Why Cloud is at a Crossroads

Executive Summary

• AWS and GCP have pushed the envelope on value and innovation.
• However, monopolistic vendors like SAP and Oracle want to redirect the cloud into up charging and waste.

Introduction

While AWS and Google Cloud keep improving the value for customers, the fake cloud entities, SAP and Oracle, are doing their best to confuse their customers about the cloud, try to make the cloud as expensive as possible, and maintain their account control. This is covered in the article How to Understand SAP’s Upcharge as a Service.

In this article, I will describe the pure cloud battle against those that would undermine the cloud. I will cover the fact that the hyperscale providers are partnering with highly corrupt consulting companies and the problems with executives leaving evil entities like Oracle to assume leadership positions in the hyperscale providers.

What SaaS or Cloud Is

SaaS and Cloud emerged as a more efficient delivery method of software that leveraged the web infrastructure and database capabilities called multitenant, which means that a single database could serve multiple customers. This allowed a significant reduction in the cost of managing each customer. SaaS and Cloud vendors focused on more straightforward applications, such as HR, travel, expense management, and CRM. These were applications that most companies could deploy without having to perform customization.

This is what I call the pure state of SaaS or Cloud. This is an important distinction between pure SaaS or Cloud and co-opted or faux SaaS or Cloud. There are several reasons, but one of the most important reasons why is contained in pure SaaS’s or Cloud’s multitenant architecture.

Multitenant Architecture

This was an essential point as customization meant breaking the advantage of having multiple tenants on a single server and a single database. SaaS applications should have just one code base for the software used by all customers. This is referred to as a multitenant architecture. Lower sales and marketing costs also defined SaaS and Cloud vendors. These vendors would allow customers to test their software by offering trials and to purchase the software incrementally. They often allowed customers to buy a single license on a month-to-month basis. True SaaS vendors want to get prospects to use their demo system as quickly as possible because it is their primary tool for turning a prospect into a customer. Faux-SaaS vendors use access to a demo system (either online or in the standard demo presentation) to move the prospect to a standard on-premises sales process.

Similarity to Gmail

Just as with a Gmail account, each entity uses the applications independently without conflict or issues, even while others use the same applications. Multitenancy is accomplished by setting up a separate database schema per tenant. Multitenancy is an essential component of SaaS. While the single-tenant design outsources the hosting of the application to a third party, multitenancy provides economies of scale to users’ management because only the data is separate. Pure SaaS vendors provide their hosting, and this allows them to upgrade their applications as needed. When another company performs the hosting, this may contribute to a staggering upgrade. When hosting is moved to a third party, it can indicate there may no longer be a multitenant environment.

Optimally, the customer should never even realize when their software is upgraded. For example, Gmail is often upgraded, but Gmail users don’t know when this happens because it is not apparent to the user. The same is true of Google Docs. A new feature is added, or some backend change occurs, and you keep using the application. Over time, you find out about the addition if you search through the help or receive an email from Gmail on how to leverage the change.

Fake Cloud

Many vendors who market their applications as SaaS are not truly multitenant because they are not operating from one codebase. There could be many different versions of the application running on each hosted instance. Good examples of this are SAP and Microsoft.  Accordingly, the one code base SaaS model is not as prevalent as so-called SaaS providers would have us believe.

SAP frequently talks about hosting applications itself, but the vast majority of its hosted applications are only the result of acquisitions initially designed for the cloud. The reality is SAP sells a few of its internally developed applications as SaaS to be hosted by SAP. This issue, for instance, applies in spades when Bill McDermott makes comments about how SaaS or Cloud SAP is becoming, but leave out the analysis that S/4HANA Cloud only has tiny customers. Or when Bill McDermott continually brings up its Cloud offerings such as SuccessFactors or Ariba but leaves out how neither SuccessFactors nor Ariba offers flexible terms like pure SaaS vendors do. For instance, here are the terms for AWS.

“AWS offers a range of Cloud computing services. For each service, you pay for exactly the amount of resources you use. There are no minimum commitments or long-term contracts required. This pricing model helps replace your upfront capital expense with low variable cost.”

