Oracle is doing great! Is "AI" and "data" the secret behind its soaring stock price?
Hello everyone! I'm John, an IT journalist. Haven't you noticed that you've been hearing a lot about the company Oracle lately? In fact, Oracle surprised the market with their recent financial results, and their stock price has risen sharply. It seems that they recorded the highest weekly increase in stock prices since 2001. What on earth happened? The secret seems to be in "AI (artificial intelligence)" and "data," which Oracle has always excelled at.
Today, I would like to explain Oracle's AI strategy in an easy-to-understand manner even for beginners who are wondering, "What is AI?"
Was Oracle a bit late to the game?
Oracle is a huge company that is well-known in the field of databases (large electronic boxes that store and organize a lot of information). Many companies around the world have managed their important information using Oracle databases.
However, until a few years ago, they were sometimes criticized for being a little slow to respond to the "cloud" (a system for using IT services such as servers and software via the Internet). Meanwhile, rival companies such as Microsoft and Amazon were growing rapidly in the cloud field.
However, Oracle came up with an interesting strategy here!
Oracle's "reverse thinking": Use AI wisely with your company's data!
There are "LLMs (large-scale language models)" like the recently popular chat GPT, right? They learn from a huge amount of information on the Internet and are really smart, but they actually have a big weakness. That is,I don't know anything about the "internal data" of individual companies.
For example, even if a company wants AI to analyze something using its own customer data or product information, a typical LLM would say, "I don't know anything about your company..." Many companies have been racking their brains over how to use this "internal data" with AI. A technology called "RAG (Search Augmentation Generation)" has emerged that allows AI to answer questions by referring to external information, but there are still challenges.
So Oracle thought, "Our database contains a lot of important data about our customers! So why not make it possible to safely analyze that data using AI without having to take it elsewhere?"
This is a completely different way of thinking. The new Oracle Database 23ai product is based on this concept, with AI capabilities built into the database itself. This allows companies to use the data they own to:They can safely analyze the data using AI under their own management without sending it to an external service.This is an extremely attractive proposition for companies.
What Oracle, the "King of Data," can do for you
Larry Ellison, founder and CTO of Oracle, is said to have said the following during an earnings call: "Other companies say, 'We're good at AI because we have all the data.' But that's wrong.We hold most of the world's valuable data in our Oracle databases!'
This may seem like a bold statement, but there is solid evidence to support it. For many years, many large companies have been managing the data of their core systems (the systems that are most important to the company) with Oracle databases.
Oracle is trying to take full advantage of its position as the "king of data" by enabling companies to safely and securely derive AI-driven insights (finding new discoveries and areas for improvement from data) using the data they already have in their systems. Oracle's message is that "you don't need to move your data to new, unknown places to use AI."
Furthermore, Oracle has recently been promoting a "multi-cloud" strategy, which means that Oracle databases can be used not only on its own cloud service (OCI: Oracle Cloud Infrastructure), but also on the clouds of other companies such as Amazon (AWS), Google (Google Cloud), and Microsoft (Azure). This allows companies to use Oracle technology more flexibly according to their own circumstances.
But still missing a piece of the puzzle? Win the hearts of developers!
Well, so far, it seems like Oracle is unstoppable! However, experts point out that there are still big challenges remaining.Getting support from "developers".
Developers are the people who actually create new applications and software. It is said that Oracle's current growth is mainly due to transactions with existing large customers. Of course, that's great, but in the future, it will often be developers who create new services and innovative ideas.
What if developers don't choose Oracle's technology when they want to build something new? Oracle may miss out on a big growth opportunity in the future. In the cloud era, developers are the ones who decide "what technology will be the next big thing."King of the New EraIt's like that.
Getting developers to pay attention: A quick suggestion for Oracle
So how can Oracle win more over developers? Here are a few suggestions:
- To make it easier to try:Ideally, when a developer thinks, "I'd like to try using Oracle's cloud service," they should be able to start using a credit card right away and the pricing structure should be easy to understand. It might also be a good idea to expand the free tier and provide more support for startups, individual developers, and open source (software with publicly available blueprints) projects.
- Strengthening collaboration with the developer community:It's also effective to participate in developer events, create online forums for information exchange, and share examples of startups that have been successful using Oracle technology.
- Providing useful tools for developers:The recently announced "Oracle Code Assist" is an AI-based tool that supports developers who use the Java programming language. It is important to continue developing such tools and improve them by listening to developers' feedback.
- Making Oracle's "amazing technology" even easier to use:For example, the latest database, Oracle Database 23ai, is packed with interesting features for AI (such as JSON relational duality and vector search, which are somewhat technical but expand the scope of data utilization). However, no matter how great it is, it is meaningless if developers cannot easily try it out. It is necessary to be able to quickly prepare a development database, load data, and call it from a program.
A word from John
It's really exciting to see Oracle taking on new challenges in the age of AI by leveraging the "strengths in data management" that it has cultivated over the years! It's like a veteran actor being put in the spotlight again in a new role.
However, no matter how good a product or service is, it needs people who use it to create new value, that is, developers. I feel that Oracle's story contains important lessons that are relevant to many other IT companies.
This article is based on the following original articles and is summarized from the author's perspective:
The key to Oracle's AI future