Here we are at the beginning of a new year… January 2013… and it is time to look at what happened during the last quarter of the previous year in the database industry. Last year, 2012, was another active and entertaining year for fans of data and database systems. As usual, the year was highlighted by acquisitions, lawsuits, healthy earnings, and new product announcements… and the fourth quarter of 2012 gave us more of all those things. So as we move forward into the promising New Year, let’s take some time to review the happenings in the DBMS marketplace during the past quarter. And we will begin by examining the acquisitions of Q42012.
Acquisitions in the Fourth Quarter of 2012As has become typical in the database market, the fourth quarter continued the data-related industry consolidation, particularly among the major DBMS providers. Oracle was particularly active with two acquisitions during the quarter.
In mid September, Oracle announced that it has entered into an agreement to acquire SelectMinds, a provider of cloud-based social talent sourcing and alumni management applications.
SelectMinds applications enable organizations to empower recruiters, hiring managers and employees to leverage social connections to distribute job opportunities, source higher quality referrals, market their employment brand and manage corporate alumni relationships.
Together, Oracle and SelectMinds expect to create a comprehensive recruiting, candidate sourcing, and talent management solution for organizations to reach quality referrals through social recruitment. The addition of SelectMinds is expected to further extend Oracle’s social and mobile initiatives into talent management and is already fully integrated with Oracle Cloud Recruiting, Performance Management and Human Capital Management solutions.
“Oracle’s proposed acquisition of SelectMinds represents a strong endorsement of SelectMinds intuitive social sourcing technology and the value customers have achieved with our solutions. We’re excited to be a part of Oracle, and look forward to combining our resources to better serve and support customers with more global scale,” said Anne Berkowitch, CEO and Founder, SelectMinds.
Then on November 8, 2012, Oracle announced that it has entered into an agreement to acquire Instantis, a provider of cloud-based and on-premise project portfolio management (PPM) solutions. The transaction is subject to customary closing conditions and approvals and is expected to close this year.
Instantis enables IT departments, product development teams, and business process leaders to manage multiple corporate initiatives, and improve strategic alignment, execution, and financial performance. By combining Instantis with Oracle’s Primavera and Fusion Applications, the company expects to provide a comprehensive set of cloud-based and on-premise Enterprise Project Portfolio Management solutions.
“Organizations realize the need for a more simplified approach to address project portfolio management initiatives – and yet most solutions are too complicated and expensive to deploy,” said Mike Sicilia, senior vice president and general manager, Oracle Primavera. “By adding Instantis, Oracle can help customers gain complete visibility and control of their mission-critical project initiatives using a top-down approach suited for projects throughout the entire organization.”
Finally, in the middle of December, Oracle announced that it had acquired DataRaker, a provider of a cloud-based analytics platform that enables electric, gas and water utilities to leverage vast amounts of data to optimize operational efficiency and improve the customer experience. DataRaker was a private company founded in 2007. Terms of the deal were not disclosed. Oracle can leverage DataRaker’s cloud-based solutions to offer utilities a complete Big Data solution for improving operational performance and enhancing customer experience.
“Big Data created by smart meters and sensors has presented utilities with an enormous opportunity to improve operations and deliver better customer service by acting on the unique insights that can only be found by understanding the massive amounts of data coming from their customers and networks,” said Rodger Smith, Senior Vice President and General Manager, Oracle Utilities. “With DataRaker, Oracle can provide customers a complete and integrated set of products to further unlock efficiencies and create data insights that maximize business value.”
But Oracle was not the only acquisitive one this quarter. IBM, too, dabbled by acquiring Bufferfly Software Ltd in late September. The company is privately held with headquarters in Maidenhead, England. Financial terms were not disclosed. Butterfly will become part of IBM’s Software Group.
Butterfly Software is a global provider of innovative applications that help organizations discover, intelligently analyze and automatically migrate data center infrastructures. Butterfly frees organizations from the cost and risk of maintaining legacy storage and backup and recovery environments, allowing consolidation of all enterprise data onto the most efficient and effective strategic technology.
In December, IBM also announced its intent to acquire StoredIQ, Inc., a privately held company in Austin, TX. Terms of the deal were not disclosed.
On its website, StoredIQ listed its mission as “to enable organizations to actively manage their vast and ever-increasing amounts of unstructured data.” The company provides solutions for data intelligence, e-discovery and information governance.