SaaS and Cloud Patterns

Those are pure SaaS or Cloud contract terms. But SAP does not offer anything like this. SAP uses on-premises terms that they have become accustomed to and that lock in the customer, but they apply those terms as much as possible to their SaaS or Cloud applications. Additionally, SAP, by in large, does not provide pricing transparency. SuccessFactors was a well-regarded SaaS vendor even before it was purchased by SAP. However, SuccessFactors’ website has no pricing published and no public trial available. Before SAP’s acquisition, we checked back in 2010 and found no pricing published and no public trial available. So while SuccessFactors followed some of the rules of being a SaaS vendor, it is another example of a vendor that did not follow all SaaS rules.

I don’t want to overstate the optimality of pure SaaS or Cloud vendors as a dependency is created, and of course, they also don’t like customers to leave. Craig, one of the Founders of Arena Solutions, explains quite well how pure SaaS effectively aligns the incentives of the customer with those of the vendor.

However, if the SaaS or Cloud offering is faux SaaS or Cloud, then these incentives are not aligned, and one goes back to the misalignment that has plagued on-premises software, where the vendor has the incentive to sell the most software as possible whether it is implemented or not. Pure SaaS or Cloud vendors live on their rate of subscription renewal.

Accepting Cloud Washing

Those that cover SAP also miss out on reporting that a massive amount of SAP’s offering is not deployed on from the Cloud. That is, they allow Bill McDermott to present any story he wants without questioning it. And unsurprisingly, these same media entities also, in most cases, receive funding from SAP. In the example of S/4HANA, due to its ongoing development, it is not feasible for SAP to offer multitenant due to versioning. That is, different customers are using different versions of S/4HANA. This is why the following comment is entirely incorrect.

“However, there is no reason why a partner couldn’t duplicate this offer for its customers – even exploiting HANA’s multi-tenancy feature included as part of SP9.” – Diginomica

It turns out there is a big reason why customers won’t be able to address this. And that is due to versioning. And does Diginomica happens to be funded in part by SAP? So big surprise, Diginomics repeats anything that SAP tells it to say.

The Crossroads

Companies now want to move to the cloud, and the question is whether the on-premises vendors with basically nothing to offer for cloud services (that is, you SAP and Oracle) can use their marketing muscle and their control over their consulting partners, IT media, and user groups to get their customers to make bad decisions.

These are powerful companies that will get several customers to engage in huge cloud waste. Several years from now, articles will be written about how the cloud transition, in many cases, leads to no price increase or price increases. What will be left out from those articles is that SAP and Oracle added a significant margin on the actual cloud service, and they added that margin for doing nothing.

SAP’s Two Cloud Areas (Not Offerings)

SAP has two distinct areas of cloud service coverage. One is SAP Cloud. SAP Cloud is the portal through which companies can be upcharged on cloud services from AWS, GCP, and Azure.

The second area is called the “HANA Enterprise Cloud” or HEC, which is SAP’s name for what amounts to the outsourced cloud.

SAP has no interest in doing the hosting work themselves, and so they have opened the gates to any operator that will agree to allow them to keep a large margin.

Furthermore, because of the lack of quality control on the HEC cloud partner ecosystem, HEC is experiencing substantial failure rates. Oracle follows a similar cloud model to SAP. Is this the same thing happening with Oracle?

The Problem with Cloud Partners

Mark Graham states the following on this topic.

“What I have found is movement to the cloud often involves getting a “cloud partner” to help transition and then manage the systems.

What is little known at first is that these “cloud partners” have less expertise managing the systems than the companies had in-house.  The companies hoping to reduce overhead actually find they still cannot reduce or re-direct their in-house support.   Something else that happens is companies realize that the cloud is not as inexpensive as they once thought.  It takes in-house people to manage the usage of the systems to optimize cost savings.  Also, if a few errant programs/poor coding kick off they will find costs going up.  When they had “restrictive” hardware in-house they didn’t have to worry as much about this happening. The flexibility of the cloud environments is more limiting than they thought.  They have to pick what is available, get updates along with everyone else, and just can’t seem to get the cloud provider to work at 2:00 a.m. in the morning like they used to be able to do. The biggest reason to go cloud is to be able to scale and implement tools more quickly.  Of course if everyone is doing it you are not innovative. Finally, control over IP/data.”

And Ahmed Azmi in response to Mark’s comment.

