Oracle and Salesforce.com's love-fest: The ripple effects

IDG News Service - Oracle's string of high-profile cloud-computing partnership announcements with Microsoft, Salesforce.com and NetSuite dominated tech news headlines this week.

While certain aspects of them weren't as "startling" as Oracle CEO Larry Ellison had promised they would be, its deal with Salesforce.com definitely lived up to the hype and could have some lasting ramifications. Here's a look at the potential fallout.

A test for Oracle 12c

The partnership announced this week by Oracle and Salesforce.com, under which Salesforce.com will commit to Oracle's database and other technology for 12 years, stands to provide a major initial test case for the cloud computing-friendly capabilities built into Oracle's newly released Database 12c.

The release's most-hyped feature, "pluggable databases," allows many individual databases to reside inside a single instance. It represents Oracle's take on multitenancy, the architectural approach SaaS (software as a service) vendors such as Salesforce.com have used to serve many customers more efficiently.

But Salesforce.com has used multitenancy at the application tier; Ellison claims Oracle 12c's method is superior and more secure.

While Salesforce.com CEO Marc Benioff didn't explicitly call out the pluggable database feature during a joint conference call with Ellison on Thursday, he expressed confidence that Oracle's technology can carry Salesforce.com through "the next one or two decades" and said the company expected to cut its database server costs in half.

As Ellison noted on the call, Salesforce.com is the industry's largest pure cloud vendor. Assuming Salesforce.com makes a successful migration to 12c, expect Oracle to spare no effort in telling the industry about it in hopes of proving 12c's readiness for mega-scale deployments.

What will Workday do?

Under the deal, Salesforce.com's CRM software will be integrated with Oracle Fusion HCM (human capital management) and cloud-based financial products, and Salesforce.com will implement those two Oracle applications "throughout the company." This has resulted in speculation about Salesforce.com's ongoing relationship with cloud HCM and financial vendor Workday, which has been close.

Workday should contemplate drastic steps in response, according to one observer.

"Now that SFDC and Oracle are no longer enemies, we aren't convinced that WDAY should still consider CRM a friend," Cowen and Company analyst Peter Goldmacher said in a research note. "It shouldn't come as much of a surprise if Oracle and SFDC elevate the partnership beyond formalized product integration in the coming quarters. Workday needs to control its own destiny."

To that end, "we think Workday has to reconsider creating its own CRM product," along with LinkedIn, Goldmacher added. A next-generation CRM application from those companies could make Salesforce.com "a legacy system in world record time," he wrote.

Concern for customers?

Oracle and Salesforce.com's plan to integrate their software applications will be good for customers, since packaged and supported integrations will be lower-cost than expensive custom development projects, according to Ellison.

"Salesforce.com is a big company now," Ellison said on the call. "Customers expect us to work together professionally toward the benefit of those customers."

But for whatever good comes of that, other damage has been done, according to analyst Ray Wang , CEO of Constellation Research. "Most customers we have spoken to feel betrayed by Marc," Wang said. "They bought into the Salesforce.com religion of the past. This was a mantra of in your face, no software, no legacy IT and trailblazing the future."

The expansive deal announced this week "took that coolness away," even though Salesforce.com always ran Oracle's database, Wang added.

But one customer of both Salesforce.com and Oracle expressed positivity toward the companies' new relationship.

"It's a super-big win for us," said Dave Hansen, CEO of security vendor SafeNet, which uses Salesforce.com CRM and Oracle for financials. Salesforce.com "is by far the leader" in CRM and is probably never going to move deeply into financials, where Oracle is especially strong, Hansen added.

SafeNet has been working to integrate Salesforce.com with its on-premises Oracle system but "we want to do more," he said.

Therefore, a standard integration between Salesforce.com CRM and Oracle financials "would be a really powerful thing," Hansen added. "That's where I think this [partnership] is going to be really good."

NetSuite By Design?

