On this episode of The Six Five – On The Road hosts Patrick Moorhead and Daniel Newman are joined by Mike Sicilia, the Executive Vice President of Oracle Industries as they discuss their recent visit to the grand opening of the Oracle Industry Lab.
Their conversation covered:
- The focus of the lab: communications industry, construction engineering, energy and water, manufacturing, public health and safety
- A short dive into vertical applications and the vertical edge
- Oracle’s core vertical differentiators
To learn more about the Oracle Industry Lab, check out their website.
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Patrick Moorhead: Hi, this is Pat Moorhead and I am here with my co-host Daniel Newman. We are here at the Oracle Industry Lab, right outside of a suburb in Chicago. Daniel, we are here, we are live. And in the background, we actually have parts of the innovation lab itself.
Daniel Newman: Yeah. We’re seeing it in real time. It’s great to be back to home. For me, it was home, but I don’t normally admit that anymore, as Austonian myself. You live in the Austonian, don’t you? I shouldn’t tell that publicly.
Patrick Moorhead: I do. That’s okay. It’s all good.
Daniel Newman: But yeah, we have Six Five On the Road right here at this industry lab that Oracle just opened up. By the way, super cool for us. Because so typically we end up having these engagements where we’re hearing about the tech and how the technology works and the speeds and the feeds. Here, we’re really seeing how it works in the industries. A much more practical example of tech at work.
Patrick Moorhead: Yeah. And I think it’s even exciting too, we’re here for a grand opening. Three labs were announced, but this is the big grand opening here in Chicago. And they’re focused on communications industry, construction engineering, energy and water, manufacturing, public health and safety. You can imagine the types of solutions that they have here. If you’re thinking verticals, let’s say you’ve been in business for 50 years doing it a certain way, but then you have maybe a competitor or a big industry shift. How are you going to move to that next type of technology to give you the business results that you need? The ones that we’re looking at today, we saw robot dogs. We saw helmets that would track workers. We saw a robot that actually put up drywall. Unfortunately 40 years ago when I did that for a living in summer, I was the drywall robot. So some really cool stuff, but it is more than just looking at cool technology. Isn’t it?
Daniel Newman: Pat, one of the things that’s been pervasive over the last couple of years, I don’t know if it was COVID induced, that all marketers started thinking the same in all comms departments started having the same messaging, but was this everything goes to an industry or a vertical skin. So it’s cloud for A, cloud for B, cloud for C. So what’s really interesting about what’s going on at Oracle is Oracle’s got decades of experience working with these industries. It’s at the core. Almost every company on the planet feels like is running some Oracle application or database.
So the depth of experience that that data has provided gives a wealth of knowledge that can be brought to construction companies, that can be brought to state and local governments, that can be applied in heavy industrial manufacturing or even automotive, which we saw an autonomous Indy car here. Which was kind of like a side show amongst a bunch of much more what I would say, pragmatic technologies being applied. But look, we saw applications for high performance computing clusters. We saw GPUs put in drones that are now flying around warehouses and helping people understand their inventory and how that actually connects to the supply chain, process, finished goods, revenue, projections. This is really what it’s all about. And sometimes I think, like I said, we get lost in the tech.
Patrick Moorhead: Yeah, we do. Listen, I never saw a robot dog that I didn’t love or a drone. And that’s definitely the case here, but what we’re talking about is real business challenges. I think the reason that so many people in the industry have pivoted to industry is I feel like in a way they’re making a statement that this general purpose, horizontal computing, I don’t know, is at its end. By the way, I don’t think it is. I just think it’s another way to compete. And I saw what I would consider the cloud native folks saying, Wait a second, why are 75% of the application still on prem and not in my cloud? It must be because we don’t have this.”