“Thanks for sharing these lessons. I definitely relate especially regarding partner expertise. I have seen this unfold with some managed hosting providers. In one case, the internal IT backlog actually increased after the migration because change requests involved multiple teams in different time zones and no specialized product expertise. Your point about cost is spot on. Cloud is often more expensive than on-premises for many use cases. The real benefit is agility and lowering the cost and risk of experimentation via self-service and consumption based pricing with no upfront long term commitments.”

SaaS or Cloud as Seen Through the Lens of the Big Vendors and Consulting Companies

To the prominent vendors and consulting companies, SaaS and Cloud are entirely negative.

• The prominent vendors had tended to use large and expensive sales and presales teams. They most often did not allow their customer to use their software as a trial before purchasing.
• For consulting companies, SaaS and Cloud software would mean a significant reduction in their consulting revenues. Consulting companies rely heavily upon implementation business for on-premises vendors and are now trying to recast themselves as indispensable for SaaS or Cloud. The overall delivery model is more efficient, translating into fewer inputs for the same or more output. If the software implements quickly and is primarily implemented by the vendor, the consulting companies cut out of the loop.

Therefore, both the prominent on-premises vendors and the consulting companies were aligned against SaaS. Thus, both the leading vendors and the consulting companies concluded that if SaaS and Cloud could not be blocked (which they tried to do by playing on security concerns), then the next best thing would be to co-opt the concepts of SaaS and Cloud but undermine the actual model of SaaS and Cloud. Also, there was a dramatic change in how Wall Street interpreted and therefore rewarded companies that self-identified as SaaS or Cloud, giving those companies that either were SaaS or Cloud or posed as SaaS or Cloud substantial premiums in the marketplace. At that point, the decision on the part of the significant vendors was clear, they could not obstruct the movement to SaaS or Cloud (which was strategy #1), so they need to move to the second strategy, which was to co-opt SaaS or Cloud.

Revenues from Cloud to Exceed the Revenues from Y2K?

One of my favorite quotations is from a senior partner at a major consulting company who stated that he expected the revenues from SaaS or the Cloud to exceed the revenues from Y2K!

Consulting companies would like their revenues to significantly increase by implementing software for which the history of the software delivery method has been not to have a consulting company involved. They want to adopt SaaS or Cloud’s marketing cache but not be impacted by one of its primary benefits, which is to move consulting companies out of the environment. This intent is explained quite clearly in a quotation from Larry Ellison on this exact issue.

Larry Ellison once commented on the topic of cloud computing:

“The interesting thing about Cloud computing is that we’ve redefined Cloud computing to include everything that we already do.”

And…

“We’ll make Cloud computing announcements because, you know, if orange is the new pink, we’ll make orange blouses. I mean, I’m not gonna fight this thing … well, maybe we’ll do an ad. Uh, I don’t understand what we would do differently in the light of Cloud computing, other than market … you know, change the wording on some of our ads.”

That is right. Larry Ellison will be bringing out ads that will be actively designed to deceive you into thinking that Oracle offerings that are not SaaS or Cloud actually are.

Vendors such as Oracle, Microsoft, and IBM have been accused of “cloud-washing.”

A Replay of the Package Solution Fiasco?

If this sounds like a replay of the packaged software “revolution” in the 1980s and 1990s, it should. Custom solutions were replaced by ERP systems that promised to have all best practices. Companies let go of people supporting internally developed solutions to find that the external systems were not created for them. Deloitte and Accenture got rich billing for re-coding many requirements that were already covered by internal applications into ERP. Cloud knowledge in most companies is still low. We see a gold rush of terrible quality companies getting referred business from major software vendors. And the only reason they are getting the contracts is that they are “partners,” and the vendor can take their margin on top of the cloud consulting firm/provider.

Notice this quotation from an article by Mark Hurd, CEO of Oracle.

“The most important difference between consumer and business technology isn’t the amount of spending; it’s how the money is spent. Consumer tech spending is mostly on offense, as people buy the latest, most innovative devices, applications, and services to improve their lives. The vast majority of business tech spending is still on defense: maintaining, integrating, and protecting legacy systems.

In fact, most company CIOs still spend 80% or more of their IT budgets in this defensive mode, managing the applications and infrastructure they’ve had for a long time. That leaves precious little time and money for innovative new technologies, digital capabilities, and digitally inspired business strategies.

Those legacy applications, as well as the servers, storage, and other infrastructure that support them, amount to a form of technology debt. Think of the staff time and maintenance fees companies must keep plowing into their on-premises systems as mounting interest on the tech debt—time and money that do nothing but keep companies at status quo.”