NetSuite has long used Oracle technology and Ellison remains an investor in the company, but it and Oracle have still remained somewhat at arms-length until this week, when the companies announced a partnership based on integrating NetSuite's cloud ERP software with Oracle's cloud HCM application. Deloitte is also involved, planning to work with Oracle and NetSuite on a consulting practice for related SaaS implementations.

NetSuite has sought to position its software as ideal for "two-tier" ERP deployments, where NetSuite is used in a new company subsidiary and tied back into an existing core ERP system, whether from Oracle, SAP or another vendor. SAP has taken a similar approach to marketing its own Business ByDesign cloud ERP software.

Oracle mentioned the two-tier ERP concept only in passing in its announcement this week. But it wouldn't be surprising to see NetSuite and Oracle place more focus on jointly marketing such deals over time.

Larry's new foil

One thing is for sure about Ellison: He likes a good fight. But with the hatchet buried between himself and Benioff, Ellison is without a ready foil for his ample reservoir of competitive jabs, jibes and jokes.

Moving forward, expect Ellison to ramp up the trash talk on rivals such as SAP and IBM.

SAP, for one, seems ready to take off the gloves, and not just against Oracle. "This partnership ends any vestige of Salesforce's claims of independence from [Oracle]," SAP spokesman James Dever said via email. "All the past squabbling about false clouds and keynotes now appears as sincere as a professional wrestling match. The kid was just rebelling against his parents to appear cool."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Intel's CTO Justin Rattner stepping down

IDG News Service - Intel's CTO and director of its labs Justin Rattner is stepping down to meet a requirement under the company's bylaws that employees cannot serve as corporate officers after the age of 65.

Rattner will, however, return to Intel at a later date in an as yet undetermined role after taking personal leave immediately to deal with a "pressing family matter," Intel said.

The company did not immediately announce a successor to Rattner, whose exit on account of the age limit would have been expected within the company. Intel Labs will report to Intel president RenA(c)e James until further decisions related to its leadership are made, the company said.

After Rattner's return, he and the management team will decide what role he will play, said Intel spokesman Chuck Mulloy in an email. "While we were certainly aware of Justin's age our management team will use this opportunity to evaluate how we organize our R&D efforts including Intel labs," he added.A A

The company has found it difficult to make a large impact on the smartphone and tablets markets, which have been dominated by chips built around the ARM architecture.

Intel's new CEO Brian Krzanich admitted in May that the company has been weak in smartphones and tablets, but aims to improve by advancing chip and manufacturing technologies. Intel's main focus is to produce more power-efficient chips, as it also adds features for connectivity and security. Intel's upcoming chips based on its Silvermont architecture aim to outstrip ARM chips on both performance and power-efficiency.

Krzanich has thanked Rattner, who joined Intel in 1973, for "his leadership in creating one of the leading research organizations in the high tech industry", according to a statement from Intel Thursday.

Rattner was named Intel's first principal engineer in 1979, its fourth Intel Fellow in 1988 and was in the first group of Intel Fellows to be named Senior Fellow in 2001.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Oracle and Salesforce.com's love-fest: The ripple effects

IDG News Service - Oracle's string of high-profile cloud-computing partnership announcements with Microsoft, Salesforce.com and NetSuite dominated tech news headlines this week.

While certain aspects of them weren't as "startling" as Oracle CEO Larry Ellison had promised they would be, its deal with Salesforce.com definitely lived up to the hype and could have some lasting ramifications. Here's a look at the potential fallout.

A test for Oracle 12c

The partnership announced this week by Oracle and Salesforce.com, under which Salesforce.com will commit to Oracle's database and other technology for 12 years, stands to provide a major initial test case for the cloud computing-friendly capabilities built into Oracle's newly released Database 12c.

The release's most-hyped feature, "pluggable databases," allows many individual databases to reside inside a single instance. It represents Oracle's take on multitenancy, the architectural approach SaaS (software as a service) vendors such as Salesforce.com have used to serve many customers more efficiently.

