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Oracle turns to innovation hubs to drive cultural and business shift to cloud

Oracle was founded in 1977. While it’s not exactly GE or IBM, which date back to the late 19th and early 20th centuries respectively, it is old enough to be experiencing a fair bit of disruption in its own right. For a good part of its existence, it sold databases to some of the biggest companies in the world. But today, as the marketplace changes and shifts from on-prem data centers to the cloud, how does a company like Oracle make that transition?

Of course, Oracle has been making the shift to the cloud for the last several years, but it would be fair to say that it came late. Plus, it takes more than construction some data centers and pushing out some products to change a company the size of Oracle. The company leadership recognizes this, and has been reasoning
at the highest steps of the organization about how to, from a cultural and business perspective, successfully transform into a cloud company.

To that end, Oracle has opened five innovation hubs over the last several years, with locations in Austin, Texas; Reston, Va.; Burlington, Mass.; Bangalore, India and Santa Monica, Calif. What are these centers hoping to earn, and how will it expand to the rest of the company the lessons learned? Those are gigantic questions Oracle must reply to make some headway in the cloud marketplace.

Understanding the problem

Oracle seems to understand it has to do something distinct to change marketplace perception and its flagging marketplace position. Synergy Research, a tight that tracks cloud marketplace share, reports that the company is struggling.

“For cloud infrastructure services (IaaS, PaaS, hosted independent cloud services) — Oracle has a 2 percent share,” John Dinsdale, majesty analyst and managing director at Synergy told TechCrunch. He added, “It is a top-10 player, but it is nowhere near the scale of the leading cloud providers; and its marketplace share has been steadily eroding.”

The news is a bit good when it comes SaaS. “Along with SAP, Oracle is one of the leaders in the ERP segment. But enterprise SaaS is much broader than ERP and across all of enterprise SaaS it is the No. 4-ranked provider behind Microsoft, Salesforce and Adobe. Oracle worldwide marketplace share in Q4 was 6 percent,” Dinsdale said.

The company knows that it will take a vast shift to change from an organization that mostly sold app licenses and mend agreements. It pushed those solid, sometimes so solid that it left IT pros with a sour taste in their mouths. Today, with the cloud, the selling landscape has changed dramatically to a partnership version. The company knows that it must change, too. The request is, how?

That will take an entirely brand-new reach to product development, sales and marketing; and the innovation hubs have become a kind of laboratory where engineers can try-out with more focused projects, and learn to present their ideas with goal of showing instead of telling customers what they can do.

And the juvenile shall govern

One path to change the culture is to infuse it with fresh-reasoning
, smart juvenile people, and that’s what Oracle is attempting to do with these centers, where they are hiring juvenile engineers, many right out of college, to govern the change with the aid of more seasoned Oracle executives.

They are looking for ways to rethink Oracle’s cloud products, to pull the services together into packages of helpful tools that helped unravel accurate business problems, from prescription opioid abuse to predicting avocado yields. The concept isn’t just to have some part of the company where people work on dream projects. They want them to relate to real business problems that results, eventually, in actual sales and measurable results.

Hamza Jahangir, team vice president for the cloud solution hubs at Oracle, says they look for people who want to dig into brand-new solutions, but they want a pragmatic streak in their innovation hub hires. “We don’t want just tinkerers. If the only problem you’re solving is that of your own boredom, that’s not the type of person we are looking for,” he said.

Executive buy-in

The concept of the innovation center actually began with CEO Mark Hurd, according to Jahangir. He had been working for several years to change the nature of the sales force, the one that had a reputation of strong-arming IT pros, with a brand-new era, by hiring people right out of college with a fresh reach.

Hurd didn’t want to stop with sales, though. He began looking at taking that same concept of hiring younger employees to steer that cultural shift in engineering, too. “About two years ago, Mark challenged us to think about how can we change the customer-facing tech workforce as the business version was moving to the cloud,” Jahangir said.

Hurd gave him some budget to open the first two centers in Austin and Reston and he began experimenting, trying to find the right kinds of employees and projects to work on. The funding came without of a lot of strings or conditions associated with it. Hurd wanted to see what could happen if they unleashed a brand-new era of workers and gave them a certain amount of emancipation to work differently than the traditional path of working at Oracle.