ERP vendors used the legacy argument to denigrate the internally custom-coded applications that the ERP vendors wanted to replace. We covered in the article How SAP Used and Abused the Term Legacy. Now the term is being repurposed to apply to on-premises environments.

But there is a problem. Migrating to the cloud is proving far more complicated than initially thought.

Notice the following graphic from IDC.

We have several questions about this study. The study declares cloud repatriation activity (a great term, by the way, kudos to whoever created it). As you see from my previous statement, many scammers and shady operators are making deals with SAP and picking up cloud contracts. (which are hosting contracts because they cannot convert/port SAP to cloud, and the terms are on-premises terms — with contracts going out for around five years).

These cloud deals have a high failure rate. The vendor is pretending they are involved when they are not. So an important question is how many cloud failures are related to customers going to the wrong place for information on the cloud.

In our book How to Leverage AWS and Google Cloud from Oracle and SAP Environments, we explained that one should never look to vendors like Oracle or SAP for advice on the cloud. But this is what companies are doing. They listen to IBM or other incumbent vendors when they could go directly to AWS or GCP, or other real clouds and begin testing themselves.

How to Dilute the Terms Until they are Utterly Meaningless

The most significant marketing budgets in enterprise software are maintained by the largest consulting companies’ largest software vendors. Therefore, this gives them enormous power to reframe SaaS or Cloud in a way that benefits them. SAP, for example, has zero interest in offering pure SaaS or Cloud software. Deloitte has zero interest in implementing SaaS or Cloud software, and for self-evident reasons. Interestingly, this goes without comment.

• SAP: One of the most controlling and extractive software vendors in enterprise software is suddenly interested in providing its customers with flexible lower cost applications?
• Deloitte: Deloitte is a consulting company that routinely pulls $50 to $100 million out of clients for low-quality finished systems suddenly wants to be sidelined and see its revenues shrink dramatically because it “believes” in SaaS or Cloud? Because Deloitte is concerned with the value being delivered on projects?

And this ridiculous narrative mainly goes without mention. Most analysts repeat what SAP says in their articles and assumes that it is true. That is, they grant SAP SaaS or Cloud status before SAP has proven the capability. They spend no time trying to understand if SAP produces a misleading press release by adopting SaaS or Cloud terminology.

They would like to undermine the terms, so SaaS or Cloud becomes utterly meaningless. Basically, the customer and Wall Street think they are getting SaaS or Cloud, but that everything from the terms is changed to the cost, and especially the cost is as high or even high as for on-premises software. The more that the big consulting companies and the prominent vendors can co-opt SaaS and Cloud and reduce its benefits, the more they can ensure that they lose no business during what was supposed to be, and still can be a massive change in the enterprise software market.

Cloud Washing by SAP and Oracle

SAP has been relentlessly bringing out press releases as to how dedicated they are to SaaS. SAP has created products that are explicitly designed for cloud washing. This is covered in the article The HANA Cloud Platform Designed for Cloud Washing. SAP has also come out with entirely impractical adjustments to the SaaS or Cloud concept called the hybrid cloud, which is entirely disingenuous and is a way for SAP to rebrand its on-premises offering in a highly confusing manner to customers. SAP has to do this because most of SAP’s application sales are still on-premises. This is covered in the article SAP’s Cloud Chaos Offering with Hybrid Cloud. Pure SaaS or Cloud vendors do not have to twist themselves into pretzels that SAP does because pure SaaS or Cloud offers real cloud naturally. Arena Solutions, Salesforce, etc.. do not bother with these types of shenanigans. SAP has been hiding who is hosting much of its software. This topic is covered in the article How SAP Has Secretly Been Outsourcing Hosting. 

Cloud Terms for SAP?

One of the most surprising developments is that SAP has become a significant promoter of its products as SaaS or Cloud, but it uses SAP terms and conditions, which are anything but SaaS. SAP does not allow you to cancel quickly on a month-to-month contract. Quite the contrary, SAP has long-term contracts and restricts and controls its customers.

SAP is moving into full harvesting mode. HANA puts in a series of rules and regulations which, combined with indirect access, create a maze that customers have to walk through. In this time, where we thought SaaS would open up IT implementations to greater freedom, SAP has adopted or co-opted the term SaaS but is becoming even more controlling than it was previously. And in the short term, this will probably drive revenue (financial analysis is not my area, so that is a guess), but it makes SAP obviously out of touch and vulnerable in the long term.

