House of Brick in 2016 – A Retrospective on a Pivotal Year
Nathan Biggs (@nathanbiggs), CEO
With the end of the year approaching, I thought that I would take some time to reflect on some key industry events and trends that we have experienced this year at House of Brick. Next week, I will provide an opinion on what we are anticipating for 2017. The thoughts and opinions that I share have been formed as House of Brick has continued to grow our influence in the industry. We have now provided consulting services to over 25% of the companies on the Fortune 500 list. We have also assisted state and local governments and higher education organizations in well over half of the states in the U.S. In addition, our global reach expanded considerably in the past year, with significant consulting engagements in Canada, Latin America, Europe, and the Middle East.
Merger of Dell and EMC
Through 2015 EMC, along with Federation partners VMware and VCE, provided the majority of House of Brick’s partner-led customer engagements. The combination of House of Brick’s expertise in architecture and business considerations (such as licensing) for virtualizing business-critical systems made us a key partner for these Federation businesses in removing sales barriers for storage, converged and hyper-converged infrastructure, and VMware software.
Dell’s announcement in late 2015 that they were acquiring EMC and its Federation businesses was at once exciting and intimidating. I was excited that a larger Dell EMC would have the scale and fortitude to deal with some of the hegemony coming from Oracle Corporation. The intimidation came with wondering if this would be a distraction from our key partner base that would prevent us from making critical industry gains.
While I remain excited about the prospects of a strong Dell EMC moving into next year, the merger activities, including organizational restructuring and lack of consistent messaging became a significant disruption to House of Brick’s partner-led activity. Dell EMC still remains a vital partner for House of Brick, but I believe that the disruption that we experienced throughout 2016 caused both Dell EMC and House of Brick to be less effective at dealing with certain customer industry needs this year than we could have been. I hope and anticipate that the newly combined Dell EMC will be stronger, and more well positioned to take on the challenges of 2017.
Oracle’s Cloud Push and Continued Aggression Toward its Customers
In 2016, Oracle waged an aggressive push toward a cloud model fashioned in its own interests. I believe that the Oracle cloud model of Software as a Service (SaaS) is inadequate for the business critical systems being used by our customers compared to the more flexible cloud models used by Google, Microsoft, and AWS using Infrastructure as a Service (IaaS). Oracle has promised to move to an IaaS model in its cloud, but we will have to wait and see what that brings by way of customer benefit and cost.
A more disappointing trend from Oracle in 2016 was their continued insistence on aggressively pursuing revenue from their customers based on non-contractual claims of being out of license compliance. We saw a dramatic upswing this year at House of Brick in customer requests for Oracle license consulting, audit defense, and architectural optimization for license compliance. On any given day, we have a dozen or more customers that we are helping to defend with respect to their Oracle audits. For all of the audits that we have defended over the years, we have never had a customer who followed our guidance have pay for licenses or fees for non-contractual assertions related to their use of VMware.
Emergence of Alternative Database Platforms
The dissatisfaction that our customers feel toward Oracle’s treatment of them (as opposed to Oracle’s technology which we all love) has led many to consider database alternatives. MS SQL Server, DB2, PostgreSQL, MySQL, Aurora, Hana for SAP, and others are all getting serious consideration by our customer base. Microsoft’s release of SQL Server for Linux may be the most significant in providing an alternative path for Oracle users. While I do not believe that wholesale migrations off of Oracle databases are technically, expeditiously, or fiscally viable in most cases, we do see customers adopting a strategy of committing to put all new development on alternate databases. This will tend to erode Oracle’s position slowly over time.
Virtualization as a Standard Practice
House of Brick’s customers are no longer wondering whether they should virtualize their Oracle workloads. They are doing so as a standard practice, even without our help. As I mentioned in a previous blog post, we take pleasure in this trend, because we feel like we have been a significant industry catalyst in making it happen. As virtualization of Oracle becomes a majority-phase activity (SQL Server has been there for many years), we see that customers are also doing things in ways that may introduce considerable risk.
The biggest risk in virtualizing Oracle is architecting the infrastructure in a way that does not take licensing into consideration. Sadly, we have seen too many customers this year who have excitedly virtualized their Oracle software without thinking about how to contain those workloads on licensed servers. While we lament Oracle’s aggressive tactics, they do have the right to audit your use of their software. If they find that you have not contained things in a license compliant way, you stand to be charged millions of dollars in fees, or to be forced into agreements (such as unlimited license agreements, or purchase of cloud credits) that may not be in your best interest.
We encourage our customers not to let licensing become a roadblock to virtualization, and also not to let a faulty deployment become their biggest regret.
Looking Forward to 2017
I will post next week on my outlook for 2017, but to give you a hint, it has a lot to do with cloud computing. There are some exciting things coming, including VMware Cloud on AWS, which may revolutionize how our customers work. I am looking forward to an exciting year.