The StoredIQ technology will improve IBM’s Big Data efforts as well as its governance and compliance solutions. The addition of StoredIQ to IBM’s Information Lifecycle Governance suite gives organizations more effective governance of the vast majority of data, including efficient electronic discovery and its timely disposal, to eliminate unnecessary data that consumes infrastructure and elevates risk. As a result, business leaders can access and analyze big data to gain insights for better decision-making. Legal teams can mitigate risk by meeting e-discovery obligations more effectively. Also, IT departments can dispose of unnecessary data and align information cost to value to take out excess costs.
“CIOs and general counsels are overwhelmed by volumes of information that exceed their budgets and their capacity to meet legal requirements,” said Deidre Paknad, vice president of Information Lifecycle Governance at IBM. “With this acquisition, IBM adds to its unique strengths as a provider able to help CIOs and attorneys rapidly drive out excess information cost and mitigate legal risks while improving information utility for the business.”
Not to be outdone, in the middle of October, Microsoft and StorSimple Inc. announced that Microsoft had reached an agreement to acquire StorSimple. Terms of the deal were not disclosed.
“Customers faced with explosive growth in data are looking to the cloud to help them store, manage and archive that data. But, to be effective, cloud storage needs to integrate with IT’s current investments,” said Michael Park, corporate vice president, Server and Tools Division for Microsoft. “StorSimple’s approach helps customers seamlessly integrate on-premises storage with cloud storage through intelligent automation and management.”
StorSimple solutions combine the data management functions of primary storage, backup, archive and disaster recovery with cloud integration, enabling customers to optimize storage costs, data protection and service agility.
StorSimple appliances were named 2011 Products of the Year in the Storage Systems category by Storage Magazine/SearchStorage.com.
But perhaps the most intriguing acquisition of the quarter was made by Actian Corp., the current home of Ingres, but where the company is promoting itself as a Big Data and cloud development solution provider.
On November 21, 2012, Actian Corporation announced its intention to acquire Versant Corporation for $13.00 per share. The cash transaction prices Versant at approximately $37 million. Versant’s Board of Directors unanimously approved the Actian Acquisition Agreement and authorized termination of Versant’s previously announced merger agreement with UNICOM Systems, Inc. The $13/share offer from Actian eclipsed the $11.50 offer from Unicom by about 13 percent, and by 32 percent over Versant’s closing price of $9.85 per share on the last trading day before the Unicom acquisition became public.
“We are very pleased to join forces with Versant to create a dynamic platform of data management capabilities to help all our customers extract maximum business value from the ever increasing growth in data. Many of the world’s most successful companies are demanding ever more powerful and more complex data management solutions to stay ahead. Today we have leadership with innovations such as the record breaking Vectorwise analytics database and combined with Versant we have exciting plans to help data focused companies become even more successful,” said Steve Shine, Actian’s Chief Executive Officer.
If you’ve been around the world of data management long enough, you probably remember that, at one point, Versant was one of the object database management vendors looking to supplant relational systems. Of course, that never happened. And although Versant still markets and sells the Versant Object Database, the company has extended its offerings into the Big Data arena, rebranding them as NoSQL.
It will be interesting to watch Actian as it integrates Versant toward delivering capabilities for managing complex information with high performance, business intelligence and advanced analytics.
By The Numbers
Let’s turn our attention to the quarterly financial announcements of the major data and database organizations: Oracle, Microsoft, IBM, and SAP. This time, we’ll start with SAP and their record achievement in quarterly software earnings.
SAP’s Fiscal Second Quarter
SAP announced its best ever second quarter performance with software revenue of more than 1 billion euros.
“Our customer-focused innovation strategy is delivering exceptional business value for our customers and driving record results for SAP in an uncertain macro-economic environment,” said SAP Co-CEOs Bill McDermott and Jim Hagemann Snabe. “SAP stands apart in its ability to bring its customers innovations in cloud, mobile and in-memory computing on top of a proven, consistent and stable core. We will continue to provide game-changing solutions and remain on track to achieve our 2015 goals.”
Software revenue grew to 1,059 million Euros, an increase of 26 percent over the same quarter last year. Software and software-related service revenue came in at 3.12 billion Euros, representing an increase of 21 percent. Total revenue was 3.90 billion Euros, an increase of 18 percent.
