Oracle CEO Sicilia Hammers Home "Fusion" of Apps + Agentic AI

Bob Evans (0:00)

Hello, my friends, welcome back to Cloud Wars Minute. I wanted to go into a little more depth here on some comments made on Oracle's Q1 earnings call last week that describe its philosophy and position and strategy where agents meet applications. It's very different from what anybody else is doing in the market. I think Oracle's has by far been speaking with the most clarity about what the interplay between apps and agents is going to be. And for customers, I think that's incredibly important. There's just a couple of years ago that Satya Nadella from Microsoft sort of turned the whole apps world upside down when he said that the arrival of AI and agents and co-pilots would hollow out applications and turn them into a little more than what he called CRUD databases. So on the earnings call last week, Oracle's two CEOs, Clay McGuirk, who largely oversees what they're doing with their Cloud infrastructure, and Mike Sicilia, who's more focused on the application side of things. And I want to talk a little bit about some key remarks that Cecilia made at the opening of the call about Oracle's view on applications and where apps and agents provide. So Cecilia focused on the notion that Oracle's suites of applications and they're moving into not only LOB suites, but also industry suites. He said, seamlessly blend agents and apps together. That's a simple statement, but very clear. And for customers who are wanting, gee, I've spent $40, $50 million over the last handful of years on applications. Is that all going to go down the drain with the rise of agents here? So customers have to get more clarity from the software vendors about what's happening. And again, this is why I think Oracle is leading the way on this. Sicilia said AI is an accelerator for packaged apps, not a replacement. And he cited a number of ways that acceleration is happening. He said, we're going to see with this blend of apps and agents, employees will shift to overseeing agents, they'll be resolving exceptions, and they will be using human judgment to some complex decisions that come up. And he said, again, this very tight blending of what they're calling fusion, agentic applications is going to make that possible. Now, again, I think what it's important to remember is just about two years ago, Satya Nadella on a podcast interview was describing this. And he said, AI is going to command takeover all sorts of things, applications are going to be rendered to a much less valuable, much less strategic position.

And he said, we're going to go after this with agents and co-pilots said, we're going to go after this aggressively and we hope to collapse it all. And he was referring there to the current state at the time in late 2024 of the role that applications had. Now, I think this has caused, and I've talked about this before, an incredible amount of confusion and concern among business customers. As I said, they've invested heavily in applications. This is how they're told we're going to run our business, interconnect with others in their industry, suppliers, partners, customers.

This is what's running the global economy. And then we have someone of the stature of Satya Nadella saying, hey, better run for cover because this whole thing is going to go boom. When we hit the plunger here, an AI is going to gut and skin what applications currently do. And that has not proven to be the case at all. You know, Mark Benioff has ridiculed this notion about the SaaS apocalypse. We've heard of Neil Boussry at work. They say the same thing. At SAP, they have completely dismissed this idea that agents and apps are going to disappear because of agents.

But I think of all those companies, Oracle has done the best job consistently of describing, here's where apps end and agents begin, where agents complement what apps are doing. In fact, Oracle has taken it to the point, as I mentioned a second ago, they're now calling their products Fusion, agentic applications. So completely pushing the two together.

We will see how this plays out over the next few quarters. But in the earnings call, Sicilia was very bullish about the growth of the applications business at Oracle. And in a detailed article, I'll have later this morning on cloudwars.com, I offer a number of examples about how Oracle's software executives have been leading this charge for clarity and to eliminate the confusion that customers are facing. They've been doing this for the past 18 months, and I've got links to some interviews I did with Oracle's former EVP of Application Development, Steve Miranda, and a couple more recent ones with the new EVP of Enterprise Apps, Chris Leung, and then this reference here to the CEO, Mike Sicilia. Thanks for being with us here at Cloud Wars Minute. I hope you have a fantastic day.