Paying Top Dollar for the Worst Possible Advice

If you follow SAP, Oracle, or SAP or Oracle partner’s advice, you are headed for significant cloud waste. They have to make their customers give them a considerable markup because that is their model. We are seeing the deceptive advice on the cloud provided by these companies first hand as we are sent documents from clients. The problem is once again; there are virtually no independent consulting entities. Each of them is aligned with one of the major vendors, supporting the markup doctrine that will allow the vendors to meet Wall Street objectives.

If a consulting firm does not follow the vendor’s marketing talking points, they will be appropriately punished by the relationship management arms within those companies. Overall this is a bad time to be taking advice from any consulting firm with a history of on-premises consulting. It continues to amaze us how companies are paying top dollar to consulting firms so they can get the absolute worst advice on the cloud.

Giving Out Fake Information on the Cloud

Oracle has the worst explanations of the cloud we have ever read. Oracle keeps hiring people at the top of the market from AWS and Google. Still, the Oracle Cloud is not improving, and the Oracle explanations of cloud in the product documentation are entirely nonsensical. Larry Ellison’s statements where he tries to critique AWS or state that it costs less to run the Oracle database on Oracle Cloud are altogether false.

Why Major Consulting Companies Ruin the Cloud

Something that should be eliminated, as a concept, is that major consulting companies have no interest in improving the condition of their clients. The major consulting companies are first and foremost focused on their bill-ability – and the problem is that their bill-ability is directly contradictory to the interests of their “clients.”

Trusting Major Consulting Firms on Technology Advice?

No major consulting company can be trusted to provide technology advice because no major consulting companies place their client’s interests above their own. They have not fiduciary responsibility to their clients. SaaS is the most crucial development in enterprise computing, but significant consulting companies are slowing its adoption? They do this because SaaS will mean that they shrink as entities, and the software vendors take control of the implementation and the maintenance at a far lower cost.

Major consulting companies have a severe conflict of interest regarding advising buyers of low support applications because they make more money from high rather than more moderate maintenance applications. Correspondingly, they are significant proponents of the highest implementation and maintenance applications and why they have come out so strongly against SaaS.

Accenture published a document entitled “Why Big Systems Are Here to Stay,” which perhaps should have been called “Why Big Systems Are Here to Stay: Because We Make Tons of Money That Way.” In this document, Accenture makes the following contentions:

“And a third advantage of an ERP environment has to do with how data is managed, integrated and secured. If not properly integrated, cloud and software-as-a-service solutions can create a more chaotic, less reliable and less secure data environment.”

Data Management and Advantage for ERP?

This is an interesting contention because ERP environments have zero advantage over non-ERP environments concerning data management or integration, or security. ERP systems that I evaluated within companies often have the lowest data quality of any software category, particularly for the tier 1 ERP vendors. The applications have such dated data management tools. As for integration, ERP systems may be integrated to themselves, but the tier 1 ERP vendors are some of the most difficult systems to integrate other applications. As for the security argument, ERP systems are not more secure than different software categories.

The above Accenture statement also confuses the topic of ERP systems versus SaaS systems. SaaS is a delivery method for software; ERP is a category of enterprise software. SaaS can deliver as an on-premises solution or any application, including ERP. If ERP systems are on-premises, they are more secure than cloud or SaaS applications, but that is a different issue.

Overall, the evidence is severely lacking to support the Accenture paper’s statement, and it should qualify as FUD (fear, uncertainty, and doubt). Accenture’s main financial incentive is to slow the movement towards SaaS solutions and away from tier 1 ERP because it’s how they make a lot of money. They have far less control once the application is delivered via SaaS. Instead, the software vendor tends to take over consulting and support. Interestingly, nowhere in the paper does Accenture mention how it makes money (which is with on-premises consulting and support) and how this may influence its “recommendations.”

Accenture Says….

Accenture goes on to say that the best approach is a hybrid (that is, some on-premises and some SaaS) and then proceeds to make another self-serving proposal, that this IT ecology must be managed by using a trusted “broker.”

So, who’s in charge of managing this complex hybrid system? The answer lies in the rising trend of using an integrator or trusted broker. This brokerage can act as either a consultant or as a managed services provider. This holistic or managed services approach enables companies to treat their IT resources as just that and also provides a new level of flexibility for companies and CIOs.

