want to consume the public cloud in your data center, that's a cloud machine, and it oughtta be the technology stack and the set of capabilities. Geographical location, the consumption model really doesn't matter, and when we put this in front of large IT shops, and even smaller ones, they're like, this is great. I can build my architecture, I can build my strategy. I don't have to make a cloud decision now, and if I do make one, then I can undo it later. That agility has become very very attractive to people. >> I could invest in options but have a future. >> Chuck Hollis, Senior Vice-President of infrastructure, congratulations, and then Larry Ellison got to the end of his keynote, didn't have a lot of time, but there's a lot of meat on the bone in the keynote, that he kind of, he couldn't hit. Welcome to the cloud, too many product announcements. Welcome to Amazon's world. >> Peter: Seems excited. >> There's a lot of stuff coming down. It was great talking to you guys, thanks for your time. >> Thanks for sharing your insight and the data and the bits here. Here at theCUBE, we're always sending out the packets of content out to the network, live, original content. I'm John for Peter Burris with SiliconANGLE theCUBE. We'll be right back with more live coverage after this short break. >> Hi, I'm John Furrier, the co-founder of