oracle openworld 2015: vision 2025: digital transformation in the cloud - mark hurd, ceo, oracle

Safe Harbor Statement

The following presentation is intended to outline our general product direction. It is intended for informational purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle. The expected release for Oracle Database 12.2 is planned for Calendar Year 2016.

Copyright © 2015, Oracle and/or its affiliates. All rights reserved. | 4

What CEOs Care About

NEW MARKETSBusiness Agility and Entering

GROWTHFinancial

“SURVIVAL”

Copyright © 2015, Oracle and/or its affiliates. All rights reserved. |

Revenue Growth Is Stalled Across The Economy

5

Earnings Continue To Grow Through Cost Cutting

0

50

100

150

200

250

300

350

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

S&P 500 Sales per Share

<1% CAGR

S&P 500 Earnings per Share ~5% CAGR

S&P 500 Sales per Share and Earnings per Share: March 2008 to March 2015

$ /

Sh

are

Source: Dow Jones Inc.

2008 2009 2010 2011 2012 2013 2014 2015


Estimated 5.1% Spending Decline In 2015 Alone

Worldwide IT Spending Decelerated Over Last Five Years

5.0%

1.3% 1.5%

1.0%

-5.1%-6%

-4%

-2%

0%

2%

4%

6%

3.3

3.5

3.8

2011 2012 2013 2014 2015

$U

S Tr

illio

n

5-Year Total IT Spend Trends

Rev (UST) Y/Y Growth

Total IT = SW, HW, Telecom, Services, Devices,

Source: Independent Analyst Estimates


Traditional Tech Suppliers Feeling The Squeeze

14 consecutive qtrs.of revenue decline,

-$10B in 2 years

-13% profit decline in latest qtr. Revenue decline in 15 of

16 qtrs. -$9B in 2 years

Flat revenues, -72% dropYoY in qtr. earnings, 2Q13

before going private

Revenue declining.Traditional Disk business

off -27% in2Q.

-19% profit decline in latest quarter amid

tepid sales.

Revenue up +7% cc in latest quarter.

These companies’ had a combined revenue decline of $16.4 Billion over the last two years.

$265M loss in latest quarter. Revenue fell -8%.


The Current On-Prem IT Operating Model Is Unsustainable

• Technical debt continues to pile up.─ Age of IT equipment in many industries is up 15% to 30%.─ 80% of budgets are spent on maintenance.─ System failures increasing.

• Security and compliance adding to costs and stress.─ 95% of networks have been breached.─ More than 2/3rds go undetected.─ Cybersecurity spending increasing 10% per year.

Based on 20-Year-OldLegacy Applications

• Pre-Internet• Pre-Search• Pre-Social• Pre-Mobile• Pre-Cloud


A Demographic Shift Is Also Forcing A Technology Shift

• Expect easy-to-use mobile applications that just work.

• Workers shifting to ‘gig economy’ need simple mobile business apps to ramp quickly.

Oracle Confidential – Internal/Restricted/Highly Restricted 9

Of the workforce will be Millennials in 202050%

Shifting to Gig Economy, e.g. Uberhas 160,000 workers and only

4,000 full-time employees.

Say access to real-time product availability information would influence their shopping choices.

CONSUMERS WORKERS

Of Millennials demand an integrated, seamless experience regardless of the channel.

68%

90%


There Is A Better Way: Cloud Computing

• Lowest cost

• Least complex

• Most reliable

• Best security

• Rapid innovation

• Simple

Public Cloud


We will lead decade long transition to the cloud.

Best of Breed SaaS Suite built on Standards.

Platform designed for extensibility.

We are in a class alone.

Only IT company capable of coexisting on prem or in cloud.


VISION 2025

Oracle Confidential – Internal/Restricted/Highly Restricted 12


Prediction 1: By 2025 80% of Production Apps Will Be in the Cloud

• Public Cloud SaaS is 24% of the Applications market today.

• 85% of all new applications today are

architected for SaaS.

$-

$100

$200

$300

$400

$500

$600

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

SaaS

PaaS & IaaS

Total Public & Private Cloud Markets (US$ billions)


Full Suite Requires 100’s of Applications:

• Customer Experience Suite

• Human Capital Management Suite

• Enterprise Resource Planning Suite

• Enterprise Performance Management Suite

• Supply Chain Management Suite

• Data Suite

Shared, extensible schemas across suites significantly reduce the cost and complexity of integration.

14

Enterprise SaaS Suites

80%

SaaS Point Solutions

20%

SaaS Market In 2025

Prediction 2:By 2025 Two Suite Providers Will Have 80% of the Saas Apps Market


• One of the least managed and governed areas in IT

• Dev/Test suites offering rich standards-based frameworks and languages will dominate

• Dev/Test suites include:– Integrated development environment

– Support popular languages

– Mobile dev tools

– SOA dev tools

– Database dev tools

– Integration dev tools

– And much more ….

• 30% to 40% of IT spending is Dev/Test, making it an attractive Cloud workload for cost savings.

15

20%

70%

100%

Today

In 2020

In 2025

Prediction 3:100% Of New Dev/Test Will Be Cloud In 2025


• More data is already stored in clouds than in traditional storage systems.

• 10’s of billions of IOT devices will generate massive amounts of new enterprise data using modern cloud-based applications.

• Public cloud storage capacity will be sourced by service providers directly from component manufacturers, not existing storage vendors.

16

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000Public Cloud

Private Cloud

Traditional IT

PBytes of Storage Installed

Prediction 4:By 2025 Virtually All Enterprise Data Will Be Stored In Clouds


Prediction 5:By 2025 Enterprise Clouds Will Be The Most Secure IT Environments. Oracle Is There Today.

OF ORGANIZATIONS TAKE 3 MONTHS+ TO PATCH

Source: Verizon Data Breach Investigations Report, 2015; IOUG Data Security Survey, 2014

74%

OF 2014 EXPLOITS HAD PATCH AVAILABLE FOR MORE THAN ONE YEAR

99.9%

• Oracle uses its full security IP to run its Cloud• Full encryption by default• Implement latest patches rapidly across entire infrastructure• More secure than anyone


Jim FowlerChief Information Officer, GE

Oracle Confidential – Internal/Restricted/Highly Restricted


Mike BradyGlobal Chief Technology Officer, AIG


We will lead decade long transition to the cloud.

Best of Breed SaaS Suite built on Standards.

Platform designed for extensibility.

We are in a class alone.

Only IT company capable of coexisting on prem or in cloud.