And who would this trusted broker be?

That is right, Accenture!

After spending decades overcharging and misdirecting their clients to all the wrong software in the on-premises environment, Accenture would like to be handed to keys to managing their client’s IT solution architecture in the new on-premises/SaaS “hybrid” environment.

How to Understand Thomas Kurian’s Move to Google Cloud

Thomas Kurian recently left Oracle and joined Google Cloud. In this article, we will review the implication of Google Cloud.

Implications of the Move by Kurian

The Register described it as follows:

“Kurian was the database giant’s cloud supremo, and oversaw much of its product development. He seems to be a natural fit for Google Cloud: as an experienced enterprise IT vendor executive, he follows in the footsteps of industry veteran Greene in trying to smarten up Google Cloud so it can compete against Azure and AWS for business.”

This is a significant happening, and it is for several reasons. One is that both AWS and Google Cloud are gunning for Oracle’s business. So far, AWS has been in the lead in going after Oracle, but this move is a signal that now Google Cloud will have the ability to make going after Oracle even more of a priority.

The Experience of Migrating Workloads to Google Cloud

Mark Dalton of AutoDeploy explained this in the following quotation.

“One thing that is dramatically different from Google Cloud and everyone else is their 100 percent concern for open source software. They take this very seriously. Migrating our workloads to GCP requires the most robust OSS documentation I’ve ever seen. Google has dedicated resources who review the content and will reject your product if it is not documented with 100 percent accuracy. Thomas Kurian is going to have to adjust to that modality. But aside from that this make GCP a serious competitor to AWS. Thomas Kurian is brilliant, awesome to work with, and laser focused and dedicated to his engineers. This is going to work very well.”

Thomas’ Motivation is Sky High

Another question is around Thomas Kurian’s motivation. Kurian, it is rumored, left Oracle because he clashed with Ellison over Oracle Cloud’s direction, with Kurian preferring the strategy of leveraging the IaaS of both AWS and Google Cloud. At the same time, Ellison favored competing directly with AWS and Google Cloud.

“Think of all the Oracle customers Kurian knows. All of the customers that have told him Oracle Cloud is”customers who have struggled with Oracle Cloud Infrastructure, it’s stability, and offerings.”. He’s going to open that Roledex and start offering beta trials, incentive discount pricing, and bundled offerings.”

Kurian’s First and Second Steps at Google Cloud

Now Kurian is going to have a real cloud to offer rather than Oracle Cloud. Mark Dalton lays out the likely outcome in this quotation.

“So Kurian will go after the ERP workloads first, which is the obvious place to start. This is especially true of PeopleSoft. The PeopleSoft model is so spread out he can offer a very compelling case to move to GCP. Now, bundle that with BigQuery. Would you rather have a team of specialists on OBIEE, which is a difficult to install and maintain, or would rather have one or two dedicated resources that can get BQ up and running and making that data in your ERP accessible? The answer is obvious.”

Mark lays out the following strategy as stage two for going after Oracle’s business.

“He’ll use Kubernetes to orchestrate containerized solution sets for Oracle products. Want to run Hyperion in GCP, click a button, done. Lower cost for GCP, lower cost for the customer.

IBM’s acquisition of RedHat shows that there is a market demand for rapid deployment models for enterprise customers. Google does not need to invest 8 billion dollars. Google Cloud has the software to facilitate these new operating models, built, deployed, and operating at scale.”

Will Thomas Kurian’s Sales Approach be Successful at Google?

The following quote is from Ahmed Azmi, which describes how he thinks Thomas Kurian, the new head of Google Cloud as of November 2018, will approach making changes as Google Cloud.

“I think Kurian will focus exclusively on Oracle accounts, the ones with the most pain first. Those low-hanging fruits are first candidates to migrate systems and apps to GCP. He only needs a few big references in the next months to get the ball rolling. It’s a BIG open question if Oracle sales reps will be successful at Google. Selling services is fundamentally different than selling products, getting paid in advance, and moving on to the next customer. Outside of G-Suite, Google sells tech NOT business apps. Their approach has always been developer-centric just like AWS and Microsoft. Oracle’s sales approach is top-down selling to execs and budget owners NOT developers. There’s a significant skill mismatch involved.”