But good points about Oracle differentiation because what I like to talk about is Oracle may not have been talking about industry for 20 years, but they’ve been doing industry solutions for over 20 years. If nothing else, I think this lab is a great place to demonstrate and co-innovate with customers to get them to that next level or that next stage in their company. A good example could be construction, where they may not be competing with other construction companies. They’re competing with a lack of workers. There just aren’t enough workers, or there are certain types of environments that are dangerous for workers.
What is the solution? What is the solution for this? There’s a lot of talk in the United States about bringing manufacturing back. Well, guess what? We don’t have a million people to work on iPhones, and literally they get built by hand. So what are the types of technologies in manufacturing? And we saw an example out here of essentially an automated manufacturing facility using a bunch of different sensors from laser beams to optical sensors, to be able to do this.
On the dangerous building part, we saw one of the spot robots with one of Oracle’s partners, being able to completely map the inside of a building. It wasn’t theory. They actually did it here. They automatically did comparisons to what the building was supposed to look like. That’s automatically on the fly. Maybe there might not be enough workers to get out there, but at least they’ve compressed the time to be able to go do inspections. So real results for what I think are considered brownfield types of industries.
We saw a company that literally, this is not thesis or theory, using drones to go and inspect electrical towers. Now in one of the places that I visit out in Horseshoe Bay, they literally have people on helicopters doing this. The helicopter flies literally right next to this power station, about 100 feet in the air, and a guy is sitting outside, looking at it and inspecting it. Here, they actually use a drone, take videos of it, do machine learning against it, to pattern match to see how safe it is, what condition it’s in. And if it’s not in a good condition, will automatically send an alert to the power company to let them know that there’s something wrong. So employee safety.
Daniel Newman: Yeah. It’s a great example of human in the loop and human out of the loop and how we can apply technology, AI, machine learning, computer vision with a servicing department to make sure we keep our infrastructure running. But in the end, Pat, it really comes down to enterprises have challenges. They have problems they’re trying to solve. In this particular location, a lot of them are more of your heavy duty industrials, telecommunications, but this goes across every industry. Problem you’re trying to solve.
What I like about the concept behind the industry lab is that it really looks at every problem uniquely and says, “Yes, there is a certain canned set of capabilities that maybe do fit every industry.” But then every company’s challenges are unique. And the lab really is about a set up and tear down type of philosophy. Tear it down to the bones, set up the demo/innovation lab for this particular application. Then rinse and repeat for different companies and different industries. I think that’s going to be a key to identifying how all this technology, database, cloud applications, infrastructure, AI are going to actually be able to be applied to real world solutions, which by the way, we didn’t have the chance while here. But wouldn’t you love to talk to maybe someone from Oracle about this?
Daniel Newman: I would. And matter of fact, let’s take it out to Mike Sicilia who actually runs Oracle’s industry operations. Mike, it’s great to see you and welcome to the Six Five. Daniel and I really enjoyed our visit with your new lab in Chicago.
Mike Sicilia: Well, thanks for having me. I appreciate the opportunity to talk a little bit more about that. And some of the other plays that we have in vertical industries in general.
Daniel Newman: Yeah. It was really a bummer to miss you there. But as we say, all the best plans. And it’s funny, as we all get back out on the road, we’re traveling, I think all of us are kind of relearning that muscle right now. And of course, we forget you could be at home with a little cold and you could keep on working. But nowadays, you got to be extra careful when you’re not feeling well not to go out in public.
Mike Sicilia: Well, in the spirit of the full disclosure, I did test positive for COVID that week after spending two and a half years building. That was the week that I tested positive. I was completely fine, very fortunate. But certainly didn’t want to put anybody else at risk. So in the old days, had I not known any better I would’ve taken a little DayQuil and just sort of marched on and been fine. But obviously, we have tests now to tell us not to do that.
