Oracle CloudWorld 2024 – The AI story continues

LNS Research ’s Vivek Murugesan and Niels Erik Andersen attended Oracle CloudWorld 2024 in Las Vegas to follow Oracle’s progress in manufacturing operations software. More than 15,000 people joined us at the conference.

The conference's declared theme was AI, AI, and AI, and while 甲骨文 is making real progress in this field, other areas also showed significant improvement. We’ll get back to AI later in this blog post, but first, we want to explore the other fields where Oracle is advancing.

Customers

CEO Safra Catz has taken on the customer representative role, and it is starting to show results. Not only did we see an increasing number of customer presenters on the main stage and in breakouts, but the sentiment from customer attendees also seemed to be up. This is not by chance; Oracle is reporting increased customer satisfaction, and they are investing significantly in both customer success and implementation-partner success, which previously had been an Achilles heel.

Data

At the core of Oracle’s business is data, and we are seeing a continuation of the investments in Oracle’s Autonomous database with the intent of reducing human errors in database configuration and operations.

Oracle Database 23ai continues to prove that relational databases are expanding into multi-modal databases, with a continuation of the theme from 2023, when they introduced the ability to treat the same data as relational, JSON documents and graphs.

The support for vector databases within the Oracle database is a significant enabler of the integrated Generative AI features as it allows for searching for closeness of features in data such as images. It has become common to add Retrieval Augmented Generation (RAG) to combine business-specific data with Large Language Models (LLMs) and Oracle is taking full advantage of this capability.

AI and Agents

Let’s get back to Oracle’s stated goal for the conference, AI. Oracle has partnered with Cohere to enhance Oracle Fusion with Generative AI. Oracle first entered the GenAI field cautiously, with the first GenAI prompts being pre-engineered for their users to avoid some of the early challenges we have seen in the market. Oracle has now expanded its use of Generative AI and allows users to write their own prompts. Oracle is very deliberate in its approach to AI; it treats each class of prompts as a product feature with intentional capabilities instead of smearing a thin layer of GenAI on top of the product. Oracle’s partnership with Cohere is strong, but they have an open approach where they support multiple Foundation Models (FMs) and Large Language Models (LLMs).

While Oracle entered both the cloud market and GenAI later than some of its competitors, it looks like the saying “the second mouse gets the cheese” may have some truth in this market. As promised at the 2023 OCW conference, Oracle has added more than 50 new GenAI features to Oracle Fusion. They are, however, not done and are now promising more than 50 AI Agents to be added over the next year. AI Agents are software applications that “do work” in the background. These applications can either be triggered by an action, such as uploading an image to be processed, or operate independently without user input. We see an increasing interest in AI Agents across the industry, and Oracle is at the forefront of implementing these capabilities.

There is a significant proliferation of Generative AI across all software vendors in the market. We have reached a stage where GenAI is no longer a differentiator; it is an expected feature. This does add a significant burden on these software vendors. Oracle’s approach is that GenAI is not free, but it is included in the product.

The combination of all the AI and data capabilities with Oracle’s low-code environment APEX is opening up for Generative Development where whole applications can be developed with AI assistance in a supportable tool.

Oracle Fusion in the manufacturing space

Oracle is a data-centric company, but it is fully aware that people need applications to use this data. Since 2011, Oracle has been on the path to creating Oracle Fusion to unify all the acquired applications. Fusion has been a long journey; however, Oracle has been disciplined in its approach, with a consistent database back-end and applications built using the common Redwood user interface.

Oracle is investing in Smart-Manufacturing-Operations, with the first investments being maintenance and production. Oracle has followed LNS Research advice to create persona-focused applications and demonstrated the following offerings:

·???????? Operator Workbench

·???????? Maintenance Technician Workbench

·???????? Production Workbench

·???????? Maintenance Supervisor Workbench

Each workbench provides a user interface tailored to the functions of each persona. While Oracle is working on expanding its connectivity to the plant floor, the capabilities are still primarily related to interacting with the user personas rather than the equipment.

