Oracle says it wants $2.6 billion in damages from Google, not the inflated $6.1 billion Google put the number at or the paltry $1.4 billion Google has also read into the calculations made by Oracle’s expert.

However, Oracle may be getting ahead of itself.

At press time, the Patent and Trademark Office invalidated an entire one of the Oracle patents-in-suit, a preliminary judgment. At Google’s request the PTO is re-examining all seven Java-related patent that Oracle asserted against Android’s Dalvik virtual machine and it recently rejected some of the claims of other asserted patents, raising the possibility of a stay in the case until the PTO decides where things stand.

That notwithstanding, Oracle told the court hearing its Java infringement case against Android that the damages should “be split between a $0.9-$1.4 billion upfront payment plus a revenue share of between 10% and 15% of Google advertising revenues on Android phones.”

The number is nowhere near the 50% “even split” Google alleged before Oracle insisted it stop redacting court documents to suit itself or even the “over 20%” Google then came up with.

Oracle claims so-called Java fragmentation adds nothing to its expert’s calculations.

Case follower Florian Mueller says there still room for the damages to be trebled for the willful infringement Oracle alleges.

He also says that Oracle’s number projects Google infringing “at least some of the asserted rights ‘through 2021.’”

However, Oracle also wants an injunction and Florian thinks Oracle could get it if Google is found to infringe.

An injunction would limit the damages to past mischief, he says, but cast Google into the uncomfortable and expensive position of trying to negotiate a license deal with Oracle.

Florian also imagines Oracle might demand technical changes in Android to bring it somewhat in line with official Java rules and specifications.

Google, Florian says, “wouldn’t be able to force Oracle to offer a license on any particular terms, not even the ones found in the damages report by Oracle’s expert. With an injunction in its hands, Oracle would have an absolute right to say no.”

See http://fosspatents.blogspot.com/2011/06/oracle-says-it-claims-26-billion-in.html and http://fosspatents.blogspot.com/2011/06/uspto-invalidates-entire-oracle-java.html.

Oh my sainted aunt. Did the ground just shake?

Amazon has persuade the cloud-denying Oracle to rent its database out on-demand as part of its AWS Relational Database Service (RDS), whose only other alternative is Oracle’s little-loved red-headed stepchild MySQL.

RDS manages common database administration tasks like provisioning, backups, patching, monitoring and hardware scaling and now customers can license Oracle Database 11g Release 2 through Amazon or bring their own license.

The hitch is that only the feature-shy two-socket Oracle Standard Edition One can be had from Amazon under what it calls the “License Included” model. Oracle’s Standard Edition and sacred Enterprise Edition are strictly “Bring Your Own License” and mean either having a license already or getting one direct from Oracle.

Oracle lists Standard Edition licenses for $17,500 and Enterprise Edition licenses for $47,500 before adding any bells and whistles and apparently Oracle means to have all the money.

Unimpressed, Curt Monash of Monash Research pretty much dismisses the whole idea out of hand, saying that the stuff isn’t for production use.

Oracle is “on-premises software,” he wrote in a blog. “Oracle is hard enough to manage when it’s on your premises, with a known hardware configuration; who would want to try to manage a production instance of Oracle in the cloud?”

He’s not too fond of the Standard Edition One wrinkle either.

Anyway for those game enough to try, pricing under the “License Included” model starts at 16 cents an hour for a small instance running up to $3.96 for a quadruple extra large. It includes the software, underlying hardware resources and Amazon’s RDS management capabilities, which will soon include replication.

Under the “BYOL” model, customers can run Oracle deployments on RDS for rates starting at 11 cents an hour up to$2.96 although prices outside the US run a bit higher.

As usual, prices vary by computing power and memory. And as usual there are the additional storage and data transfer fees.

Customers can also buy Reserved Database Instances for one or three years and the cost of a one-time, upfront fee for each Database Instance. The scheme promises them discounted hourly usage rates said to fetch up to 38% or 48% net cost savings. The fees run $345-$12,600 depending on the size of instance and the term of the deal at least in the US.

Amazon said customers can work with a broad set of AWS solution providers and system integrators to deploy Oracle databases on RDS.

See http://aws.amazon.com/rds/oracle. For Monash’s reservations see www.dbms2.com/2011/05/24/quick-thoughts-on-oracle-on-amazon/.

Oracle has taken the Intel-HP Itanium chip – the one ex-Sun CEO Scott McNealy used to razz as the “Itanic” – and stomped that sucker flat.

It said overnight Tuesday that it wouldn’t write any more software for the thing.

Since HP is one of the only companies still using the part and since there’s a knife-wielding feud going on between Oracle and HP, one might assume that Larry Ellison and his new boy, the famously cost-cutting ex-HP CEO Mark Hurd, are getting back at box rival HP, which has got high-end HP-UX-run Itanium blades and Superdomes to sell.

After all, Oracle now has its own thinly supported Sparc chip to worry about in addition to its x86 hardware.

Oracle’s public statement claimed that in “multiple conversations…Intel management made it clear that their strategic focus is on their x86 microprocessor and that Itanium was nearing the end of its life.”

Besides, “Both Microsoft and Red Hat have already stopped developing software for Itanium [and] HP CEO Leo Apotheker made no mention of Itanium in his long and detailed presentation on the future strategic direction of HP.”

After Intel woke up and saw that on the wires an obviously surprised Intel CEO Paul Otellini rushed out a denial saying, “Intel’s work on Intel Itanium processors and platforms continues unabated with multiple generations of chips currently in development and on schedule. We remain firmly committed to delivering a competitive, multi-generational roadmap for HP-UX and other operating system customers that run the Itanium architecture.”

Intel reiterated that Poulson is its next-generation 32nm eight-core Itanium chip and is supposed to more than double the performance of the existing (and horribly late) Tukwila architecture. It said Kittson, which it described as an “officially committed roadmap product for Itanium beyond Poulson,” was also in active development.

Then an outraged HP, busy Wednesday morning with a shareholders meeting, put its two cents in.

Dave Donatelli, HP’s head of servers, storage and network, came out decrying Oracle’s “disinformation” as “clearly an attempt to force customers into purchasing Sun servers in a desperate move to slow their declining market share.”

He professed to be “shocked that Oracle would put enterprises and governments at risk while costing them hundreds of millions of dollars in lost productivity in a shameless gambit to limit fair competition.”

“Oracle continues to show a pattern of anti-customer behavior as they move to shore up their failing Sun server business. HP believes in fair and honest competition. Competition is good for customers, innovation and the marketplace.”

Determined to have the last word Oracle issued a second statement insisting the Itanium is dead and that HP knows it:

“When Oracle announced it was stopping development of software for the Itanium microprocessor,” it said, “HP Executive VP in charge of HP’s enterprise hardware business David Donatelli responded by saying, ‘Oracle would put enterprises and governments at risk while costing them hundreds of millions of dollars in lost productivity.’ Just the opposite is true. Oracle has an obligation to give our customers adequate advanced notice when Oracle discontinues development on any software product or hardware platform so our customers have the information they need to plan and manage their businesses. HP is well aware that Intel’s future direction is focused on x86 and that plans to replace Itanium with x86 are already in place. HP is knowingly withholding this information from our joint Itanium customers. While new versions of Oracle software will not run on Itanium, we will support existing Oracle/Itanium customers on existing Oracle products. In fact, Oracle is the last of the major software companies to stop development on Itanium.”

HP insiders claim HP could get better performance out of the x86 Intel Xeon chip these days but company pride – HP did after all push Intel into the misguided Itanium chip – and the cost its installed base would incur moving to the x86 architecture prevent it from dropping the platform.