Daniel Newman: Yeah, that’s a great point. In fact, that was sort of a sign of strength over many years and now it’s definitely one of those things it’s no longer appreciated working through illness. But like I said, it’s great that we were able to reconvene here. Beauty of a new hybrid and remote world and of technology is that we can meet even when we’re not physically together. We certainly learned that over the last couple years. So the lab was fascinating, Mike. And I really enjoyed getting around, seeing all the demos, hearing from the leadership across several of your verticals. But let’s start there. Let’s start a little wide. Why are verticals, and especially for technology companies, why is it becoming so important for them to break out verticals and sort of demark them and sell the technologies discreetly?
Mike Sicilia: Yeah. Well, I think the interesting thing about the vertical applications, certainly the ones that we developed, they are the applications that touch our customers’ customers. So in other words, it’s not just a B2B arrangement that we have with our customers. In many cases, it’s a B2B to C arrangement. And these things become incredibly strategically important, when we talk about transformational opportunities. You think about our customers, our customers have to transform by serving their customers better. So the fact that we have this stack of applications, this vertical stack of the applications at the edge, you can imagine that this becomes a really big strategic rallying card, if you will, inside organizations and really lends to a lot of business transformation discussions. That’s not to say that technical transformation discussions are not important as well. Database, infrastructure, platforms, back office applications.
But this class of applications I think are really the class that people see, touch, and want this tangible experience with more so than some of the others. So I think that’s really leading to what’s driving a lot of industry clouds, what’s driving a lot of the vertical adoption. And what we like to do is make sure we go all the way to the edge, when you saw some things with meter data management and things like that, all the way to the edge of the vertical so that we provide a complete solution for our customers.
Daniel Newman: Yeah. Mike, if we were new analysts, not one with 30 years of experience, Daniel and I might say, wow, this new thing called vertical clouds and vertical. Boy, all this new stuff. But we’re not spring chickens and we’ve seen a lot of verticals before. In fact, I don’t think Daniel and I can go to a vendor event without somebody talking about vertical, even though they may have been in business only five years. It’s kind of funny. So everybody’s doing them. But I’m curious, what are some of your differentiators. You did talk a little bit about going all the way to the edge, but what are Oracle’s core vertical differentiators?
Mike Sicilia: Well, I think the main, I think there are two. So let me start with the main one. The main one is that we’re willing to take on the entirety of the problem. So I’ll stay with the utilities example there. Everything from meter data management and running software in meters, actual electric meters inside the home and even beyond the meter with smart thermostats and things like that, all the way back and through the financial reporting of the company. The ERP systems, the back office, and all the infrastructure required to power that. So to your point, if you look at a lot of the other folks that are in quote verticals or doing verticals, I think they’re doing one to two things. They’re doing a piece of it, a piece of a vertical. And certainly some of our competitors are involved in pieces. Or they’re taking horizontal technologies and really overlaying vertical terms on top of those.
So analytics tools are one of the things that I think are labeled as vertical solutions probably more so than any other. And I don’t discredit the fact that I think other organizations have done a very good job in understanding verticals and understanding what’s important and how to speak in the language of that vertical. For us, the key differentiator is to deliver the entire stack. Now, part and partial to that. Since we have to deliver and build the entire stack, I think we’re familiar with all of the components. And what usually happens is that customers have made investments in other vendors, other technologies for some pieces of those components. So the way that we build that stack has to be highly abstracted and we have to be able to connect to in some cases, our competitors, in some cases our partners.
And that’s why the lab is so important because it showcases not just what we’ve built at Oracle, but it showcases our ability to work with the ecosystem, which is equally important. I mean, it’s impractical to think that one vendor is going to solve every single problem at every single vertical. I do think we can certainly solve and create business solutions for our fair share of them. But there will always be niches, there will always be things, especially in regulated industries where you have state specific things, something like that. And that’s why we put this together. Not just to showcase and innovate our own technologies, but making sure that we create a platform to stitch together all of the partners as well. So I think those two things. Willing to take on the entire problem rather and also willing to embrace the ecosystem are key differentiators.