But Salesforce.com has used multitenancy at the application tier; Ellison claims Oracle 12c's method is superior and more secure.

While Salesforce.com CEO Marc Benioff didn't explicitly call out the pluggable database feature during a joint conference call with Ellison on Thursday, he expressed confidence that Oracle's technology can carry Salesforce.com through "the next one or two decades" and said the company expected to cut its database server costs in half.

As Ellison noted on the call, Salesforce.com is the industry's largest pure cloud vendor. Assuming Salesforce.com makes a successful migration to 12c, expect Oracle to spare no effort in telling the industry about it in hopes of proving 12c's readiness for mega-scale deployments.

What will Workday do?

Under the deal, Salesforce.com's CRM software will be integrated with Oracle Fusion HCM (human capital management) and cloud-based financial products, and Salesforce.com will implement those two Oracle applications "throughout the company." This has resulted in speculation about Salesforce.com's ongoing relationship with cloud HCM and financial vendor Workday, which has been close.

Workday should contemplate drastic steps in response, according to one observer.

"Now that SFDC and Oracle are no longer enemies, we aren't convinced that WDAY should still consider CRM a friend," Cowen and Company analyst Peter Goldmacher said in a research note. "It shouldn't come as much of a surprise if Oracle and SFDC elevate the partnership beyond formalized product integration in the coming quarters. Workday needs to control its own destiny."

To that end, "we think Workday has to reconsider creating its own CRM product," along with LinkedIn, Goldmacher added. A next-generation CRM application from those companies could make Salesforce.com "a legacy system in world record time," he wrote.

Concern for customers?

Oracle and Salesforce.com's plan to integrate their software applications will be good for customers, since packaged and supported integrations will be lower-cost than expensive custom development projects, according to Ellison.

"Salesforce.com is a big company now," Ellison said on the call. "Customers expect us to work together professionally toward the benefit of those customers."

But for whatever good comes of that, other damage has been done, according to analyst Ray Wang , CEO of Constellation Research. "Most customers we have spoken to feel betrayed by Marc," Wang said. "They bought into the Salesforce.com religion of the past. This was a mantra of in your face, no software, no legacy IT and trailblazing the future."

The expansive deal announced this week "took that coolness away," even though Salesforce.com always ran Oracle's database, Wang added.

But one customer of both Salesforce.com and Oracle expressed positivity toward the companies' new relationship.

"It's a super-big win for us," said Dave Hansen, CEO of security vendor SafeNet, which uses Salesforce.com CRM and Oracle for financials. Salesforce.com "is by far the leader" in CRM and is probably never going to move deeply into financials, where Oracle is especially strong, Hansen added.

SafeNet has been working to integrate Salesforce.com with its on-premises Oracle system but "we want to do more," he said.

Therefore, a standard integration between Salesforce.com CRM and Oracle financials "would be a really powerful thing," Hansen added. "That's where I think this [partnership] is going to be really good."

NetSuite By Design?

NetSuite has long used Oracle technology and Ellison remains an investor in the company, but it and Oracle have still remained somewhat at arms-length until this week, when the companies announced a partnership based on integrating NetSuite's cloud ERP software with Oracle's cloud HCM application. Deloitte is also involved, planning to work with Oracle and NetSuite on a consulting practice for related SaaS implementations.

NetSuite has sought to position its software as ideal for "two-tier" ERP deployments, where NetSuite is used in a new company subsidiary and tied back into an existing core ERP system, whether from Oracle, SAP or another vendor. SAP has taken a similar approach to marketing its own Business ByDesign cloud ERP software.

Oracle mentioned the two-tier ERP concept only in passing in its announcement this week. But it wouldn't be surprising to see NetSuite and Oracle place more focus on jointly marketing such deals over time.

Larry's new foil

One thing is for sure about Ellison: He likes a good fight. But with the hatchet buried between himself and Benioff, Ellison is without a ready foil for his ample reservoir of competitive jabs, jibes and jokes.