Changing expectations

Jahangir was very frank when it came to assessing customer’s expectations around Oracle moving to the cloud. There has been a lot of skepticism, and part of the reason for the innovation centers was to find pragmatic solutions that could show customers that they actually had modern approaches to computing, given a chance.

The general customer stance has been, “We don’t believe you have anything real, and we need to see true value realized by us before we pay you any cash,” he said. That took a fundamental shift to focusing on actual solutions. It started with the premise that the customers shouldn’t believe any of the marketing stuff. Instead, it would show them.

“Don’t bother watching a powerpoint presentation. request us to show you real solutions and use cases where we have solved real material problems — and then we can have a discussion.”

Even chairman and company founder Larry Ellison recognizes the relationship and selling version needed to change as the company moves to the cloud. Jahangir relayed something he said in a recent internal meeting, “In the cloud we are now no longer selling giant monolithic app. Instead we are selling tiny bites of the apple. The relationship between the vendor and the buyer is becoming more like a consumer version.” That in turn requires a brand-new path of selling and delivering solutions, precisely what they are trying to figure out at the innovation hubs.

Putting the concept to work

Once you have a brand-new path of reasoning
, you have to put it to work, and as the company has created these various hubs, that has been the reach. As an instance, one that isn’t necessarily genuine, but that puts Oracle features together in a pragmatic path, is the connected patient. The patient wears a fitbit-like monitor and uses a smart blood pressure cuff and a smart pill box.

The patient can then monitor his or her own health with these tools in a consolidated mobile application that pulls this data together for them using the Internet of Things cloud service, Oracle Mobile Cloud and Oracle Integration Cloud. What’s more, that information gets shared with the patient’s pharmacy and doctor, who can monitor the patient’s health and get warnings when there is a serious issue, such as dangerously high blood pressure.

Another project involved a partnership with Waypoint Robotics, where they demonstrated an automaton that worked alongside mankind workers. The humans interacted with the robots, but the automaton moved the goods from workstation to workstation, acting as a standard command agent along the path. If it found defects or problems, it communicated that to the worker via a screen on the side of the unit, and to the cloud. Every interaction between the humans, goods and automaton was updated in the Oracle cloud.

Waypoint Robotics automaton inspecting iPhones. Information on the display shows it communicating with the Oracle cloud. Photo: Ron Miller

One other project worked with farmers and distributors to aid stores stay stocked with avocados, surely as good a gen Z project as you are likely to find. The equipment looks at weather data, historical sales and information coming from sensors at the farm, and it combines all of that data to make predictions about avocado yields, making use of Oracle Autonomous Data Warehouse, Oracle Analytics Cloud and other services from the Oracle cloud stack.

Moving beyond the hubs

This type of innovation hub has become well-kown in recent years as a path to aid stave off disruption, and Oracle’s reach is actually in line with this trend. While companies sometimes isolate these innovation hubs to preserve them from negativity and naysayers in an organization, leaving them isolated often prevents the lessons learned from being applied to the broader organization at big, essentially defeating the very purpose of creating them in the first place.

Jahangir says that they are attempting to evade that problem by meeting with others in the company and sharing their learnings and the kinds of metrics that they use in the innovation center to measure properity, which might be distinct from the rest of the company.

He says to put Oracle on the customer agenda, they have to move the conversation from religious battles, as he calls how people help or condemn tech from certain companies. “We have to overcome religious battles and perceptions. I don’t like to battle religion with more religion. We need to stride out of that conversation. The best path we have seen for engaging developer community is to show them how to build really cool things, then we can hire developers to do that, and showcase that to the community to show that it’s not just lip service.”

The trickery will be doing that, and perhaps the innovation centers will aid. As of today, the company is not sharing its cloud revenue, so it’s solid to measure just how well this is helping contribute to the overall properity of the company. But Oracle clearly has a lot of work to do to change the perception of the enterprise buyer about its cloud products and services, and to increase its share of the growing cloud pie. It hopes these innovations hubs will govern the path to doing that.

Jahangir recognizes that he has to constantly keep adjusting the reach. “The hub version is still maturing. We are finding and solving brand-new problems where we need brand-new tooling and engagement models in the organization. We are still learning and evolving,” he said.

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