Daniel Newman: Yeah. That deep industry domain knowledge is super important. And it is something with hundreds of thousands of customers being really responsible for their back office operations and in many cases, the front end of their customer experience and integrations provides a pretty wide scope. And it’s a pretty significant amount of data that you are accessing. And with all that information, and of course the power of compute, there’s a lot that can be done to understand a business and to build solutions that are going to take them forward and take them forward faster. You hit on a few things. I think when you think about industries, you think about verticals. There’s been a lot of what I kind of call facading of industries, where it’s kind of like we’re going to build one solution and then we’re going to kind of make it for financials and then we’ll make it for healthcare and then we’re going to make it for manufacturing. And it’s kind of the same thing.
And so what I really thought was interesting about the lab and what I want to get your take is that what you were really thinking when you built the lab is that the problems aren’t a facade and the challenges even in the same industry are often different for each company. They have a lot of technical debt. They have different customer processes, they have different data sets, they have different compliance and regulations in the HRIs. So a lab, right? We got to be able to build and tear down and change and co-create, all these things. Is that really what it came down to for these verticals is that you knew even if you had vertical solutions, you still need that lab environment to really build for each customer?
Mike Sicilia: We did. And I’ll tell you exactly how it started was, was a conversation in my office many years ago, when we were talking about our construction technology business specifically at the time we said, “The difficult thing is the vertical edge solutions that we supply for construction are often used in the field, they’re actually used on a construction site. And when we talk with a lot of our customers and our competitors do the same, we often have these conversations in fancy conference rooms and the it’s weather control, that’s always 72 degrees. It’s always very nice, but that’s not the practical usage of the system.” So we said, “We need really need to build a place where people can come use these solutions in a real world environment, in an actual outdoor and indoor,” and that’s why the lab is indoor and outdoor because of this construction business.
And they then need to be able to see, touch and use it in the environment that they’re actually going to use it in. We need to have the end users, who really don’t often come in our construction business to the boardrooms, to the conference rooms around actually working, building something, be able to see, touch and give us feedback and co-innovate with us at these things. So that’s, frankly, how it all started.
What was really most interesting to me was the building of the lab itself turned into a project. So a company called Pepper Construction, one of our customers, built the lab and they used all of our software and some partner software as well to build. And actually, we had other customers come in to see during the construction phase, this thing going live and seeing the cloud solutions that we were demoing to that.
I think the most telling point for me was there was a customer who was scheduled to visit. And as you know, it’s not too far from Chicago, so the winters aren’t exactly very friendly. And there was a snowstorm coming in and they said, “You’re not going to cancel for the weather. Right? We’re still going to be able to come to see this thing in the weather because we have to work in the weather. Sometimes when the weather’s bad, we still have to work. You know, if something topples over, we got to get out there and do it.” So they actually showed up in boots, in snowsuits, with some warm jackets on and proceeded to do the entire tour of the construction site in the lab in not so friendly weather. So I think that was really for us, the tipping point was, we needed to be credible and we needed to make sure that this stuff worked in the environment that it was actually going to be used in.
And from there you get into lots of other things, maybe we’ll talk about 5G and how all that applies, and all that all those things apply, but that’s how it happened.
Patrick Moorhead: Yeah. I think everybody has their favorite when they go visit the lab. I can’t figure out which one was my favorite, the public safety demo or the robot dog that was doing a 3D and a color mapping of Boston Dynamics robot dog. That was pretty cool. But listen, this is your baby. And I’m curious, I know you love all your kids the same, but was there any specific demo that you thought best encompassed the capabilities, or not demo ,the co-creation that you’re especially proud of?