You know, an Oracle sales rep I used to be friendly with told me she had no interest in selling services. The reason being, as you said, she wanted to

“get in, get out and get paid.”

She said that software sales were great because there was no question of consulting and the standard client issues. With software, the customer bought it, and it was cut and dried. On the “top-down” approach you describe, this reminds me of a quote from Dan Woods.

“Oracle understood very early that enterprise software is sold, not bought. To make a sale, you need an effective salesforce that is well equipped and highly motivated. You need a wide, deep, and highly motivated supporting ecosystem. Oracle has these elements and they have been the foundation of the company’s success. But the world of IaaS and PaaS is different. It is a developer-driven world. In an IaaS and PaaS cloud, software is bought, mostly by developers, not sold. All the salespeople in the world will not convince a developer to buy an inferior product. Oracle’s mighty sales machine cannot dominate this market; only better products matter. Right now, Oracle may fall further behind in market share in its IaaS and PaaS clouds.”

Thomas Kurian Lies to Geekwire

We took the most interesting and notable quotes from this interview and analyzed Thomas Kurian’s answers.

The Quotes

Kurian is Now a Fan of Open Source?

GeekWire: I was talking to Redis Labs CEO Ofer Bengal last week and he mentioned that in his view the new database services announced Tuesday was an initiative you pushed the company to do. How did this all come together?

Thomas Kurian: The background is fairly simple. We see a lot of customers wanting to develop applications using open source. Historically they wanted three things: They wanted a fully-managed infrastructure for the open source technology; second, they wanted enterprise support from the cloud provider; and third, they wanted the cloud provider to allow them to use their credits to consume the open-source offerings in addition to the cloud platform provider’s old products.

Well, Kurian’s position on open source will have to change, but at Oracle, they do whatever they can to undermine open source. The interviewee should bring this up.

Working in a Friendly Manner with Open Source?

We felt that many cloud providers were not working in a friendly manner to open source, and we felt that open source companies needed to have a cloud partner that would share the success of the platform with them. And so what we’ve done is a very simple thing. We’ve put together the leading open source companies, (and) they’re offering their services on Google Cloud as fully managed services. These products will be taken to market by Google’s cloud sales team and we will support it as a first class service in Google Cloud.

So we’re giving customers and developers choice by giving them ease of use, because they get a single console from which they can access all these technologies. We’re giving them the ability to get integrated billing, metering and consumption of procurement. And we are sharing our success with the partners.

How is that different from what Google Cloud had before. Our Google Console already had all of this. One has to be careful not to allow Kurian to take credit for things that existed at Google Cloud before arriving there.

Open Source Companies Should Be Compensated for Their Hard Work?

“GeekWire: With respect to open source in general and some of the changes that have been contemplated by these companies, such as how cloud providers can use those open source projects, where have you come down on that?

Kurian: We generally feel that if an open source company has done the hard work of creating the open source technology and providing a solution that developers and customers like, they should be fairly rewarded for that hard work. And if their livelihood, if you will, is threatened by alternative forms of monetization, which is taking away their ability to monetize the technology that they invented, we don’t think that’s necessarily the right thing for the industry.”

Well, this was the exact opposite view that Thomas Kurian held when he worked at Oracle. Oracle’s view is that open source projects should get nothing. We quote from Larry Ellison.

“It is not enough for one to win, all others must lose.”

Google and Oracle Are Similar?

“GeekWire: This is the first time we’ve had a chance to talk since you’ve taken this new role and I wanted to check in on a couple of things. One thing that strikes me is that it would appear from the outside that Oracle and Google are two very different corporations. I was wondering if you could give me a sense, now that you’ve been around a few months, of how they are alike and how they are different.

Kurian: They’re alike and different in some ways. Every company that you work at is different from every other company that you work at, right?

I’ll give you an example. Engineers in all companies are roughly the same. They are very focused and disciplined on how they deliver software. They’re very keen on understanding customer needs. They’re very keen on delivering technical solutions to needs that customers have.

The way that Google brings its technology to market and the way that the relationship it has with customers are different than other companies. Partly because Google is such a technological powerhouse, but many companies in the industry look at it for solutions to their digital problems.”

Oracle is the worst and least ethical company in the enterprise software space, beating out SAP, which holds the number two spot. Google has been one of the better corporate citizens. Secondly, Oracle engineers and developers are frequently disheartened as they can’t mesh with the overpromising sales teams. It is challenging to see many similarities between these companies except that they both work in software.