Moving forward, expect Ellison to ramp up the trash talk on rivals such as SAP and IBM.

SAP, for one, seems ready to take off the gloves, and not just against Oracle. "This partnership ends any vestige of Salesforce's claims of independence from [Oracle]," SAP spokesman James Dever said via email. "All the past squabbling about false clouds and keynotes now appears as sincere as a professional wrestling match. The kid was just rebelling against his parents to appear cool."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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House panel approves bill increasing H-1B limits

IDG News Service - A U.S. House of Representatives committee has approved legislation that would more than double the current skilled immigration H-1B cap with the focus on science and technology workers.

The House Judiciary Committee approved the Supplying Knowledge Based Immigrants and Lifting Levels of STEM Visa Act, or the SKILLS Visa Act, by a vote of 20-14 late Thursday.

The bill would set aside 55,000 green cards each year for employers to hire foreign graduates of U.S. universities with advanced degrees in science, technology, engineering and math (STEM) fields.

The SKILLS Visa Act would also increase the annual H-1B visa cap to 155,000, from the current 65,000, and increase the additional H-1Bs set aside for foreign graduates of U.S. universities from 20,000 to 40,000.

The committee approval will help benefit the U.S. economy and aid the "creation of American jobs," Rep. Darrell Issa, a California Republican and main sponsor of the bill, said in a statement. The bill "allows immigrants who graduate from American universities with advanced degrees in STEM fields to remain here and use their talents to make this country a better place."

The bill next moves to the floor of the full House. The House action comes on the same day that the Senate passed a comprehensive immigration bill that includes high-skill immigration provisions. The Senate bill faces an uphill fight in the House.

Some tech workers groups have denounced proposals to raise the H-1B visa cap, saying there are plenty of U.S. tech workers still looking for jobs.

The Issa bill changes the calculation of prevailing wages that companies need to give foreign workers who receive visas. That provision is an effort to protection U.S. workers, Issa said in a press release.

The bill would also allocate up to 10,000 green cards a year for alien entrepreneurs who can attract investment from venture-capital firms to establish businesses creating at least five jobs.

Several tech trade groups praised the House bill. For years, several large tech companies have called on Congress to increase the H-1B visa cap, saying they can't find enough skilled workers in the U.S. to fill thousands of jobs.

The Consumer Electronics Association, in a statement, called high-skilled immigration a "key priority for the nation."

"For America to remain the world's leading innovator, we must embrace immigration policy reforms that allow the United States to remain a magnet for the best and brightest to work and build their businesses, create new jobs and contribute to the overall success of our economy," Gary Shapiro, CEA's president and CEO, said in a statement.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Yahoo kills a dozen more products to sharpen its focus

IDG News Service - Yahoo is slimming itself down again by axing 12 of its products, part of an ongoing effort to sharpen its focus on services it thinks people need in their daily lives.

The list includes AltaVista, the granddaddy of search engines, and Yahoo RSS Alerts. The other products, including Yahoo Axis, Citizen Sports and Yahoo Browser Plus, are less well known.

"Today we're shutting down a few products so we can continue to focus on creating beautiful products that are essential to you every day," said Jay Rossiter, executive vice president of platforms at Yahoo, in a blog post Friday afternoon.

Yahoo ditched numerous other products in April, such as Deals and SMS Alerts, touting similar goals around "sharpening our focus."

Here's the full list of services being killed off, in order of their planned closure dates: Yahoo Axis, a browser plug-in (June 28); Yahoo Browser Plus, a service for Web app developers (June 28); Citizen Sports, a sporting news and stat service (June 28); Yahoo WebPlayer, a media player for websites (June 30); FoxyTunes, a plug-in for controlling different media players (July 1); Yahoo RSS Alerts (July 1); Yahoo Neighbors Beta, for helping people find out what's going on in their neighborhood (July 8); AltaVista (July 8); Yahoo Stars India, a celebrity news aggregator (July 25); Yahoo Downloads Beta, an application for third-party downloads (July 31); Yahoo Local API, which gives developers access to local business information (Sept. 28); and Yahoo Term Extraction API, for extracting terms and keywords from websites (Sept. 28).

With AltaVista soon officially no more, Yahoo is encouraging users to visit the regular Yahoo Search page. Earlier on Friday, it announced a new feature for setting up search alerts.

Yahoo is highlighting other products to help fill the gaps elsewhere. Citizen Sports may be gone, but Yahoo says people can still get the latest sports news on the Yahoo Sports homepage, play fantasy sports like Fantasy Football, and stay up-to-date on the go with its mobile Sports app.

In recent months, Yahoo has said it's focused on products and services geared toward daily habits, such as email, weather, sports, finance and photos.

In some of those areas it's not doing badly. Yahoo's new mobile weather app, for instance, has a 4.5-star rating in Apple's App Store, based on about 4,000 reviews.

During the company's annual shareholder meeting earlier this week, CEO Marissa Mayer said she likes to think of Yahoo as a big startup.

"We are making investments, and we're going to continue to make investments, because that's what drives growth," she said.

Yahoo recently paid more than US$1 billion to buy social blogging site Tumblr.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Wall Street Beat: Tech sector faces turbulent market

IDG News Service - Closing out June, tech stocks are up for the year but have not enjoyed the full fruits of a bull market that has boosted the Dow to its best first half since 1999, right before the dot-com crash.

The tech sector also faces what some analysts predict to be a rough few quarters, amid doubts about the economy and market forecasts for a tough year for tech sales.

Tech stocks were up Friday, with the Nasdaq Computer Index, which tracks more than 300 tech-related stocks, closing at 1615.46, up 2.21 percent. It was a mixed day of trading, however. Of the five tech bellwethers on the Dow Jones Industrial Average, Intel and Hewlett-Packard closed up for the day, while IBM, Microsoft and Cisco were down.

Unusually, compared to what's been happening so far this year, tech was up while other sectors were down Friday. The Dow and the Standard and Poor's 500 were both down for the day.

The market as a whole has done well this year so far, however, despite recent turbulence caused by remarks from the Federal Reserve Board. Since May, Fed officials have cautioned that as the economy shows signs of recovery, they may wind down initiatives mean to fuel the recovery from recession. These include the Fed's policy of maintaining low interest rates as well as its "quantitative easing" program of buying about US$85 billion in bonds per month to boost the stock market.

Last week, for the first time, Fed Chairman Ben Bernanke laid out a timeline for winding down purchases of mortgage bonds and treasuries, possibly next year. The remarks led to a big stock selloff, with the broad Standard and Poor's 500 index declining 2.5 percent last Thursday, its worst drop up to that point since November 2011. Still, stocks have done well this year, with the Dow up by about 14.5 percent and the S&P up about 13 percent. In comparison, the Nasdaq Computer Index is up only 4.5 percent for the year.

It's a far cry from last year, when tech led markets for much of the year. This year, forecasts of relatively slow sales have hurt confidence in tech. The hardware sector is especially under pressure as users spend more time on tablets and smartphones, eschewing pricier desktop and notebook computers.

This week, Gartner forecast that worldwide desktop and notebook computer shipments will total 305 million units in 2013, a 10.6 percent decline from 2012. It expects the PC market including ultramobiles to decline by 7.3 percent.

The downward trend is offset by tablet shipments, which are expected to increase 67.9 percent, reaching 202 million units, while the mobile phone market will grow 4.3 percent, with shipments of more than 1.8 billion units, Gartner said.

So while there is good news amid the gloom, the shift from traditional PCs represents a wrenching shift for the market.

"Consumers want anytime-anywhere computing that allows them to consume and create content with ease, but also share and access that content from a different portfolio of products. Mobility is paramount in both mature and emerging markets," said Carolina Milanesi, research vice president at Gartner, in the report.

There will be winners and losers as the market changes. For example, BlackBerry's attempts to recapture its past glory as a mobile market leader are faltering.