SAP is encouraged by its healthy sales of the HANA database system. Revenues from HANA in the second quarter of 2012 amounted to 85 million Euros, coming in at over three times as much as the immediate past Q1 earnings (28 million Euros) and almost four times larger than Q2 last year (22 million Euros). The company also touted healthy implementation numbers for HANA including more than 150 projects and over 350 customers using the in memory database platform.
IBM’s Fiscal Second Quarter
Although IBM registered a reasonable second quarter with better than expected earnings, currency fluctuations led to lower-than-expected sales. IBM reported second quarter earnings of $3.9 billion, or $3.34 a share, on revenue of $25.8 billion, down 3 percent from a year ago.
Wall Street expectations for IBM’s second quarter earnings were $3.42 a share on revenue of $26.27 billion. Fluctuations in currency resulted in a hit of about $1 billion to IBM’s revenue, which was $3.51 per share.
“In the second quarter, we delivered strong profit, earnings per share and free cash flow growth. This performance reflects continued strength in our growth initiatives and investments in higher value opportunities,” said Ginni Rometty, IBM president and chief executive officer. “These are fundamental elements of our long-term business model.
Revenues from the Software segment were $6.2 billion, flat (up 4 percent, adjusting for currency) compared with the second quarter of 2011. Software pre-tax income increased 8 percent and pre-tax margin increased to 35.9 percent.
Revenues from IBM’s key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $3.9 billion, flat (up 4 percent, adjusting for currency) versus the second quarter of 2011. Operating systems revenues of $628 million were flat (up 3 percent, adjusting for currency) compared with the prior-year quarter.
Revenues from the WebSphere family of software products increased 3 percent year over year. Information Management software revenues decreased 1 percent. Revenues from Tivoli software increased 2 percent. Revenues from Lotus software decreased 8 percent, and Rational software decreased 7 percent.
Oracle’s Fiscal First Quarter
Oracle announced fiscal 2013 Q1 revenues that were down 2 percent to $8.2 billion. New software licenses and cloud software subscriptions revenues were up 5 percent to $1.6 billion, while software license updates and product support revenues were up 3 percent to $4.1 billion. And hardware systems products revenues were down 24 percent to $779 million.
Operating income was up 7 percent to $2.9 billion, and net income was up 11 percent to $2.0 billion.
Like IBM, Oracle too, was impacted by currency fluctuations. Without the impact of the US dollar strengthening compared to foreign currencies, Oracle’s reported Q1 earnings per share would have been $0.03 higher at $0.44, up 24 percent, and Q1 earnings per share would have been $0.03 higher at $0.56, up 17 percent.
Oracle continued to boast about Exadata earnings this quarter. “Exadata, Exalogic, Exalytics and our other engineered systems grew more than 100 percent in the quarter,” said Oracle President, Mark Hurd. “For the full year, we expect to double engineered systems sales to well over $1 billion.”
Oracle’s Board of Directors also declared a quarterly cash dividend of $0.06 per share of outstanding common stock.
Interestingly, the company stopped breaking down its software revenue between database and applications, making it impossible to analyze the performance of these two sectors for the quarter.
Microsoft’s Fiscal First Quarter
Microsoft Corporation announced quarterly revenue of $16.01 billion its fiscal first quarter ended September 30, 2012. Operating income, net income, and diluted earnings per share for the quarter were $5.31 billion, $4.47 billion, and $0.53 per share.
These financial results reflect the deferral of $1.36 billion of revenue and $0.13 of diluted earnings per share, due to Windows and Office related upgrades and offerings.
The Server & Tools business reported $4.55 billion in first-quarter revenue, an 8 percent increase from the prior year period, driven by double digit revenue growth in SQL Server and more than 20 percent growth in System Center revenue.
“While enterprise revenue continued to grow and we managed our expenses, the slowdown in PC demand ahead of the Windows 8 launch resulted in a decline in operating income,” said Peter Klein, chief financial officer at Microsoft. “Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and Microsoft Business Division products as businesses commit to our technology roadmap.”
Microsoft reaffirmed its fiscal year 2013 operating expense guidance of $30.3 billion to $30.9 billion.
Legal NewsRegular readers of The Database Report know all about HP’s recent battles with Oracle regarding Oracle’s support, or lack thereof, for Intel’s Itanium processor. But for those who are not up to speed on the details, here is a short synopsis. Back in March of 2011, Oracle announced its intentions to stop developing applications for Intel Itanium microprocessors. This caused a rift with HP, which believes that Oracle was eliminating support for the chip in its software because of its recent foray into the hardware business (when Oracle acquired Sun, which did not have any systems built on Itanium). The bad blood all stems from HP’s belief that Oracle was in violation of a legal commitment the company had made to HP to offer software on Itanium systems. So HP took Oracle to court… back in the middle of 2011.