Kurian Suddenly Found Ethics?

GeekWire: How do you feel about working with military customers regarding cloud and AI services?

“Kurian: We’ve made a public statement about it. We made a statement around our AI principles that’s publicly documented. We stand by them. We do work with a number of agencies around the world, but they’re always in compliance with our AI practices and principles that we publicly made a statement about.”

It is challenging to believe any statement regarding ethics made by Kurian, given his history with Oracle.

Google Loyalty

“GeekWire: With respect to the core cloud business, what do you think Google has to do to gain share in cloud computing? And what do you think is a realistic target for where Google might be in two to three years?

Kurian: We have the lowest customer churn of any cloud provider in the industry. We have amazing customer loyalty. If you look at the top 10 companies in virtually every industry: nine of the top 10 media companies, seven of the top 10 retailers, six of the top 10 utility companies, five of the top 10 financial services companies, five of the top 10 manufacturing companies, five of the top 10 healthcare companies around the world — not just in the United States –use Google Cloud for their business transformation.”

And Oracle Cloud, which is what Kurian was responsible for, had the highest churn. Kurian leads an approach where reps were told to get signups and where those customers would churn because that is what the Oracle Cloud leads customers to do. Oracle Cloud is a barely functional cloud that is hosting, not the cloud. That is what Kurian is responsible for. Everything Kurian is saying was the accomplishments of Google Cloud before Kurian got there.

Training More Sleazy Oracle Type Sales Resources?

So for us to grow, the primary thing is to scale our go-to-market organization. And we’re very committed to doing that. We just need to hire and train and enable a world class sales team at scale.

Today we have a great sales team, but we are far fewer in number than the other players. We just need to expand that. And as I talked to customers, they asked us to, one: expand our sales organization and our go-to-market teams. Second: specialize (that sales team) with deep expertise in technology and in industry. And third: make it easy to contract and do business with us. We are extremely committed to doing all three of them.”

We cover this topic in detail in Will Thomas Kurian Bring Oracle’s Sales Sleaze to Google Cloud? 

Thomas Kurian told a lot of lies in this interview. He minimized the differences between the Oracle Cloud and Google Cloud. Thomas made pro-open source statements without a hint of the implied hypocrisy. He may have taken credit for something Google Cloud already had. He made statements that pretended he was ethical. He took credit for things that were the exact opposite of what he could accomplish at Oracle Cloud. And the interviewer sat there as a passive punching bag for whatever Thomas Kurian said.

Conclusion

The future of SaaS or Cloud looks increasingly murky. What was once an exciting application of a new software delivery method along with a series of open, transparent, and flexible contractual terms has been co-opted and diluted by on-premises entities. Entities like SAP and Deloitte are intent not to change how they do business, which means ruining SaaS or Cloud, all while promoting the idea that they are in favor of SaaS or Cloud. However, SaaS or Cloud has a specific definition, and it can not be attained by merely slapping a sticker on a privately hosted solution that is not multitenant. Because of how the on-premises vendors and on-premises consulting companies have with IT media, it is rare for these vendors and consulting to be questioned when they create marketing literature that proposes that they are SaaS or Cloud. While there is some talk of Cloud Washing, consulting companies are seldom asked when they use the same on-premises consulting model while talking about being SaaS or Cloud-friendly.

SAP and Oracle customers must be wary of this time and the tidal wave to terrible cloud advice that is currently emanating from SAP and Oracle and their consulting partners and the SAP and Oracle user groups. The cloud is the best hope that companies have to reduce the account control of SAP and Oracle and bring innovation and open-source into the fold. However, SAP and Oracle and the “coalition of the billing” sit on the other side of this issue. The last thing SAP and Oracle want is for their customers to become educated as to the cloud.

The same applies to major consulting companies. The major consulting companies have a business model around fleecing their customers and increasing costs. This is why it concerns when AWS has partnered with so many major consulting companies.

Overall, the cloud service promise is declining, as the cloud service providers are aligning themselves with on-premises consulting firms and bringing in executives from the least ethical on-premises vendors.

References

https://lnkd.in/dqm7Td5

https://www.geekwire.com/2019/interview-google-cloud-ceo-thomas-kurian-open-source-aws-working-military/