Confessions of an Oracle Shopaholic: Pt I

In early 2005, Oracle Corp. was an enterprise IT systems giant with no telecom-specific products of which to speak, though its widely used database technology meant it had a supplier relationship with just about every communications service provider (CSP) in business.

Then Oracle just went telco crazy. It signaled its intent to target the CSP market with the purchase in 2005 of high-performance database specialist TimesTen, which was the foundation of some of the earliest real-time billing systems, and followed that by swallowing Siebel, one of the major suppliers of CRM (customer relationship management) systems to CSPs.

Oracle then got more specific. Starting small (with service delivery platform specialist Hotsip AB) but moving fast, Oracle embarked on an almighty M&A spree and effectively built itself a position as one of the leading suppliers of Service Provider IT (SPIT) systems in the world. By the end of 2006 it had acquired billing systems specialist Portal Software for US$220 million, snapped up a few more telecom software minnows and splashed another $219 million on OSS vendor MetaSolv. (See Oracle Buying Into Service Delivery, Oracle Acquires Portal and Oracle Buys More OSS With MetaSolv.)

It went on to acquire application server specialist BEA Systems for $8.5 billion in early 2008 and then cited significant telecom market opportunities as one of the drivers for its $7.4 billion acquisition of Sun Microsystems in 2009. (See Oracle's Higher Price Lands BEA and Oracle/Sun Expresses Telco Ambitions.)

That wasn't enough, though. It continued to pick up specialist firms such as service broker specialist Convergin before reminding the market of its financial firepower in early 2013 with the acquisitions of Acme Packet for $1.7 billion and Tekelec for an undisclosed sum. (See Oracle Snaps Up Tekelec and Oracle to Acquire Acme for $1.7B.)

Just as remarkable as that M&A splurge is the fact that the same person, Bhaskar Gorti, has been running the Oracle Communications division for much of that time: He joined the software giant as part of the 2006 acquisition of Portal Software, where he was CEO. With so many significant acquisitions since he took the helm of the division, you have to wonder if Gorti has an M&A addiction.

Figure 1: Oracle's Front Man Regional marketing senior director Gordon Rawling lets Bhaskar Gorti, senior vice president and general manager of Oracle's Communications Global Business Unit, take front stage.

But if he does have a bit of a shopping habit, the powers that be (aka Larry Ellison) seem to be happy enough to indulge him. And he must have been hitting his numbers for the seven or so years, or surely Ellison would have eaten him for lunch in between one of his boating expeditions.

That's quite an empire Gorti now runs, so Light Reading grabbed the opportunity to meet with him and Gordon Rawling, senior director of regional marketing at Oracle Communications, at London's Paddington Hilton hotel recently over a tepid cup of tea. (Gorti bought that as well!)

In this first part of the interview, he talked about: the current make-up of Oracle Communications, an extensive organization and probably the biggest Service Provider IT (SPIT) company in the world; the trends in the broader industry that are affecting his customers and his strategy, including the shift towards software-oriented network architectures; and Big Data/analytics.

In Part II, you can read about: Gorti's views on software-defined networking (SDN) and network functions virtualization (NFV) and the impact those trends are having on the industry and his business; the competitive landscape; sales strategies; and where Oracle Communications can go next.

What was clear from the meeting is that, following this year's acquisitions of Acme Packet and Tekelec, Gorti is focused on how to pitch his business as a rival to the large network equipment manufacturers (NEMs), now that he has network elements as well as supporting software and IT assets to pitch to the CSPs: He took pretty much every opportunity he could to position Oracle as the open, helpful, friendly face of the supplier community while at the same time characterizing the NEMs as the snake-oil salesmen of the telecom world.

He is also supremely confident -- some might say over confident -- that the current trend towards network virtualization provides opportunities, rather than threats, to the telecom software part of his business. (See NFV in the Cloud: It's Complicated.)

But as the communications sector becomes more heavily influenced by its IT and software components and given the influence that Oracle can assert on the market, due to its sheer size and financial/portfolio firepower, it would be strange if Gorti was anything but confident.

— Ray Le Maistre, Editor-in-Chief, Light Reading

On page 2: Gorti talks about the scale of the business and the areas covered.

Light Reading: Everyone knows Oracle Communications is a giant operation, but just how big is it, how broad is the portfolio and how many people does it employ following the recent acquisitions?

Bhaskar Gorti: We still don't break out any details, not even the number of staff. But it's a very material business for Oracle. And there's always a lot of focus on the M&A side of things but we do a lot of R&D across the portfolio.

If we were an independent company, and not part of the broader Oracle, we would be one of the largest companies in this [telecom] space.

But let me give you an idea of the scale. We added $700 million in annual revenues and about 2,000 staff by acquiring Acme Packet and Tekelec, but we are much larger than that. And we don't just grow through M&A -- about half of our staff are in R&D. For example, the Elastic Charging Engine announced last October was developed 100 percent in-house, based around a lot of the work done by the database and middleware parts of the broader company.

We augment that with the consulting practice services from the team run by Brendan Logan. His team is exclusively focused on Oracle products, making sure that everything is deployed to maximum effect by systems integrators and customers.

Light Reading: And the portfolio?

Gorti: So we have OSS -- activation, provisioning, inventory, we have BSS -- billing, CRM -- applications servers, from the BEA acquisition, and the [Sun Micrososystems] Network Equipment Building System (NEBS)-compliant servers that are sold though the NEMs [network equipment manufacturers].