Donatelli claims the Itanium roadmap extends out more than 10 years and asserted that HP will continue to support customers running existing versions of Oracle software on its Integrity servers, both existing and future platforms, during that timeframe.

It’s unclear what HP can do about patches and updates if they’re not forthcoming.

Oracle, however, has now said twice that it will continue to support existing versions of its software that customers are already running on Itanium.

For what it’s worth – back at the height of Unix proliferation – Oracle used to complain about having to support a lot of operating systems; no reason to think hardware’s any different.

Microsoft said last year that Windows Server 2008 R2 would be its last operating system to support the Itanium. With Red Hat it’s Enterprise Linux 6. Rumor has it Microsoft is about to terminate all support for Itanium in a few weeks since it represents so little of its installed base.

By the way, the Wall Street Journal noticed that an annual IEEE workshop on Itanium, scheduled for the beginning of April, has been cancelled without any explanation.

Oracle CEO Larry Ellison got up on stage late Thursday in a rare, practically giddy mood to say that he had found a softer, more vulnerable target than IBM – which he’s been targeting since he got his hands on Sun – and that he means to take market share from Hewlett-Packard, a once dearly held database partner whose ex-CEO now works at Oracle and whose current CEO he held up to ridicule and allegations of past improprieties during his wildly victorious courtroom soap opera with SAP.

Oracle needs to find market share somewhere because both Sun, and Unix in general, are losing out badly according to the latest server figures from Gartner.

So Oracle’s completely refreshed it Sparc server line – which everybody wondered whether it would actually do – and, as a result, based on a new TPC-C benchmark, it’s comparing its OLTP performance to a cheetah, IBM’s to a stallion and HP’s to a turtle.

Oracle was reportedly able to achieve a record 30 million transactions a minute on a newfangled soup-up Sparc Supercluster made up of 108 T3 Sparc processors with 1,728 cores, 13TB of main memory, 1.7PT of storage, 246TB of Flash memory and a 40 gigabit network running a standard Oracle database with a quadrillion rows.

The best HP has been able to muster is a real estate- and energy-hogging Superdome that scored four million transactions a minute a few months ago. IBM, which Larry allowed – my, my – has “good products,” can do 10 million with a special non-standard clustered version of DB2 running on a Power 7 machine, Ellison said. Oracle used a plain vanilla Oracle RAC database to set the new world’s record.

Of course this is all benchmark craft. Oracle doesn’t expect anybody to actually buy the benchmark machine that’s supposed to be capable of 43 trillion transactions a day but next year Oracle will be peddling three dumbed-down general-purpose commercial versions of these new Sparc Superclusters based on Sparc T3 and M5000 servers under a new so-called “Sun Rises” program.

The Superclusters, whose price is unclear, is a complete infrastructure solution for running Oracle RAC database environments. Besides servers, they include software like ZFS, InfiniBand networking, FlashFire storage and new Gold-level support.

Ellison claimed they have no single point of failure and are completely fault-tolerant. T3 chips can have up to 16 cores. T4 chips are reportedly running in Oracle’s labs.

Oracle also introduced a new Solaris 11 Express-running blades-based Exalogic Elastic Cloud box as an alternative to the x86 Exologic Elastic Cloud machine it wheeled a few weeks ago.

The widget, to be delivered in Q1 running with Solaris or Oracle Linux, is supposed to be good at running middleware like Oracle WebLogic Server and is advertised as the “fastest Java machine in the world.” (Larry quickly pointed out that all Oracle Fusions apps are pure Java.) It also runs non-Java apps and is supposed to be optimized for multi-threaded programs.

Ellison said it’s “not a born-again cloud” whatever that means.

It offers on-demand capacity and multi-tenancy, scales and when the job is done returns the resources to the pool. It’s targeted at enterprise-wide data center consolidation and consists of a rack of 1U machines with dual six-core processors, solid-state drives and an InfiniBand I/O fabric, as might be expected since Oracle is partial to InfiniBand.

Oracle also announced a new high-end Sparc Enterprise M-Server server line bearing a new 3GHz Sparc64 VII+ processor from Fujitsu with a maximum 12MB of L2 cache, double what’s been available, offering a reported 20% performance increase. The boxes, up to the 64-socket M9000, are jointly designed, manufactured and branded.

SAP reportedly agreed Monday to pay Oracle $120 million just to cover its “past and future reasonable attorneys’ fees and costs.”

Those are the fees that Oracle has wracked up pursuing its case for what is now copyright infringement against SAP and TomorrowNow, SAP’s IP-downloading cut-rate third-party maintenance subsidiary, the shuttered unit that got SAP in the hot water it’s now stewing in in a California federal court.

The joint stipulation is sealed now, carrying the notice “FILED IN ERROR. DOCUMENT LOCKED” in big bold letters on the court docket but IDG got a look at it first.

It said that in the proposed order TomorrowNow “stipulates to entry of judgment on Oracle’s claims for violations of the Federal Computer Fraud and Abuse Act and California’s Computer Data Access and Fraud Act, breach of contract, intentional interference, negligent interference, unfair competition, trespass to chattels, unjust enrichment/restitution and an accounting.”

Under the deal – as in other deals filed in the last few of days that aren’t locked – Oracle has agreed not to seek punitive damages against SAP and TomorrowNow, but only seek “those damages available under the Copyright Act.”

IDG says SAP would have to pay Oracle the $120 million by Tuesday November 9, when – theoretically of course – the trial would just be warming up. The sides picked an eight-man jury Monday, opening statements were Tuesday and Larry Ellison testifies on Monday.

The court will have to sign the deal first.

Oracle wants more than $2 billion in damages. It says that’s the fair market value of all the files TomorrowNow downloaded. SAP wants to keep the damages down to around $40 million based on what Oracle actually lost in maintenance sales. It took a $160 million provision to cover the case last week.

However, the trial is really no longer about the money.

A few months ago SAP conceded so-called “vicarious” infringement – that it had profited by TomorrowNow’s actions and could have controlled them.

Then last week it surprised everybody by stipulating to “contributory infringement,” basically that its senior management knew about the thefts and contributed to them.

The move was meant to curb Oracle’s blood lust.

SAP said it wanted to stop Oracle from turning the trial into a “media circus” by calling ex-SAP CEO Leo Apotheker, now HP’s CEO, to the stand and pinning the whole mess on him, casting serious doubts on the wisdom of the HP board in hiring him.

Ragging HP, Oracle Larry Ellison claimed last week to have direct evidence that Apotheker oversaw the “industrial espionage scheme.” He alleged that Apotheker was “on the run” from a subpoena and HP would never produce him, a prophecy that has subsequently proved true.

Despite SAP’s concessions and the fact that the trial is just about damages, Oracle still means to get Apotheker in the witness box but it will have to settle for a virtual appearance complements of his taped deposition.

Other star witnesses from SAP are also expected as well as Ellison himself, who will likely testify that SAP bought TomorrowNow in January 2005 knowing the Texas concern operated illegally from the due diligence it did and even foresaw that Oracle would sue.

According to the filed deposition of erstwhile SAP president Shai Agassi, who was on the SAP board at the time of the acquisition and ultimately responsible for the due diligence on TomorrowNow, SAP thought if Oracle sued TomorrowNow, customers would be “alienated” and that would be good for SAP. He testified via videotape Thursday that “There was always a risk Oracle would sue.”