Mike Sicilia: Well, I think that everybody loves the dog, I love the dog and the dog has been the longest standing mascot, if you will, at the lab. The dog was the very first partner. The Boston Dynamics dog was the very first part partner to show up there and do two things. But I’ll give you two. What about an evolutionary example? The dog is submitting real time data to OCI and lots of data doing perimeter scanning, high definition perimeter scanning, LIDAR coordinates, and all these things that is aggregating. And it’s doing that now over a 5G network. Verizon is 5G, as you know, from the lab is 5G enable the lab, this is real 5G, not 5G edge, not the see on your radio, but actual, real 5G. So you’ve got a few things coming together. Number one, a robot, a robotic, I think, which is a huge help for in construction to have as many robots supplement the workforce as possible because we’re short workforce today in construction.
And these robots are not taking away jobs; they’re adding to productivity of existing job forces streaming real time over 5G to the cloud. And then, Oracle compute automatically processing all this in real time that pre-this experiment here was a pretty manual process and a manual process in which you would not get real time data. So, that really is my favorite example. Truth be told, I’ll probably change my mind as this thing continues to grow many, many times, but for now I have to give it to the dog because it was the first example as well.
Daniel Newman: Yeah, that’s a fun one. And by the way, we’ve seen that dog in a few places with Boston Dynamics around the world. So it’s always fun to interact with. And for whatever reason, it’s a bit of a hit on social media. Whenever we share it, people are just super blown away by it. But Boston Dynamics does some really interesting work. I still remember the warehouse robots with the boxes, and it’s just incredible what they’re building there. One of the ways Mike, that we typically are able to qualify something like a lab is really digging into these success stories. I liked your story about winter, by the way, I spent 40 years in Chicago. Moved to Texas during the pandemic, I’ve grown thin skin, and now when I was up there for the day I was freezing, I was so cold, I was miserable. I immediately remembered why I left, but having said that, 40 years in Chicago, you’re absolutely right. So that was a great example. I mean, there’s so many things we did in bad weather because you have so much bad weather and it’s just part of building in a four season type of climate.
But you know, when it comes to the success stories, co-creation, we’re hearing more about this kind of quote unquote, “Co-creation” lately, Mike, and what is a successful outcome? Do you have any stories that you can share that really are indicative of just how far and how successful a lab partnership can go for one of these industry solutions?
Mike Sicilia: Yeah. So, I have a couple thoughts come to mind here. It’s a great question because I think what you’re hitting on is the key thing is that it really has to be a functional lab. It has to be a place for innovation and not a museum. I think I’ve seen lots of other labs, and some towns turn into museums and demo spaces and well, I don’t mean to be disparage that-
Daniel Newman: Briefing centers, Mike. Briefing centers.
Mike Sicilia: Yeah. We’ve got to turn this thing in where we really create something. So what I think has been most successful thus far and it’s early days, it’s early days, frankly, we’re getting Revved up and getting more and more excited. Because we have over 40 partners who have already signed up and have a permanent fixture in the lab. And I’ll go back to what I said in response to your first question, just as important to have all of the ecosystem participate as it is to showcase and co-innovate with our customers on the Oracle stack as well. If we don’t do both of those things well, then we will not be as successful as we possibly can in industry cloud. So I’m very proud, and I think this is a new direction for Oracle, frankly, is that we have embraced and encouraged ecosystem. And some of that ecosystem, some of those partners that you see there compete with us. They compete with us for individual pieces of the pie, and that’s completely fine. We can work together with those folks in a great way.
Now we talk about success and early success. I think the work that we’ve done with Verizon, and the fact that we’ve been able to take a technology like 5G, which if you think about, most folks know what is 5G going to do? “Well, it means that it’s faster, and the bandwidth is better and therefore I can probably stream 4K video over my phone.” And from a consumer standpoint, that’s interesting, but what does it really mean to businesses? It means something transformational to businesses. And the fact that we’re able to put real applications, build real vertical applications on top of our 5G service in this case, in top of our 5G core service, which of which most of the major telcos are customers and we can showcase real vertical applications. And we’re also providing a development platform so that partners can showcase real vertical applications on top of 5G, I think will be, in the near future, one of the most successful outcomes. Because that is what’s really going to UN unleash the power of a technology like 5G. The fact that it’s better, it’s faster, that’s great. But what does it mean to solve business problems? How does it actually solve business problems? What does it mean for telemetry into an ICU to look at very sick patients?