Steve Miranda , EVP of Oracle Applications Development, leads the application development work. This year, it was exciting to see that Smart Operations in Supply Chain and Manufacturing took center stage at his keynote. Previously, finance, planning, human capital, and the life sciences service industry have been at the center, so the shift to manufacturing is exciting for LNS Research and the manufacturers who use Oracle Fusion.

Miranda was joined on stage by Zebra Technologies ’ CIO, Matt Ausman. Zebra is an Oracle customer and partner. It offers technologies to streamline workflows and material flows on the plant floor, linking the frontline to the business.

LNS Research met with two of Oracle’s manufacturing customers: a global food packaging specialist and a large USA-based builder of manufactured and modular homes. Both companies have adopted the core Oracle Fusion capabilities and are expanding into manufacturing operations. They are both early adopters and are working closely with Oracle to define the software's manufacturing capabilities. We are eager to hear more from them as they achieve benefits from using the technology in daily operations.

Partners

Last year, Oracle created partnerships to run Oracle Cloud Infrastructure (OCI) inside Microsoft Azure and Google Cloud Platform (GCP). This year, Oracle joined forces with Amazon Web Services (AWS) and announced a similar partnership. This means that OCI is an option for all the dominant cloud providers in the industrial operations space. This is not just a software partnership; Oracle is building OCI data centers inside Azure, GCP, and AWS data centers.

There are multiple advantages to this approach. Oracle Fusion only runs on OCI, so it is a prerequisite for a user who wants Oracle’s applications. Oracle brings other benefits to the combined solution: OCI is known for its high performance and cost-effectiveness, and they do not charge an egress fee, unlike many other cloud providers. The partnerships bring Oracle’s Exadata technology to more cloud providers and also benefit from Oracle’s partnership with NVIDIA for Generative AI. The combination of OCI with Azure, GCP, and AWS allows customers to get the best from both worlds without straddling multiple data centers with high-latency communication.

The partnerships have also been strengthened on the consulting side with the “One Oracle” approach, which emphasizes customer satisfaction. The number of certified Oracle Consultants has grown by 48%, and Oracle has increased its emphasis on services for training, preparation, implementation, go-live, and operations. They are instrumenting their software to continuously improve and deliver new software versions every quarter.

Instead of creating yet another walled garden, Oracle is investing in open Application Programming Interfaces (APIs) published on GitHub. This empowers the partner ecosystem to embrace Oracle’s applications and extend the capabilities with their own functionality, enabling innovation outside Oracle’s organization without requiring changes to Oracle’s core software. ?The approach is well-aligned with LNS Research’s Reference Architecture, which encourages a service-oriented architecture with well-defined APIs.

Compared to many of the established industrial software providers, Oracle has limited capabilities in the Industrial DataOps software space; this is an excellent opportunity for Oracle to expand its partnership with software providers that would benefit from Oracle’s business software suite.

With the emphasis on partnerships, Oracle is reporting that it is migrating implementations from SAP, Salesforce, and AS/400 with standard implementations and no custom code changes to the core.

Oracle is sending a message to the market that it is open for business. It is willing to partner with companies that previously would have been perceived as competitors to OCI so that it can offer the services that customers want to buy.

The path forward

LNS Research is excited that Oracle is investing in manufacturing operations and closing the gap between business and plant floor systems.? Oracle has made significant progress in delivering Oracle Fusion, strengthening OCI, and continuing to invest in the core database technology while expanding its partnerships with Microsoft, Google, and AWS.

It is important to remember that Oracle's path into manufacturing operations is not without risks. Many software companies have become overwhelmed by the complexities and diversity of manufacturing and have struggled to turn their investment into a commercial success. The OT landscape is very different from the IT landscape, with far more technology providers and an expectation that technologies will last for decades. It will be critical for Oracle to draw the line of abstraction and be clear about how deep its products will go into this domain.

While Oracle has made good progress, it is still early on its journey to the plant floor, and many capabilities have to be developed to match the offerings that Oracle has in other industries. Other companies have spent many decades building their suite of industrial software. These companies have deep application and industry vertical capabilities that Oracle has yet to achieve. We believe that Oracle can continue its partnership journey and benefit from these investments.

We are looking forward to Oracle's expansion of its manufacturing footprint and will be following its customers closely.