He was preceded, also on videotape, by the developer TomorrowNow hired ostensibly to write a web scraper called Titan. He testified that Titan only went to Oracle’s site and it was “hammering their servers so hard” it amounted to a Denial of Service attack. Worried about the copyrighted material he saw downloaded he was told not to put any of his concerns in writing. He said he was laughed at when he suggested licensing the software. “Oracle was the enemy,” he said. However, TomorrowNow people worried about their personal liability, he said.

Former Oracle co-president Chuck Phillips, just named CEO of Infor, also took the stand Thursday, the same day Oracle wanted to call SAP CFO Werner Brandt, who may not show up either.

Phillips testified that Oracle would have charged SAP maybe $5 billion in license fees if the German company and its minion had tried to negotiate a price rather than rip the stuff off.

Ellison dumped Phillips so he could hire Mark Hurd after Hurd was forced to resign as CEO of HP, leading Ellison to lash out at the HP board for making “the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.”

Reuters also remembered at one point this week that the trial might not be the end of it for SAP. There is still a Justice Department investigation going on. The feds should be very interested in what SAP knew and when it knew it.

Reportedly both the DOJ and SEC have observers at the trial.

Oracle co-president Safra Catz and SAP co-CEO Bill McDermott have been in the spectators’ gallery.

Another day, another statement out of Oracle meant to embarrass HP’s brand new CEO.

Late Wednesday, three days into the SAP trial, Oracle came out and said, “Hewlett-Packard has refused to accept service of a subpoena requiring Mr. Apotheker to testify about his role in SAP’s illegal conduct. Mr. Apotheker started work for HP on Monday, but it now appears that the HP Board of Directors has decided to keep him away from HP’s headquarters and outside the court’s jurisdiction. We will continue to try to serve him.”

HP might as well have painted a big bull’s eye on Apotheker’s chest because Oracle’s gonna use his failure to show as evidence, circumstantial or otherwise, of his alleged complicity in the illegal downloading of Oracle IP that went for years at SAP’s now shuttered third-party maintenance outfit TomorrowNow.

The trial is supposed to decide how much SAP owes Oracle for poaching its intellectual property. SAP has already admitted it did but doesn’t think it should have to pay the $2.3 billion in damages Oracle is demanding.

Oracle CEO Larry Ellison claimed last week that he could prove Apotheker oversaw the “industrial espionage scheme” and that HP couldn’t afford to let him testify. He said HP would keep him out of the country until the trial is over.

HP maintains that Apotheker knew little of the affair. It claims Oracle only means to harass the man and interfere with his new job.

HP refuses to say where Apotheker is. When he got the job in October he said he would spend weeks, if not months, globe trotting and talking to HP staff, customers and stockholder by way of orientation. We heard from a source that he’s in the Far East.

Oracle can easily make that sound fishy since he’s been on its witness list since before he got the HP job.

In Leo’s physical absence Oracle is supposed to play at least clips of his videotaped deposition for the jury.

According to testimony by former SAP president Shai Agassi Leo was in charge of SAP’s “Safe Passage” program to rustle Oracle’s PeopleSoft, JE Edwards and Siebel customers and migrate them to SAP software using TomorrowNow as the decoy.

An Apotheker e-mail presented to the jury Tuesday said, “We need to inflict some pain on Oracle” by providing cheap TomorrowNow services to Oracle customers as a prelude to migrating them to SAP software.

Ellison was originally supposed to testify Friday, a performance that has now been moved to Monday – and don’t think that’s just the luck of the draw. It’s completely choreographed so Larry gets maximum media exposure. Nobody reads the Saturday papers.

By the way, Larry’s star lawyer David Boies has just flown in from a courtroom in New York to pick up the examination of SAP witnesses Friday and may well lead Larry over the traces.

by Tim Negris

Larry Ellison is one of the most misunderstood guys in Silicon Valley, and his extemporaneous pronouncements often only serve to make him more so. Sometimes his remarks are explosive and expository, like his now-famous Churchill Club cloud computing rant, and other times they are compact and cryptic, like his recent remarks about buying some chip companies. Either way, the pattern is familiar: he says something that prompts a lot of misguided chatter, and then he does something that only deepens the confusion.

After his Churchill Club diatribe, he was roundly, loudly, (and wrongly) tarred as a cloud-hating Luddite. Then, last week, when he showed off his new “cloud in a box” at OpenWorld, there was a lot of confounded mumbling damning the first as crafty equivocation or the latter as a cynical epiphany.

But, anybody who really listened to what he said and who understands what he did probably isn’t so confused. At the Churchill Club, he railed against marketing hype passing for technical innovation, and at OpenWorld, he touted tangible technology that is, in his view, the real deal.

Now, with this chip thing, it’s happening again. All he said was, “You’re going to see us buying chip companies. Silicon is very important.” But it was enough to get tongues wagging and the stock prices jumping for companies that are unlikely to be the ones he was talking about.

Chips is Chips – Not!
A lot of the chatter and (stock) speculation has focused on companies that make CPUs – AMD, ARM and Nvidia. But, to believe that Ellison would buy one of those you’d have to also believe that he’s interested in putting Oracle into a business other than enterprise technology, like supplying processor chips to makers of PCs, cell phones and embedded systems. Or, you’d have to believe that the Sparc CPU wasn’t a big part of why he bought Sun and that the new five-year Sparc road map is an elaborate prevarication.

To paraphrase Sigmund Freud, sometimes an enterprise technology company is just an enterprise technology company. And, in 30 years, Oracle has never tried to be anything else, so why start now? No good reason comes to mind.

Recognize that there are few Silicon Valley executives with a clearer, straighter, shorter path between thought, word and deed than Ellison. Now, think about his demonstration of the Exalogic Elastic Cloud at OpenWorld and recall what he has said this last year about vertical integration of hardware and software and about the folly of customers piecing together solutions from “best of breed” elements from different vendors. The answer to the question of which, or at least what kind of chip companies he may buy is as plain as the box on the stage.

The Exalogic Elastic Cloud comprises three main subsystems: processor, disk and interconnect, all of which, of course, incorporate an assortment of different kinds of chips. Some are standards-based commodity products with low prices and many sources, where ownership brings few rewards. Others, though, are powerful proprietary products that would bring Oracle both strong product differentiation and competitive leverage in relation to other server makers that must also use those chips.

Remember that right before his lob about buying chip companies he said, “Our focus is to build our [intellectual property] portfolio.” Forget standards and after-market boards. Larry’s cloud-in-a-box is a sealed cube and its hardware innards ain’t nobody’s business but his. So, to handicap which chip stocks should actually be moving on Ellison’s latest pronouncement, look to IP-rich components surrounding the processors, disks and interconnects.

Processors
The Exalogic box he demonstrated at the show contained 30 servers, each with two six-core Xeon CPUs. Now, before you say, “See, there’s where he’ll put the Opterons when he buys AMD,” consider instead the greater likelihood of the Xeons being replaced in the production machine with the just-announced 16-core Sparc T3, which delivers comparable performance, but runs cooler and eats less power than the x86 chip.

The interesting bit about the servers in the Elastic Cloud is that they use solid state disks (SSDs) to hold the operating system. Although SSDs are mostly made up of commodity memory chips, it takes some pretty special hardware mojo to endow them with fault tolerance and other attributes especially important in the utility (cloud) computing model.

SandForce is a four-year-old Valley start-up (sorry, traders) that just raised a $20 million D round on the strength of its patent-pending SSD controller technology. Currently SandForce packages its DuraClass controller with its own SSDs, but designed it to be easily incorporated by other SSD vendors, too. One of DuraClass’s key selling points is high and symmetrical read-write speeds, which would make it an excellent choice for OS storage in Ellison’s big box.