In early August 2012, a judge ruled that Oracle is bound by its commitment to continue producing software for Itanium. If you are interested in all of the gory details, you can read all about it here http://www.scribd.com/doc/101779820/endorse-85234-111CV203163-PSOD.
The result, though, was that in mid September 2012, Oracle announced that it would again start supporting customers running Oracle on Itanium hardware. Oracle’s intention is to release software updates for Itanium around the same time it support IBM’s Power platform. It will be interesting to see whether Oracle sticks to that timeframe. The court can force Oracle to support its software on Itanium systems, but it cannot really force Oracle to make it a priority.
So, Oracle is supporting Itanium again, at least for now. We will have to wait and see whether or not this becomes a lasting solution for Itanium users. I cannot imagine that Oracle will want to continue to support Itanium indefinitely though, so this matter may pop up again.
Oracle Open World and What’s Next for Oracle Database
Oracle always makes headlines during its annual Oracle Open World conference by making significant software announcements, and the 2012 conference was no exception. Oracle CEO Larry Ellison’s keynote session introduced Oracle Database 12c, which should become generally available sometime next year. The “c” in 12c stands for cloud and according to Ellison Oracle 12c is the foundation for an expanding cloud business.
Ellison touted Oracle Database 12c as the “first multi-tenant database” and highlighted the concept of Pluggable Databases. With Pluggable Databases, multiple tenants can co-exist in the same database. This capability will allow organizations to consolidate the number of database instances they support by sharing information for multiple Pluggable Databases within a single instance.
Oracle did not divulge all of the technical details behind how Pluggable Databases would be implemented but, at a high level, the database instance of today become two separate entities: one entity, referred to as a container, one will contain the metadata and the other will contain the actual user data. A single Oracle 12c instance will be able to run up to 250 user databases. Pluggable Databases should bring about many administrative and operational improvements such as easier upgrades, more robust security, and improved efficiencies.
Perhaps the biggest lingering question about multi-tenancy in Oracle Database 12c is how that will impact licensing. With existing licensing typically being by Oracle instance, if multiple database instances can be consolidated into a single instance that could reduce the software license cost to the end user. Will Oracle give up that revenue? I doubt it.
But Oracle 12c was not the only announcement made at Oracle Open World. The company also announced an updated version of its engineered database machine, Oracle Exadata Database Machine x3. This new version of Exadata includes 26 terabytes of DRAM and flash memory and according to Ellison it is designed to store all of your databases in memory.
The list price of Exadata X3 is planned to be the same as the existing Exadata product. No availability dates were announced.
IBM Information on Demand Conference
IBM also held its annual Information on Demand conference in Las Vegas, Nevada, in late October. I attended the conference and it was obvious that the big push at the conference was to promote IBM’s Big Data and analytics offerings.
The theme of the keynote general session was “Thinking Big.” The host was Jason Silva, who has been described at various times as “A Timothy Leary of the Viral Video Age,” “The new Carl Sagan,” or as Jason calls himself a “Performance Philosopher.” At any rate, he gave a strong performance waxing poetic on the benefits of big data and analytics in a rapid fire delivery that made me think perhaps he ingested too much caffeine before coming on stage. But he was entertaining and informative.
My favorite quote from the general session is this: “What used to fit in a building will soon fit in your bloodstream.” It is pithy, to the point, and makes you think, doesn’t it? And even though I’ve heard similar sentiments, I also enjoyed his observation that “We’ve become immune to the fact that 90 percent of the world’s data was created in the last 2 years”… largely, I think, because it added the spin that we all know and embrace that reality.
The highlight of the session was the announcement of the PureSystems PureData integrated system. When they rolled the box out on stage it was applauded loudly. More loudly, I think, than any of the humans on the stage. That had to hurt! But probably not, because PureData is very cool. It is the latest in IBM’s line if PureSystems appliances. This one is focused on data management. But there is no way for a single appliance to be able to handle everything you might want to do with data. That is why IBM rolled out three PureData systems, one for transactions, one for analytics, and one for operational analytics. You can learn more about PureData and PureSystems at http://www.ibm.com/ibm/puresystems/us/en/op-ad.html.
