This week, Supply Chain Matters is attending the Oracle OpenWorld conference held in San Francisco. In our first dispatch, we highlighted the opening keynote delivered Sunday afternoon by Oracle Executive Chairman Larry Ellison. Our second dispatch highlighted the keynote and some observations of Monday, the first full day. Our third dispatch provided some highlights of Tuesday’s keynotes including Larry Ellison’s second keynote that focused on a rather timely new Oracle product announcement related to cyber security and management.

In this dispatch commentary, this author wanted to focus on some observations and insights related to the implications of this week’s stunning technology announcements. Our lens is the broad umbrella of supply chain management related business processes that include product management, procurement, supply chain planning and customer fulfillment, manufacturing, transportation and services management, the majority of which are often characterized as mission critical processes for many businesses.

Let’s begin by reflecting on the Oracle announcement of an autonomous database that literally manages itself utilizing machine learning. This is undoubtedly a rather significant announcement, one that will likely prompt some cynicism from Oracle competitors and perhaps the IT community that supports various supply chain management systems.  As Oracle executives have clearly and openly pointed out, such an achievement is extraordinarily difficult from a technical perspective. In yesterday’s keynote, Oracle’s President of Development, Thomas Kurian, purposely reflected on the timeline to this week’s formal announcement.  The analogy used was that of autonomous driving automobiles, where the vision, technology development  and operational deployment of self-driving vehicles has accelerated to the point where autonomous driving vehicles may well be present in the next five year cycle. In the case of autonomous automobiles or even trucks, the challenges in today’s technology are not insurmountable whereas the implications to the potential changes in traffic regulations, infrastructure of roads, cities, fueling stations and notions of liability insurance are different challenges much more dependent on other factors. None the less, change is indeed underway and question is timing.  Some countries, states or regions will adopt earlier than others.

For mission critical systems, some similar analogies can be made.

A totally autonomous database relates to the availability of an autonomous OLTP system, the nerve center for most of today’s operational order management, manufacturing, customer fulfillment and service fulfillment systems. In laymen terms, an OLTP system foundation is in complex databases, transactional messaging, analytics, networks and the highest levels of data and systems security. Oracle’s current timetable for availability of the autonomous OLTP system is June 2018.

Yesterday I had the opportunity to sit in on a press and industry analyst briefing with Juan Loaiza, Oracle’s Senior Vice President of Systems Technology who graciously responded to a number of follow-up questions related to this week’s announcements.  He once again emphasized that Oracle has been working on automation for several decades in the areas of data storage, data security system patching and upgrades. The subtle message is that Oracle’s routes stem from originally being a database company that has long since branched out to many broader areas of enterprise technology. That is different from some other enterprise technology providers that have roots in the business applications arena, relying on perceived best-of-breed database or network technology from other providers.

He reiterated the design principles behind autonomous Cloud systems, those in which a human initially provisions the parameters of system, including whether such a system is mission critical, and when the final acknowledgement button is executed, the Cloud automatically establishes your system instances, database provisioning and security standards.  Sounds great, but as we all know, there is much more to this challenge, beyond the advanced technology.  That human, who can easily setup an operational OLTP system, is in-effect, initiating a systems subscription contract with the technology provider. One button, in-essence, commits to a critical business relationship among two companies.

I asked Loaiza specifically about the 99.995 percent systems uptime availability (equating to a mere 30 minutes of annual downtime) that Oracle has committed to guarantee to customers. Why the confidence level and how will Oracle manage customer contracts and customer expectations for mission critical applications?

His response was eloquent in the notion that what Oracle is really doing is establishing a virtual, fault tolerant systems architecture that provides the ability to call upon virtual “hot” backup server instances.  Larry Ellison provided a similar type of explanation regarding parallel processing core servers. The Oracle guarantee has in essence, a foundation in fault tolerant as well as machine learning computing.

Various Oracle executives have stressed that autonomous must also be cheaper than the alternative. In the eyes of select industry IT and line of business financial teams, cheaper and Oracle have not necessarily equated in the same sentence. Thus, from a customer lens, we trust that Oracle is acknowledging it has to complement this week’s announcement with customer proof points as to automation equals less cost, far better security coupled with establishing higher-level strategic partnerships with companies and in some cases, industries.  To be candid and fair, we have noticed discernable changes in Oracle’s relationships with customers, in that is coming from customer testimonials as well. From the technology lens, Oracle feels that it has figured out the solution, but in the automobile analogy, all of the other implications as to roadmaps, application areas to start with, new contract structures that are both line-of-business and CIO driven, all come to the forefront.

This is not to state that industry supply chain teams should context this week’s announcements as purely, let’s wait and see.  Similar to when Oracle announced its first public Cloud-based, Oracle ERP and SCM Suites, the competitive technology landscape changed, and suddenly there was a different option of mission critical computing and for digital transformation on the table for industry disruptors.

Oracle has again raised the technology bar, but from this author’s lens, has begun to more proactively understand that when a technology company proposes to be a trusted partner in mission critical systems and applications, the challenge is not just in convincing us that technology has found the answer, but that a technology company is willing to take on the responsibility of being your trusted partner, in the good times as well as the not so good times.

Yes, we as humans can make errors, especially in environments of high work stress, Yes, the convergence of today’s advanced technology has opened the door for connecting the physical with digital, systems battling and potentially overcoming cyber attackers. But there remains more work related to trust. Trust in the business relationship, trust that line of business and functional teams can clean-up legacy data and overly complex business processes. Trust that teams understand what digital transformation really implies. Dare we state, trust that people will not experience added job losses as a result of autonomous systems.  They are all the factors beyond the technology, factors that tech companies and businesses themselves will have to overcome.

Do not misperceive this commentary. Oracle has once again seized the opportunity to raise the bar in Cloud computing, and now, in the future security of information and transactional systems.  The timing is impeccable and indeed brilliant. There will be skepticism, doubters and resisters, with belief in legitimate concerns. But just like autonomous cars, the wave is coming and the option is to ride the wave or possibly be swamped by that wave, swamped by the many industry disrupters that dominate today’s and tomorrow’s business headlines. This week alone, major global auto companies are collectively communicating their product development visions that factor both alternative powered and autonomous vehicles. The same wave has begun for autonomous trucks, but the complexities and challenges are somewhat different.

We as industry analysts, have to take the time to ascertain all of the implications and advise clients and readers, without being caught-up in the hype cycle. Line of business and supply chain functional teams have similar responsibilities in remaining educated on faster advanced technology cycles that have more far-reaching implications.

In the next and final commentary related to this year’s OpenWorld, we will share our summary observations, insights and takeaways regarding the 2017 OpenWorld event, along with the implications for the broad supply chain management community.

Bob Ferrari

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