Disks
SandForce could also play a part in Oracle’s storage subsystem as a way-faster-than-disk element for storing frequently referenced data. But, we’re years away from all-SSD storage in large enterprise systems and it’s unclear how easily and to what advantage the SandDisk technology could be mixed with the conventional “rotating” disks that make up the bulk of the storage subsystem.

Enter Texas Memory Systems, a long-established, privately held, VC-free, engineer-run Houston-based company that is also in the SSD controller and drive business, sporting the trademark “World’s Fastest Storage,” claiming a number of large enterprise and government customers, and already an Oracle partner. What sets TMS apart from SandForce as a candidate for inclusion in the Oracle storage subsystem is its purchase a year ago of storage virtualization start-up Incipient, whose technology gives TMS the ability to transparently mix spinning disks with SSDs and enable easy migration from the former to the latter.

Interconnect
This is the part of the system that ties the processors to the disks and the processors to each other, and plays a big part in assuring the system’s overall speed, flexibility and reliability. There’s something of a battle brewing these days between two different interconnect technologies: Ethernet and InfiniBand, with many companies arrayed on either side. The Exalogic box uses InfiniBand and Ellison has made it clear he thinks it’s superior to Ethernet for his purposes.

It’s worth noting in passing that the increasingly popular VBlock cloud infrastructure technology being flogged by the Cisco/EMC/VMware VCE troika uses Ethernet and for that reason and others is likely to become one of Ellison’s favorite piñatas in future stagecraft.

One possible acquisition candidate in the InfiniBand interconnect area is a no-brainer and thus already mentioned in a number of places. Mellanox is the leading supplier of InfiniBand chips, cards and switches, one of their guys runs the InfiniBand Trade Association, they are a long-time Sun familiar, and most companies in the InfiniBand space are in some way beholden to them. They are a public company, but not gigantic, and not diversified into other businesses that Oracle can’t use.

But, Mellanox is not the only candidate in the InfiniBand interconnect area; there are others that could make good acquisition prospects, either as alternatives or in addition to Mellanox. Remember, InfiniBand is used to connect the processors to the storage and to each other. While Mellanox plays in both of those roles, there are other companies more focused on one or the other that might also fit into Oracle’s plans.

QLogic makes InfiniBand products for clustering processors, but has a longer, deeper history and considerable leadership in storage-related products. In that area, besides InfiniBand, it also offers Ethernet and Fibre Channel storage connection technology. Although Oracle wants to be the only box in the data center and wants all storage to be in that box, obviously that isn’t going to happen. Integrating with other storage products using all three protocols will likely be a requirement, and one that Oracle could meet with greater ease and control if it owned QLogic.

A third interconnect candidate is Voltaire, which offers InfiniBand switches and adapters with an emphasis on server clustering for high performance computing. Unlike Mellanox and QLogic, Voltaire doesn’t appear to be in the chip business and their unique IP seems to be in fabric management and application acceleration software. So, depending on how literally one takes Ellison’s remark about “chip” companies, Voltaire may or may not be a good possibility.

On the other hand, as of this writing, Voltaire has just become the subject of speculation as a possible acquisition by Oracle nemesis IBM as an adjunct to its purchase days ago of Voltaire partner Blade Networks. That could conceivably make Ellison more interested in buying Voltaire as a way to mess with IBM, in addition to its obvious face value.

Tell-Tales
However, one phrase that figures quite prominently in Voltaire’s positioning and may make it less attractive to Oracle: “scale-out.” In this context, scale-out represents the idea of building up computing capability by lashing together large numbers of small commodity boxes or blades, and it’s an idea with significant proponents. Google, for instance, is essentially the biggest scaled-out system ever created.

But, Ellison is more of a “scale-up” kind of guy. Scale-up means building the biggest box you can and, if you must, then building another and hooking them together. In fact, in his Exalogic demo he suggested that two of those machines could handle all of Facebook’s 500 million users. It is a safe bet that presently Facebook is running on way more than two big machines.

So, touts take note, as you consider which companies may be on Ellison’s buying radar, be skeptical about any chip and component companies flaunting “scale-out,” along with “standards,” “multi-vendor,” “open” or anything else that doesn’t make sense in the context of Ellison’s vertically integrated, all-Oracle “big honkin’ cloud-in-a-box.” And, if a company makes most of its money selling things that don’t go in a data center, forget it.

Look instead for the companies making patented proprietary chips that get soldered onto other companies’ boards, and/or those making heavily engineered boards that get built into major vendors’ servers. And, give extra credence to any cases where the purchase will give Oracle immediate product differentiation in terms of speed, capacity and throughput, give it technical leadership and competitive leverage, or enable it to steal a long march on IBM. If you understand Ellison, you know those are the things he cares about the most.

OpenOffice Kidnapped

A bunch of European and Brazilian developers kidnapped OpenOffice.org (OOo), the Sun-started challenge to Microsoft Office, Tuesday to the cheers of Oracle enemies like Google, which Oracle is suing for infringing on Java, Red Hat, whose code Oracle poached for it own Linux, Novell, whose own version of OpenOffice has patches Sun wouldn’t accept, and Canonical, which has a relationship with IBM, Oracle’s biggest enemy of all.

IBM itself, however, whose Lotus Symphony product is based on OpenOffice, seemed a little taken aback by the kidnapping and – apparently more concerned with the Open Document Format (ODF) than OOo – has adopted a wait-and-see attitude to the development.

The high-handed note the kidnappers left announced “a major change in the project’s structure” and said simply, “from now on, the OpenOffice.org community will be known as ‘The Document Foundation.’”

It said that Oracle, which acquired OpenOffie.org assets as a result of its acquisition of Sun Microsystems and so owns the OpenOffice.org trademark, “has been invited to become a member of the new foundation, and donate the brand the Community has grown during the past 10 years. Pending this decision, the brand ‘LibreOffice’ has been chosen for the software going forward.”

It also wants “the other assets [Oracle] holds in trust for the Community, in due course, once legal etc issues are resolved.”

That’s as much as they want to do with Oracle, which is not exactly a hero of openness, is given to having a tighter grip than Sun, and has had little to say about its intended Google-y Oracle Cloud Office since the name fell from its lips last winter. Presumably it is closed source.

Oracle, which is the biggest contributor to OpenOffice, has yet to respond to the news that there’s a new OpenOffice developer in town that means to “liberate the development of the code and the evolution of the project from the constraints represented by the commercial interests of a single company.” But judging from the icy silence with which Oracle greeted the attention-seeking ultimatum it got from the OpenSolaris governing board, it may be best for everyone to assume that the LibreOffice fork is going to be the LibreOffice fork – and, yes, there’s some English-only beta code for Windows, Linux and Mac OS X at libreoffice.org now.

Evidently a roadmap is expected soon too.

One of the Foundation’s first changes in how Sun and then Oracle ran things was to can the requirement that contributors turn over their copyrights. And unlike Sun, which had the commercial StarOffice, there will only be the one LibreOffice, governed by both the LGPLv3 and the Mozilla Public License.

One of the renegades, Charles Schulz, a member of the Community Council and Native Language Confederation lead, said in a statement that “The Document Foundation supports the Open Document Format, and is keen to work at OASIS [on] the next evolution of the ISO standard.”

The new movement expects to accelerate ODF adoption by government and the enterprise.