On Friday, BlackBerry said it suffered a US$84 million loss during the three months to June 1. The company shipped 6.8 million smartphones in the quarter, 2.7 million of which were running the new BlackBerry OS. But many analysts were hoping for a profit and sales of at least 7.5 million phones. CEO Thorsten Heins asked for more time in a conference call to discuss the results, saying that "BlackBerry 10 is still in the early stages of its transition."

But the market reacted violently, as BlackBerry shares plunged by 27.76 percent to close at $10.46.

Meanwhile, the software market was supposed to be a bright spot for tech this year, but recent results point to a rough quarter for enterprise vendors. Last week, though Red Hat reported a solid quarter, Oracle revenue was soft, and Tibco's sales and profit declined year over year.

Though Oracle reported a 10 percent year-over-year increase in profit, to $3.8 billion, revenue for the three months ending in May was flat at $10.9 billion. Tibco said revenue for the period ending June 2 was $245.8 million, down from $247.4 million a year earlier, while net income was $8.7 million, down from $26.5 million.

Both companies gave conservative guidance for the next quarter. As earnings season gets under way in earnest in a few weeks, other tech vendors are likely to do the same.

"With the up and down gyrations of Japan, Europe still bumping along the bottom and angst (which we believe is premature) over Fed tightening in the U.S., no sane CFO will put out a big September quarter guide," wrote Canaccord Genuity analyst Richard Davis in a research note. "Investors' nerves are still raw from the choppy March quarter. With software modestly underperforming the market so far this year, the likely reaction from investors will be to sell first and wait for an obvious catalyst to step in."

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Facebook moves to separate ads from controversial content

IDG News Service - Facebook is launching an aggressive strategy for better detecting violent, graphic, sexual and otherwise controversial content across its site and removing ads that appear alongside that content.

The changes follow other recent developments involving hate speech appearing on the site, which Facebook has vowed to better combat, though that has not stopped some marketers from pulling their ads in response.

The new detection and removal policy, which was announced Friday in a blog post, is designed to provide Facebook with a better mechanism for removing ads that appear alongside certain types of questionable content on Groups and Pages.

"While we already have rigorous review and removal policies for content against our terms, we recognize we need to do more to prevent situations where ads are displayed alongside controversial Pages and Groups," the company said.

"So we are taking action," Facebook added.

The new review process, beginning Monday, "will expand the scope of Pages and Groups that should be ad-restricted," the company said. Ads from all Pages and Groups that fall into this more comprehensive restricted list will be removed by the end of next week.

Previously, a Page selling adult products was eligible to have ads appear on its right-hand side, but going forward those ads will not be displayed next to that type of content, Facebook said. The changes will be applied to Pages and Groups containing violent, graphic and sexual content that does not otherwise violate the company's community standards.

The way Facebook classifies what is offensive content and what is not is complicated. In terms of graphic content, "we understand that graphic imagery is a regular component of current events, but must balance the needs of a diverse community," the site says in its community standards.

For instance, "sharing any graphic content for sadistic pleasure is prohibited," the site says.

Facebook introduced new policies to combat hate speech on the site last month, following the campaign of several high-profile women's groups including Women, Action and the Media, and the Everyday Sexism Project.

Around the same time, some big-name brands like Nissan and Unilever's Dove company pulled ads on the site.

The review process will be carried out manually by humans at first, "but in the coming weeks we will build a more scalable, automated way to prevent and/or remove ads" that appear next to controversial content, Facebook said.

"All this will improve detection of what qualifies as questionable content," the site said, adding, "we will continue to work aggressively on this issue with advertisers."

The changes will not impact Facebook's business, the company said.

Facebook's revenue is derived almost entirely -- 84 percent in 2012 -- from ads.

Other ad-dependent companies are also grappling with how to deal with questionable content. Google has recently made moves to remove adult-themed blogs on its Blogger platform that also have adult advertisements.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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