The IOD conference offered up a cornucopia of useful information spanning anything and everything you might want to know about in the world of data and information. It is the place to be every October if you use IBM hardware or software to manage data at your organization.
Postgres Sticks Its Head in the Cloud
In December, the open source DBMS vendor Postgres announced the availability of Cloud Postgres. Targeted at Web development, Cloud Postgres is well-suited for organizations looking to simplify database platform support. Cloud Postgres provisions an identical pair of servers positioned on physically distinct hosts. Via clustering, application performance and availability are improved.
Administration is also easier with Cloud Postgres because it comes with automation for installation, configuration, and monitoring of the PostgreSQL 9.2 clusters. And the cluster can be configured to make and retain two full backups with the ability to recover to any point between the oldest backup and the most recent segment.
Each Cloud Postgres deployment requires four virtual servers, four IP addresses, two firewalls and one VLAN. The service is not managed with the customer receiving root access to the instances.
In Other Fourth Quarter Database Related News
In late October 2012, John Chen announced his resignation from SAP. Chen, the former CEO of Sybase, joined SAP when the company acquired Sybase. “After 15 years of leading Sybase, I want to take on a new challenge. The integration of Sybase into SAP is complete and the business is in great shape,” said Chen. “Combining the organizations made sense and I am pleased with the direction of the mobile and database business of Sybase within SAP. The Sybase assets are contributing significantly to SAP’s success and benefitting from technology such as SAP HANA as well as the global reach of the company. I leave knowing that what we built is in good hands.”
Also in October, IBM appointed Christina Peters as the company’s Chief Privacy Officer. Peters will guide and oversee IBM’s global information policy and practices affecting more than 400,000 employees and thousands of clients. In her role as IBM’s Chief Privacy Officer, Peters will lead the company’s global engagement in public policy and industry initiatives on data security and privacy, and continue to serve on the advisory board of the Future of Privacy Forum. IBM was the first major corporation to appoint a Chief Privacy Officer in 2000 and has consistently applied advanced techniques and technologies across its global business operations and practices.
In late December, Oracle announced the release of Oracle NoSQL Database 2.0, a key-value database for Big Data implementations. Feature highlights of this new release include efficient large object storage and retrieval, improved integration with Oracle Database and Hadoop environments, and automatic rebalancing for storage and resources. Additional information can be found on the Oracle website at http://www.oracle.com/us/products/database/nosql/overview/index.html.
Also in December, Oracle announced the Oracle Big Data Appliance X3-2 and enhanced Oracle Big Data connectors. The Oracle Big Data Appliance X3-2 is a cost-effective, engineered system of hardware and software that has been upgraded to include Intel’s new processors and the latest release of Cloudera’s Distribution including Apache Hadoop (CDH) and Cloudera Manager, as well as the new Oracle Enterprise Manager plug-in for Big Data Appliance. Additionally, Oracle Big Data Connectors were enhanced to enable greater SQL access to Hadoop from Oracle Database and to enable more transparent access to Hadoop from R.
During the quarter Oracle also unveiled MySQL 5.6. A highly anticipated feature of the new version of MySQL is the Memcached API, which bolsters the performance of storing and retrieving database entries. Oracle also improved the MySQL Optimizer with new techniques for selecting, sorting, and returning results more efficiently. The InnoDB engine was tweaked to better handle concurrency and to allow full-text search. And more DDL operations can be performed without taking the database offline to make the changes.
Finally, Microsoft announced Project Hekaton, the intent of which is to deliver in-memory database technology in the next version of SQL Server. Microsoft’s biggest competitors have been embracing in-memory database technology and Project Hekaton is Microsoft’s response. The biggest differentiator for Microsoft appears to be that the in-memory capabilities will be delivered as part of SQL Server, instead of as an add-on piece of software or a separate DBMS. Microsoft is touting that early testers of the Hekaton in-memory technology have seen throughput that scaled to 250,000 transactions per second.
So Ends Another Year…And that brings us to the end of another year in the database marketplace. It was a typical year which saw acquisitions and lawsuits, strong financial performances and great new technology. If you manage or use data in your profession, you’ll want to keep up-to-date on the happenings in the realm of database systems during 2013, so be sure to check back with us every quarter to read each new edition of The Database Report on TDAN.com.