What does it mean for telemetry into the meters, particularly in places like Europe right now where energy conservation has become a huge need for the world given the crisis that we have right now with gas supply and things like that. So, you’re going to take horizontal technologies like 5G and turn them into vertical applications, that’s where the value comes from and that’s what I’m pretty excited about here.
Obviously, the dog does that today, a lot more dogs to come and cats and reptiles and every other thing I think will be in terms of a guard variety, and that’s where we’re focused. And I think that’s where you’ll see the next round of innovation is with partners building on top of our Enterprise communications platform, which gives you a development platform, assumes the 5G connectivity to do pretty incredible things with vertical applications.
Patrick Moorhead: So Mike, you and your team have poured your heart, and soul into this. And you’ve come out with the first lab, but I’m sure you are not stopping here. Besides robot lizards, what else should we be expecting in the future?
Mike Sicilia: So, we have two more labs, which are under development right now. One is at Redding in the UK. That will be the thematically focused on sustainability, energy sustainability, we’ll showcase a lot of what we’re doing with our Opower solutions for clean energy, as well as high density transport like some of the work that we’re doing with the UK government for high speed rail and things like that. We’re also building a lab in Australia, in Sydney, just near our offices in Sydney, and that is focused again on our asset intensive industries, construction, comms. And then I expect in the future that we’ll have more labs that are focused on things like healthcare, where we’re making major investments today. Also, on the docket and things that we’re thinking about in places like Nashville and Austin, Texas are food and beverage and restaurant and hotels as well. So all of those things are in development. We’ll have a lot more to say on these labs here in the coming weeks months on the next steps.
Daniel Newman: Mike, that was really interesting and appreciate you coming around and coming back to us, it’s always easy after an event to just move on and keep going. So we were really excited to have the chance to speak to you. Like I said, in the beginning really glad you’re feeling better, because it would’ve loved to have had the chance to sit down in person. Having said that, I’m not going to run back to Chicago anytime soon unless it’s to hang out at your lab again.
Mike Sicilia: All right, well maybe Sydney. Have we come to Sydney, Australia and it’s always beautiful weather in Sydney.
Patrick Moorhead: I’ll take that as the formal invite. That’s great. And if you’re opening up in Austin, let us know. Daniel and I both live there.
Mike Sicilia: Well, we will do that for sure. We’ll let you know when the time is right, look forward to hosting you in person and I promise to make it in person next time.
Daniel Newman: Absolutely. And Mike, we really appreciate it. We’ll have to have you back. We’ll want to hear more when some of these stories turn into customer successes. That’s one of our favorite things to do is talk to the market, not just about what the tech industry is doing but why it’s working. Because as we move forward and as personalization and customization continue to be a focus, it’s going to be these co-creation environments that are going to be key to making this happen.
Patrick Moorhead: That was great conversation with Mike, a lot of fun. It’s too bad. Mike couldn’t join us, but, hey, we are flexible with these Six Five on the road and it’s just great to be here. Daniel, one of the things that I really appreciated was that this isn’t just a place to do demos. Even though today, this is what they’re showing us. They wipe it clean, bring a customer in and do co-development with them. And that’s pretty impressive because I’ve been to a lot of labs and this one I think is different.
Daniel Newman: It was very interesting. It was fun. I always like learning and getting that sort of practical hands on experience because, like I said, you got to tie all this technology back to something. Seeing it in the wild, seeing the way it gets employed to make a difference in the world and then of course seeing how that innovation scales is something that I know both you and I really enjoy. So, Mike it was too bad he couldn’t make it, but it was great that we were able to get him in on Zoom.
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Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio