Oracle's Hardware Sales Down Sharply Again

Three months ago, Oracle reported financial results for the company's second financial quarter. Its hardware sales declined 14% year over year, to $953 million. Oracle predicted that hardware sales would fall again anywhere from 4% to 14% in the next quarter (at constant currency).

Actually they fell 16% year over year, to $869 million. Quarter to quarter they fell about 9%.

For perspective, Oracle claims that their nascent Exadata/Exalogic/Exalytics business is fast growing, but that only means the far larger Oracle/Sun Solaris business is collapsing even faster. Also, the earnings report reveals that "hardware systems support" (a.k.a. hardware maintenance) declined only 3% (constant currency, year over year). So Oracle's remaining customers are caught in the perfect storm of a cratering Oracle/Sun Solaris business combined with escalating maintenance prices. Fabulous.

Of course I realize that hardware sales can be cyclical, but Oracle's hardware problems are deeply structural. Oracle introduced servers with the new SPARC T4 processors in September, 2011, which took the SPARC CPU up to 3.0 GHz. This past quarter should have been a terrific one, or at least a decent one, given that Oracle/Sun model cycle. Instead it was awful again.

I predict that Stuart Alsop now has the opportunity to correctly predict when the last Oracle/Sun Solaris server will be unplugged.

by Timothy Sipples March 21, 2012 in Financial, History, Systems Technology
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My Mainframe-Related Pet Peeves

In no particular order:

  1. "Green screens" are good enough. No, they're not. Do you force your users to submit their input and receive their output via punched cards? User interfaces change and evolve, and appearance often matters. Stanford's IBM mainframe served the world's first interactive Web application. If you haven't provided Web user interfaces on your mainframe to serve users' demands, what on earth are you waiting for?
  2. Everyone must use Web interfaces. Some users prefer to continue with their familiar, fast, and efficient 3270 terminal user interfaces. Let them coexist. One size does not fit all.
  3. We haven't implemented encryption yet. Every mainframe has built-in encryption support. Why are sensitive account numbers, Social Security numbers, credit card numbers, financial details, and passwords still flying around your network, internal or/and external, "in the clear"? Turn encryption on. Just do it.
  4. FTP overuse. FTP is not an application integration solution! Connect two applications using FTP and you've automatically converted two or more business process steps into a "we might get around to it, eventually, if you're lucky" business process. Do you think your customers want that? And why are you copying all that sensitive data anyway? To make it easier for bad guys to get?
  5. We don't allow TCP/IP connections to our mainframe "for security reasons." Congratulations, that "security" policy inevitably leads to the least possible secure environment you can imagine as the business finds every possible workaround to keep doing business — a true security nightmare. Let the z/OS Security Server and RACF do their jobs, please.
  6. "Open" platforms and storage. If you connect exactly the same storage unit on your SAN (that you're already using for everything else) to a z/VSE system in exactly the same way, does that suddenly make your storage unit "closed"? If you're one of the people responsible for typing in activation keys to make sure Microsoft Windows can actually function, are you the same person who thinks that z/OS and Linux on z, both which eschew keys, are "closed"? Words should have consistent meanings. Many IT vendors have thoroughly debased the word "open," and some of us have fallen for that particular word game. It's past time they stop — and that all of us wise up.
  7. "Mainframes are expensive." You know what's expensive? Not knowing the value of your financial holdings during a financial crisis because you've scattered bits of your portfolio records into little servers — that's expensive. Letting unreleased Michael Jackson records escape before you can monetize them. Billions of dollars of credit card fraud. Building yet another massive data center. Paying for 60 more licenses of Brand O middleware (this week). Adding another 20 staff to your payroll (this week) to support the IT mess you've implemented. You know what's not expensive? Mainframes. Stuff that works well isn't expensive.
  8. "But that would require us to add MIPS...." So what? Business growth is never free, but it's darn inexpensive if it's a mainframe that's growing. And do you see MIPS listed as a currency, next to the yen, dollar, euro, and pound? It's not. IBM has different prices for different workloads.
  9. Mainframe chargeback regimes. Everybody does them wrong. It's only a question of how wrong. Just because a mainframe, as a standard feature, lets you count and apportion various technical quantities like CPU-seconds doesn't mean they have much cost accounting significance. You certainly shouldn't be putting prices on those technical quantities while everything else in your data center (and beyond) remains uncounted, nor should those prices be different than true marginal costs (which can often be zero or near-zero).

Do you have any more I should add to the list?

by Timothy Sipples March 7, 2012 in Economics, Financial, Security
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Sony Still Needs a Mainframe

Hackers illegally accessed and downloaded 50,000 music tracks from Sony, including extremely valuable unreleased tracks performed by the late Michael Jackson. Sony has suffered multiple, serious, recurring security breaches.

by Timothy Sipples March 6, 2012 in Security
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