Google mumbled something about LibreOffice “encouraging further development of open source office suites” and Markus Rex, who runs open platform solutions at Novell, hoped “to see LibreOffice do for the office productivity market what Mozilla Firefox has done for browsers.” It appears that the enhancements in Go-OOo, Novell’s version of OpenOffice, will be merged into LibreOffice.

Canonical means to ship LibreOffice in future releases of Ubuntu and Simon Phipps, who was Sun’s chief open source officer, didn’t make the Oracle cut and is now a director of the Open Source Initiative (OSI), is looking forward to seeing the innovation a “truly open community” can drive.

The foundation, which is being led by a steering committee of developers and national language project managers, is setting up its own web infrastructure because it seems that “since Oracle’s takeover of Sun Microsystems, the Community has been under ‘notice to quit’ from our previous Collabnet infrastructure.”

It is soliciting funds and resources from companies and telling they won’t have to worry “that they may be helping a commercial competitor.” It needs developers, localizers, documentation writers and QA testers. Its bank account is being handled by OpenOffice.org Deutschland eV.

So far endorsements have come in from the Free Software Foundation (Richard Stallman himself), the French and Norwegian OpenOffice communities, Brazil’s BrOffice.org, the Gnome Foundation, NeoOffice, an OpenOffice fork for Mac, credativ, a UK open source consulting and services outfit, Collabora, a UK-based open source consultancy, and Liberix, a non-profit Czech open source support operation.

If the Supreme Court Hears Microsoft’s Case It’s Gonna Be One Crowded Courtroom

Practically everybody and his brother is backing Microsoft’s appeal to the Supreme Court in its attempt not to pay Canadian ISV i4i $290 million for Word’s alleged infringement of an i4i custom XML patent that Microsoft claims is invalid.

Google, Apple, Intel, Yahoo, HTC, Dell, HP, Facebook, Wal-Mart, Toyota, Intuit, Netflix, Verizon, the Electronic Frontier Foundation (EFF), the Apache Foundation, the Computer and Communication Industry Association (CCIA), the Securities Industry and Financial Markets Association (SIFMA) and the Clearing House Association, 35 law professors and others have all filed amicus briefs trying to persuade the court to hear the long-shot case.

Microsoft is challenging the judicial notion of “clear and convincing evidence” used by the Federal Circuit to uphold the district court’s decision that i4i’s patent is valid. It says the standard should be changed back to the old pre-1982 rule of a “preponderance of evidence.” That way defendants would have more latitude in proving patents they are supposed to have violated aren’t valid in the first place and wouldn’t have been if the patent examiners had seen all the evidence.

The Federal Trade Commission favors the “preponderance” standard and says the “clear and convincing” proof demanded by the Federal Circuit simply whistles through too many really bad patents.

The amici, who have millions riding on the decision, argue that “preponderance” – the same standard allowed a plaintiff in proving infringement – could save endless frivolous litigation and put throw a money wrench into the troll business.

According to Law.com, if the Supremes take the case it “could lead to a historic realignment in the patent litigation arena.”

RIM Unveils its Tablet

Having been kicked in the teeth by both iPhone and Android smartphones this year, Research In Motion unveiled its rumored iPad copycat Monday in an attempt to stop both Apple and Google from leaching more of its revenues.

The thing is called the Blackberry Playbook, a clear appeal to the company’s largely male installed base of Crackberry heads.

The tablet is positioned as a multitasking “enterprise-ready professional tablet” “perfect for either large organizations or an ‘army of one.’” However, it may have a split personality. Beside corporate power games, it’s also supposed to be good at playing traditional games.

Unlike Apple, the Playbook is “Flash-loving.” It supports the Apple-scorned Adobe Flash Player 10.1 and Adobe Mobile AIR as well as the Apple-doted-on HTML 5 so RIM can brag that Playbook will deliver “the real, full web experience to mobile users.”

Otherwise it’s smaller, thinner and lighter than the iPad measuring less than half an inch thick (5.1″x7.6″x0.4″) and weighing 14 ounces with a seven-inch 1024 x 600 touchscreen display.

Initially the Playbook won’t be able to connect to the Internet directly, which is actually a plus in enterprise terms.

It’s fitted with Bluetooth and Wi-Fi and in the absence of Wi-Fi it piggybacks on the Blackberry via Bluetooth to access the Internet (no separate service plan). That means that the smartphone’s content is viewable on the tablet, but actually stays on the phone and is only temporarily cached on the tablet (subject to IT policy controls). It disappears once the connection is broken so there’s theoretically less of a security risk and less of a manageability issue.

Eventually RIM is supposed to come up with 3G and 4G versions of the tablet.

The thing is powered by an unidentified 1GHz dual-core processor running on the Unix-like symmetric multiprocessing QNX Neutrino kernel that RIM acquired when it bought QNX earlier this year for about $200 million. For purposes of the Playbook the operating system is called the BlackBerry Tablet OS and is reputed to offer a highly responsive and fluid touchscreen experience for apps and content services. It’s eventually supposed to replace the Blackberry OS in the company’s smartphones.

The Eclipse-supporting Neutrino, which runs on the PowerPC, x86, Mips, SH-4 and ARM chips, is supposed to be one of the most reliable, robust and secure (Common Criteria EAL 4+) real-time operating system architectures in the world. It supports mission-critical applications in everything from planes, trains and automobiles to medical equipment and the largest core routers that run the Internet not to mention, as Bloomberg does, the control systems in nuclear power plants and the US Army’s unmanned Crusher tanks. (Top that for reliability.)

The OS is POSIX-compliant so C-based code is portable. It supports Open GL for graphics-intensive 2D and 3D applications like gaming, and will run applications built in Mobile AIR as well as the new BlackBerry WebWorks app platform so apps (like Java apps) written for BlackBerry 6-based smartphones will also run on PlayBook.

The widget includes dual 3 MP front-facing, 5 MP rear-facing HD cameras for video capture and video conferencing that can both record HD video at the same time, and an HDMI-out port for presenting one’s creations on external displays. It has 1GB of RAM, way more than the iPad.

The dingus won’t be in retail store in the United States until early 2011 with rollouts in overseas to follow in Q2. However, developers and some corporate customers will get the widget in October for development and early testing. An SDK is supposed to be out in the next few weeks and developers can register for early access at www.blackberry.com/developers/tabletos. The thing is supposed to use industry standard APIs.

There’s no price yet although Reuters says it should come in at the “lower range of prices for consumer tablets already in the suddenly congested market.

See http://www.youtube.com/watch?v=eAaez_4m9mQ&feature=player_embedded.

IBM Buys Blade Network Technologies

IBM says it’s buying privately held Blade Network Technologies, a data center switching outfit it’s worked with since 2002, for some unrevealed price rumored to be around $400 million. Last Monday IBM bought the publicly traded Netezza for $1.7 billion.

Blade started out in 2002 as a Nortel unit spun out four years later as Nortel went down the tubes a private company backed by Garnett & Helfrich, Terry Garnett having been a Larry Ellison lieutenant.

Blade has a blade server, some top-of-rack switches and software to virtualize and manage cloud computing and other workloads. Its devices route data and transactions to and from servers. The widgetry can improve systems performance, deliver information faster, optimize virtual environments and lower energy use.

Blade claims half the Fortune 500 as customers, many of them joint clients with Big Blue. IBM says actually upwards of 50% of its System x BladeCenters currently attach to or use Blade products.

IBM expects to close on the deal in Q4. It wants to be able to manage the new, more demanding workloads. It says that with Blade, it can drive innovation at the systems networking level to speed the delivery of key information from system to system – for workloads such as analytics (an IBM favorite) and cloud computing – while reducing data center costs.

Since Cisco got into the server business last year, IBM has been expanding its network offerings through relationships with other networking companies. Now, without abandoning the others, it’s bringing one in-house.

Brian Truskowski, the general manager of IBM’s system storage and networking unit, said in a statement that “Blade will help IBM better integrate networks with its systems, optimizing them for workloads that require high-speed and low-latency performance.”

IBM said Blade’s software helps address the massive virtualization requirements of cloud computing environments. With servers more closely integrated with the network users can deploy thousands of virtual machines to run large application workloads in the cloud and reduce complexity through simplified management.

Blade’s got nine million ports installed. It’s also got its own Unified Fabric Architecture, an interoperable converged fabric for “Ethernet Everywhere.”

Blade, which has around 200 people, said last September when it picked up a B round of undisclosed size that it was valued at $230 million. The money came from NEC, Juniper, its original backer Garnett & Helfrich Capital and a “silent investor” only identified as an “industry leader.” It said then that it had passed six-million Ethernet switch ports. NEC, which got a board seat, uses Blade’s Ethernet switches for the network infrastructure for its SIGMABLADE blade servers.

Microsoft Kills its Blogging Platform

Microsoft is throwing in the towel on its six-year-old blogging platform Windows Live Spaces (née MSN Spaces). It’s sending its bloggers over to WordPress.com, a competing platform, where Microsoft’s current crop of scribblers can get free space.

The two have worked out a migration scheme and Microsoft will redirect URLs. Bloggers can use Microsoft’s facilities until the end of the year but have to be out by March.

Microsoft counts 30 million “active” users. In comparison WordPress, written in PHP and hosted op Apache, for Pete’s sake, powers over 8.5% of the web, is used on over 26 million sites and is seen by over 250 million people a month.

This is the new practical “why-waste-the-money” Microsoft, which has decided not to fight the social networking crowd with look-a-like services and simply integrate with them instead.

Oracle Sues Micron Technology

Oracle sued Micron Technology last Friday for overcharging Sun artificially inflated prices, an antitrust complaint, when Sun bought upwards of $2 billion worth of DRAM from the DRAM cartel between 1998 and 2002.

Micron was never charged when the Justice Department investigated it, Hynix Semiconductor, Samsung Electronics, Infineon Technologies and Elpida Memory eight years ago for collusion and criminal price-fixing because Micron co-operated and copped a plea. The upshot was that the conspirators, including Micron, wound up paying $731 million in fines and some of their executives drew jail time.

Sun sued some of the culprits back before it was Oracle. Now Oracle wants restitution and triple damages from Micron, which Sun never got around to settling up with. The suit claims Sun lost money and customers to the high DRAM prices caused by artificially stifled production.

‘Out, Out, Damn’d Cisco’: HP

Sounding as obsessive-compulsive as Lady Macbeth, HP said Monday that it had finally ripped all the -supplied WAN routers and switches out of its six data centers and replaced them with its own networking widgetry.

HP swore to go Cisco-free in April when its acquisition of network pioneer 3COM closed. You can’t very well give aid and comfort to a one-time friend that’s turned on you and now wants to sell servers.

The jihad took a motivated HP less than six months – coming in ahead of schedule with no data center downtime. It claims it’s getting better-than-expected performance.

The replaced routers and switches let HP’s data centers in Austin, Houston and Atlanta talk to each other and to the Internet. The company says it’s got an open standard-based network architecture now. It will now move on and install its own products on the fringes of the network connecting company facilities worldwide.

The exercise should help push HP’s networking front against Cisco. According to HP CIO Randy Mott, “When we talk to customers around the world, they’re looking for a full networking portfolio provider with open architecture enabling an alternative to the proprietary protocols they’ve been locked into for decades.”

CA Technologies Buys Hyperformix

CA Technologies said Tuesday that it’s buying Hyperformix, a small 50-man Austin, Texas server virtualization capacity management ISV, without saying what it is paying.

CA figures the widgetry will bolster its virtualization management portfolio and, in turn, enhance its cloud cred.

It says, “An important aspect of our virtualization and cloud strategies is to help customers overcome the ‘VM stall’ challenges they encounter as they roll out virtualization and progress to a dynamic, cloud-based data center architecture.”

VM stall is supposed to be what happens after organizations virtualize all the low-hanging fruit – their low-risk, low-impact systems – dev/test servers, web servers, file servers, internal applications – and stop short of virtualizing their tier 1 business services, customer-facing environments, enterprise-wide systems, third-party applications, multi-platform services and composite applications.

Hyperformix is supposed to move them off the dime by discovering how physical, virtual, hardware, software, storage, and network resources are being used and predicting what resources will be needed in the future. The upshot is supposed to be a mature dynamic data center and private cloud operation.

CA expects the acquisition to close by the end of December when Hyperformix will become part of the its virtualization and automation business. CA means to expand its integration with Hyperformix solutions to include its CA Virtual, CA Service Automation, CA Service Assurance and CA Cloud portfolios.

Hyperformix started out in life developing predictive software for machinery 20 odd years ago as Scientific Engineering Software. Post-2000 as Hyperformix it raised ~$34.8 million in debt and equity funding from such as Morgan Stanley Venture Partners, M/C Venture Partners and LTI Venture Lending.

Wikipedia says it has specific applications for managing the performance of SAP software and 20 patents approved and pending related to analytic and simulation modeling. CA Technologies and Hyperformix share a bunch of customers.

RightScale Pushes into Dev & Test

RightScale, the cloud manager, has moved into development and test with a cloud management solution that software development and testing teams can use to provision and use cloud computing resources.

The new RightScale Development & Test Solution Pack supports four development languages, PHP, Java, Ruby and .NET, and includes Java and PHP solutions from RightScale’s buddies IBM and Zend Technologies.

The IBM Java stack includes the IBM DB2 database and its WebSphere application server, available either in the freebie Community Edition or the commercial Enterprise Edition.

Zend, for its part, delivers a tested stack that incorporates PHP, the Zend Framework, required extensions and drivers, and a set of application management capabilities developers might find handy on the cloud.

Zend says that with the RightScale platform, developers can leverage Zend Server capabilities, such as code tracing, performance optimization and job queuing, to build and test scalable applications faster without spending time setting up multiple server environments.

RightScale’s software pack is supposed to be an easy on-ramp to cloud computing, especially for companies that aren’t ready to move production applications to the cloud, sort of a learning experience without any long-term commitment or risk.

The widgetry includes RightScale’s core Cloud Management Platform with two different user interfaces – a self-service interface designed for developers and testers to launch servers in the cloud, and an administrative interface for customizing RightScale’s standard environments.

It also comes with two pre-configured server environments tailored for different stages in the dev & test process: an “All-in-One” configuration for doing basic integration testing on a single server in the cloud and a “Multi-Tier” environment for more complex testing with separate load balancing, application and database servers.

Of course once in production, operations staff can use RightScale’s Cloud Management Platform to monitor and manage system performance, users and costs.

The widgetry, which is supposed to maintain more consistent, reproducible environments from design through production, is available as Software-as-a-Service (SaaS) for an introductory subscription price of $250 a month for the first year.

FalconStor CEO Leaves after Shenanigans

FalconStor Software president, CEO and chairman ReiJane Huai resigned Wednesday following “his disclosure that certain improper payments were allegedly made in connection with the company’s contract with one of its customer.”

The Long Island company issued a statement saying it “has fully cooperated with law enforcement authorities with respect to the ongoing investigation, and it will continue to do so. In addition, a special committee of the board has been formed to conduct a full internal investigation of these matters and the special committee has retained counsel to assist it in its investigation.”

Eli Oxenhorn, a current board member who’s association with Huai goes back to their Cheyenne Software days, has been named non-executive chairman; chief strategy officer James McNiel has taken over as interim CE0 and interim president; and CFO James Weber is also now interim COO.

The $90 million-a-year publicly traded availability house lost money last year. Its widgetry is sold OEM or branded through Acer, EMC, Fujitsu, Hitachi, Huawei, SGI, and others. Cheyenne was bought by CA, which is how CA came by its ArcServe backup line.

PalmPad Headed This Way

Stop me if this sounds familiar.

HP’s troops were out in force this week talking up the company’s mobile strategy. The company will major on the webOS 2.0 it got in July when it closed its $1.2 billion acquisition of Palm.

It’s dumped whatever Android tablets it had on the drawing board except for the ones it’s using to run its newfangled cloud-based printers and will field a Windows 7-based tablet ahead of its webOS-based PalmPad due out early next year.

It expects to own 17% of the global tablet market in 2013 and that market will probably be worth about $40 billion, it thinks.

WebOS is supposed to be better at running multiple applications simultaneously than Apple is.

HP has also dumped any Android- and Microsoft-based phone plans for Palm phones, which it will “aggressively” push through its giant PC base. It expects to stream music from the cloud to its smartphones, which will store the ones most listened to.

CodePlex Foundation Now OuterCurve

To avoid any more confusion between Microsoft’s open source forge site codeplex.com and the year-old open source CodePlex Foundation that Microsoft originally sponsored, the foundation has renamed itself the OuterCurve Foundation.

It says the forge shared its name on the hunch that there would be more affinity between the forge and the foundation but that hasn’t proved true. (Surprise. Surprise.)

It says it wanted a name that would make it an attractive investment for additional sponsors.

A branding company in Boston called Protobrand came up with the new name.

The foundation’s job is to provide a software IP management process and project development governance for corporate projects looking for open source developers. It currently has seven projects under management.

IBM filed a breach-of-contract/misappropriation of trade secrets suit in New York Supreme Court last week seeking to hold Joanne Olsen to her non-compete and stop her from going to Oracle for a year.

It’s gotten a temporary restraining order according to InformationWeek.

Olsen, with IBM for 31 years, was a general manager in IBM’s services unit and was hired by Oracle as senior VP of on-demand services, the SaaS versions of its software, reporting to none other than Larry Ellison, who’s aiming to do as much damage as he can to IBM.

IBM alleges that she knows too much about IBM, its operations, its growth strategies and its potential acquisitions to fall into Oracle’s hands.

IBM has gone to court a couple of times in the last couple years waving its non-competes around.

Oracle’s on-demand revenue in its fiscal fourth quarter just reported Thursday was $295 million, up from $204 million a year ago.

Oracle – on which as many fortunes hang these days as depended on its ancient namesakes – came in with fiscal Q3 earnings down 10% year-over-year at $1.2 billion, or 23 cents a share, Thursday on revenues up 17% to $6.47 billion.

The revenues beat Wall Street estimates of $6.34 billion as did Oracle’s non-GAAP earnings, which were up 9% to $1.9 billion, or 38 cents a share, a penny better than consensus. Evidently enterprise spending is coming back.

Oracle said its all-important new software license revenues were up for a second quarter in a row, this time by 13% to $1.7 billion – higher than expected – and up 10%, beating guidance, to $1.7 billion excluding Sun, which it finally acquired on January 26. Without Sun, it said, its total GAAP revenue was up 7%.

Oracle’s database and middleware revenue was up 11% to $1.24 billion. Applications new licenses were up 21% to $477 million.

Software license updates and product support revenues were up 13% to $3.3 billion. Oracle’s operating income was down 5% to $1.8 billion, and its operating margin was 29%, impacted by Sun.

Oracle gave some credit to expense management for its results.

Oracle president Safra Catz, responsible for getting the Sun deal closed despite EC resistance, said, “Sun integration is going even better than we expected. We believe that Sun will make a significant contribution to our fourth-quarter earnings per share as well as meet the profitability goals we set for next year.”

Oracle figures Sun is a curiosity that draws crowds and that it can now get an audience with any CIO. A recent CIO meeting brought in 50 more than the 125 invited; most had to travel and 91% were new.

Oracle’s other president Charles Phillips said Exadata – Oracle’s now Sun-base warehouse appliance – “is the fastest growing product in Oracle’s history. Introduced a little over a year ago, the Exadata pipeline is now approaching $400 million with Q4 bookings forecast at nearly $100 million. This strengthens both sales growth and profitability in our Sun server and storage businesses.”

And they laughed when Oracle said it would use Sun to go into the hardware business. Oracle is using Exadata like a stick to beat IBM about the head and shoulders, claiming it’s better than anything IBM’s got.

Hardware revenue from Sun came to $458 million, 7% of revenue. Total contribution was $596 million, better-than-expected. Customers are supposedly responding to the acquisition. Oracle is refusing to sell Sun products at a loss – like those great HPC deals that caused Sun to bleed – and is dropping third-party products like Hitachi storage that Sun distributed, preferring to stick with Sun’s own IP. It said it was not canceling Sun products and is hiring “aggressively” for Sun, paying on net, not gross.

Apparently Oracle got a deal with one of the hush-hush military agencies for Sun Rays that promises to require lots of units over time.

More support for Sun products is required, it said, especially apparently for the channel.

CEO Larry Ellison claimed, as he is wont to do, market share gains against rival SAP. “SAP’s most recent quarter,” he said, “was the best quarter of their year, only down 15%, while Oracle’s application sales were up 21%. But SAP is well ahead of us in the number of CEOs for this year, announcing their third and fourth, while we only had one.”

Larry predicted dire consequences for SAP and its 25-year-old proprietary technology against Oracle’s soon-to-be Fusion-based rewrite of all its applications. He claimed SAP’s customers are “nervous” and that the company can’t make any money selling its long-delayed Business ByDesign on-demand software to companies with less than 100 people with a different sales force. It’s a “distraction,” he said.

With SAP down double digits and Oracle’s “stunning” returns in database, middleware and applications, “No wonder SAP is so unhappy,” he said, playing on SAP’s recent explanation for why it fired its last CEO.

Catz predicted that Oracle’s total revenues this quarter – Sun’s first full quarter as part of Oracle – would be up 35%-40% to $9.3 billion-$9.6 billion, with non-GAAP earnings of 52 cents- 56 cents a share. Revenue from new licenses is supposed to be up 3%-13%. She called the forecast “conservative,” hard apparently on conservative.

Oracle finally closed on its delayed acquisition of Sun Tuesday, leaving local entities to shift for themselves according to local laws and sidestepping MySQL creator Monty Widenius’ hopes of Russian and Chinese regulators stalling the merger.

Widenius will now presumably revert to his quixotic Plan B and appeal the European Commission’s clearance last week, a green light that looked really iffy there for a while.

Oracle CEO Larry Ellison got out ahead of his own announcement Wednesday and started telling the press Tuesday evening that – contrary to Oracle’s usual practice with an acquisition – he intends to hire more people at Sun than he fires.

The next day he tore into the “highly irresponsible” reports last week that claimed that Oracle would lay off half of Sun’s 27,000 or 28,000 people, calling them “garbage” and scolding their Wall Street author and his minions saying they should be ashamed of themselves for making Sun suffer more angst.

It’s still not exactly clear exactly how many more Sun people will get the ax. Heck, it’s still unclear whether Sun cut the 3,000 it said it would in October or if the 27,596 people that worked there at the end of September are still there.

Depending on the moment – as is often the case with Larry – it appears Oracle will cut somewhere between 1,000 and 2,000 people, presumably folks in overlapping functions, and that it means to hire 2,000 more salesmen, engineers and support personnel.

Oracle executives, new and old, were sporting “We’re Hiring” buttons on their lapels Wednesday and promising to pay new hires more than they’re making now.

According to Ellison, “We’re not cutting Sun to profitability. We think Sun’s a growing business.” He expects it to take back share in servers and storage.

Oracle’s CFO Jeff Epstein mentioned something about paying on margins, not revenues. Still Oracle said it means to have the highest-paid sales reps in the business.

Ellison Tuesday struck a go-it-alone pose, seeming to burn his bridges with the IBMs and HPs of the world that sell Oracle’s software on their systems. “It took us a while to decide that we would be better off with all the pieces, and not working with partners,” he told the Wall Street Journal. He probably wishes he hadn’t said that.

He’s apparently intent on dumping Sun’s resellers, though, at least those that don’t add any value, “starting this week.” He didn’t define value and it’s probably a pretty high threshold.

“Sun has wonderful engineering,” he told the New York Times, “but they didn’t seem to like selling very much. The partner model was disastrous, and we are immediately changing that.”

Instead Sun will sell direct – at least to its 4,000 top customers which account for 70% of its revenues – using product specialists this time, not generalists and sales will include two new purpose-built pre-assembled systems designed for Oracle software that are supposed to come out this year. What exactly is unclear.

Oracle’s Exadata data warehouse, the appliance that now runs on Sun hardware rather than HP’s, Oracle’s singular experience with hardware so far, reportedly has a $100 million pipeline – or maybe it’s hundreds of millions. Larry was a little fast and loose with the number.

It may be delusional, but he claims all of Oracle’s myriad database sites are Exadata candidates.

The Exadata box will be expanded into other uses and serve as the model for Oracle’s Back-to-the Future vision of complete, purpose-built, task-specific, integrated systems whose components – from chips through applications – all come from Oracle like the mainframes of TJ Watson’s IBM in those bygone days before PCs and industry-standard servers convinced people that they Swiss Army knives.

Ellison is in the midst of a profound multibillion-dollar love affair with the IBM of the 1960s, which he calls “the most important company in the history of the earth.” Users are supposed to take solace from the fact that Oracle’s retread vision has been done before by Big Blue. It’s supposed to result in all parts and systems being optimized for the purpose they are meant to serve and being cheaper than assembling best-of-breed components from multiple vendors. Oracle even means to replace users’ IT administrators who screw things up when they change things. Not that Sun won’t continue to sell general-purpose machines – it will apparently – but the point of the exercise is application performance.

Oracle claims it’s the only company around that can deliver complete systems: IBM lacks the applications (not to mention that its database is a decade behind and uncompetitive except on mainframes). Microsoft doesn’t have the hardware, management or vertical apps. HP doesn’t have the apps, middleware or a database and its virtualization is thin. SAP just has its horizontal software, a dash of middleware and a thin database.

Frankly Sun under Oracle doesn’t sound that much different than Sun pre-merger.

Like an American Indian making use of all the parts of the buffalo he just killed, Oracle doesn’t seem to be discarding any of Sun’s widgetry – and it took it five hours and scads of overheads just for it to hit the bullet points of its salvage job. At least for the customer-calming moment everything, it seems, even overlapping products, will be sucked up into Oracle’s integration scheme (with Oracle’s remaining ascendant) and in the process Oracle means to jack its R&D budget from $2.8 billion last year to $4.3 billion now that Sun’s on board.

Before Oracle bought PeopleSoft in 2004 and started on its world conquest R&D cost it just $1.5 billion a year. Sun spent $1.6 billion in the year ended last June. Apparently Oracle figures to do more than Sun with a tad less.

The increase in R&D spending is supposed to start in Oracle’s 2011 fiscal year, which begins in June.

The investments will be applied across-the-board to Sparc chips (there’s more on the roadmap now sans Rock), Solaris and Linux, the Sun Ray thin client (ah, remember Larry and the network computer, he’s finally got one), Java middleware, 7000 ZFS storage, Flash, archiving, virtualization and software.

Oracle vowed to improve the problematic open source database MySQL that was almost the merger’s undoing and thrust OpenOffice onto the web with an online version dubbed Oracle Cloud Office aimed at the same enterprise crowd that Google, IBM and Microsoft are shooting for with similar widgetry.

MySQL, part of a global business unit dedicated to open source along with InnoDB, is supposed to be made part of the Oracle stack and integrated with Enterprise Manager, Secure Backup and Audit Vault.

As much as Ellison hates the name cloud computing, Oracle is now in the cloud computing business offering the building blocks for both public and private clouds. He also trashed VMware as “point solution,” lacking Oracle’s integration. “VMware’s not integrated with anything,” he said.

The Java programming model is supposed to be extended to emerging application development paradigms like RIA. Java projects like HotSpot, JRockit, NetBeans – even Glassfish, the Java application server, despite Oracle’s acquisition of BEA – live on but they it won’t be Oracle’s enterprise cards. JavaFX is another matter. Java ME and Java SE APIs are supposed to be unified to recapture Java’s old “write once, run anywhere” formula and ME optimized for new platforms like IP TV, Blu-ray and emerging embedded devices.

Ellison claimed that it doesn’t matter if Sun doesn’t monetize Java. BEA and Oracle make money on Java and now Oracle is bigger than IBM in middleware. “Where the money comes from is less important,” he said.

Oracle continues to maintain that it can squeeze at least $1.5 billion in operating profits out of Sun year one despite the billion in losses the company has wracked over the last decade so it’s been widely assumed that the only way it can do that is by slashing and burning its way across the Sun campus.

Ellison, however, claims making Sun profitable quickly is “very easy to fix.” If so, former Sun CEOs Scott McNealy and Jonathan Schwartz are sure gonna look dumb. Schwartz, by the way, is out; Ellison’s looking for a place to put Scott. Apparently they’re still talking about what his job might be. Can you see Scott working for Larry? Hmmm.

Anyway, one of the ways to this profit nirvana – other than limiting the number of configurations sold – a move reminiscent of 20 years ago when Oracle railed against the cost of supporting so many Unix databases – is to change Sun’s build-to-stock policy to a build-to-order one, a supply chain renaissance that could take until June.

The shift – and Oracle didn’t detail what the savings would be – will involve shipping from a cutback number of plants that make the hardware out of components coming from half the number of suppliers Sun used – and doing away with Sun distribution centers. The plants will drop ship.

Oracle gave the impression that Sun pissed away a lot of money on excess parts inventories, obsolescence, inaccurate forecasts and the freight to return systems that needed to be retrofitted to meet what the customer ordered.

Oracle also figures that leveraging its infrastructure will lower the cost of finance, legal, marketing, HR, procurement, IT and other back-office activities.

Oracle is supposed to use Sun’s line of x86 servers only for high-end clusters rather than compete with HP and Dell for low-margin commodity sales and focus on its high-end Intel-bucking Sparc/Solaris machines. Support is supposed to be automated, standardized and simplified by the fact that the whole package comes from a single supplier that knows all its secrets. Oracle figures Sun will do better if its support attach rates are improved. MyOracleSupport will be the access portal for both Sun and Oracle users.

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