Then there's the unified communications suite, which is white labeled, so you never see our name. We can't talk about many of the customers there but Verizon Communications is a customer, providing email, messaging, contacts, and there are other large ones too, including large enterprise service providers such as AKO (Army Knowledge Online), so it's gone through a lot of security clearances. About 230 million to 240 million end users are serviced by this platform.

If you look at it, more and more of the core IMS and core network is becoming software rather than specialized hardware. There are many terms, whether it's SDN or network virtualization. We come from the software DNA, providing carrier-grade software, and we have decided that in order to accelerate the industry's adoption of purpose-built software on commercial off-the-shelf hardware and virtualization, we decided to expand into a couple of areas. One was to move our unified communications to voice and video, collaboration, WebRTC and RCS … as network operators move rapidly to IP networks we decided that in order to provide a broader solution we needed session delivery network capabilities and that's what led us to the market leader in Acme Packet, which sells not only to service providers but also to large enterprises -- we see a natural integration of unified communications and WebRTC there. You'll see us bring out more solutions in that area.

The other area is 4G. This is going to happen worldwide and we wanted to make sure we had a BSS and OSS solutions set expanding into the 4G area and that's what led us to add Tekelec into the portfolio. We not only get the traditional SS7 signaling for 2G, 3G, local number portability and EIR [equipment identity register] capabilities, but as these networks start to experience signaling storms, Diameter becomes an important emerging standard.

Also, we already have a very large portfolio of charging [products], so policy becomes a very natural complement to that. If you look at it today, then many of the policy vendors and solutions are primarily focused on one side of the coin, focusing on optimization, the first generation of policy implementations. The second generation is going to be monetization -- how do you use policy to monetize specific services. To do that, policy needs to connect to a charging environment … [the Tekelec policy server] will be integrated with the Elastic Charging Engine.

And we are in the early days of Subscriber Data Management. Now, we have a strong position as the database of the enterprise and we believe we can be the database of the network, starting with subscriber profile repositories and then moving to a broad portfolio of SDM solutions. Tekelec has an SDM portfolio. There are some SDM solutions from the traditional network equipment companies which are attached to their systems but we have the beginnings of an independent, federated SDM portfolio with Tekelec and we're going to accelerate that to Tier 1 capabilities.

We truly believe that to really provide a complete end-to-end customer experience solution you need: front office data, the retail, Web and CRM data; the mid-office and back office data, billing, charging, rating, service fulfillment and order management data; and the third leg of the stool is the network usage data. With Acme and Tekelec we now have that. And we have a communications data model which is TMF SID [TM Forum shared information data, now known as the Information Framework] compliant that allows the customer to have a complete 360-degree view to provide customer experience solutions, because you now have network data, front office/retail/Web/CRM data, the product usage and billing data. We'll be expanding on the comms Big Data model -- you'll see more coming out of that.

The word "IT" for various reasons is not very well appreciated on the network side … we really believe there is IT-ification [sic] going on in the network -- there is more and more intelligence in the software running on virtual environments. That's a trend we support and are trying to accelerate its adoption in the service provider market.

On page 3: Oracle and the Big Data challenge.

Light Reading: You snuck in the term Big Data there. One of the big drivers of the service providers is to make sense of the information they have locked away. Is there a specific proposition from Oracle for telcos to help them capture the information they need for multiple purposes?

Gorti: We already have one. About three years ago we launched a solution called the Oracle Communications Data Model (OCDM), built to SID standards. Over the years we have made sure it enables real-time integration of data from anywhere and starts looking at profitability per customer, per service, per product. Service providers have tons of products but only a small percentage of those are in use and a much smaller percentage are profitable. Having thousands of products creates complexity for them and it costs a lot to maintain them and they need to transform to a new generation of services. So we have been working with service providers to figure out, what are your services, which ones are in use and which ones are profitable, to provide for them, and even their customers, data dashboards so they can expose usage and so on. One of the rationales of bringing in Acme and Tekelec was to provide network data to that model. They [Acme and Tekelec] have analytics tools for their own products so we will bring those into this.

Light Reading: But service providers want information from any element…

Gorti: Yes, of course, and the way our framework is set up is that it can get data not only from Oracle systems but from non-Oracle systems too and that's the same for the probes and tools from Acme and Tekelec. Wherever they are deployed there are other elements. OCDM can be sold by itself, as a standalone system, it is fully standardized. [For] all our OCDM implementations, we may be only about 20 percent of the apps feeding into it.

Light Reading: Are there any telcos using this? When I talk to operators, apart from the odd one or two, they are always trying to figure out what to do with regard to the Big Data challenge and many of them seem to be talking about the potential of Hadoop.

Gorti: I agree, it's at the beginning of the journey towards getting that 360-degree view. And there are many technical elements that feed into it, but it's about the business problem that they're trying to solve, whether it's an order management problem or a customer retention issue. Hadoop, Big Data -- these are technology terms and when we talk to the marketing groups and call center managers they are not using the technology terms, they are trying to figure out how to solve business challenges.

I was just with a large cable operator on the East Coast [of the US] and the team there is trying to figure out, as they get competition from non-cable companies, what is their installed base, how many modems they have with customers and the services they are using so they can make the right upgrade offers to their customers. If they don't do that, then a Verizon or someone else is going to come in with a new offering. They need to be able to do proactive marketing, figure out who their high-value customers are and how to retain them. But right now they are just being reactive to a call about a problem or an alternative package offer.