Is Oracle about to revolutionise the Cloud or is it gamesmanship to distract from another set of disappointing results?
Having missed sales targets for the second quarter running, with revenue from software sales and internet subscriptions well below what was forecast, there was much to mull over on Oracle’s financial results conference call last week.
The results were a reflection of weak demand in Latin America and Asia, said the tech giant. But clearly keen not to dwell on that, CEO Larry Ellison dropped the bombshell that his company was about to "reshape the Cloud".
And while further details were thin on the ground, he did reveal that Oracle are set to formally announce a series of partnerships with NetSuite and - shock, horror - Salesforce.com.
For a company that a few years ago couldn't even bring itself to say the word Cloud, Oracle has been chalking up a fair few milestones on that route.
According to Oracle President Mark Hurd: "Our Cloud now runs well over $1 billion run rate and it is bigger than both Workday and SAP combined in the Cloud. We are clearly the second largest provider in the SaaS market with more than 130 Fusion customers that are live in production today. In Q4 alone we added 500 new SaaS customers, 300 of those in HCM alone."
Workday is a bit of a thing with Oracle still it seems. Hurd goes on: "Not only are we bigger than Workday and HCM but we are growing faster than Workday. Recently we claimed that is 50 new customers in HCM and ERP.
"We added more than 50 in HCM alone and with more than 80 new Fusion SaaS customers we have great SaaS HCM wins at British Telecom, BMC Software, Siemens, Credit Agricole, Yahoo! and Intuit."
For Oracle CEO Larry Ellison, the critical differentiator between what Oracle does and what the competition do is that his firm plays on multiple levels of the Cloud - SaaS and PaaS.
"We’re the second largest SaaS provider in the world," he argues. "We added 500 new SaaS customers alone, 500 new logos at the SaaS layer this past quarter.
"We compete at the platform layer and if you kind of look at Oracle historically, that’s where you would expect us to be stronger," he adds, suggesting that in the Oracle database and Java the firm has "the two most important platforms on the face of the earth with building applications."
Ellison states: "On our Cloud platform business, we have over 5,000 customers in our Cloud. We have now over 3,500 or over 3,400 customers in the Oracle Database Cloud and another 1,700 in the Java Cloud and that’s just the beginning."
PaaS player
It's the PaaS aspect that sets Oracle apart, he suggests. "We think our PaaS business is one of our huge, huge competitive advantages," he says. You tend to think that the big Cloud players are either in SaaS, like Salesforce.com or in infrastructure like Amazon. You really don’t think of a real strong PaaS player. That’s where we think we have a huge advantage."
Ellison cites Salesforce.com to prove his point "They are the market leader and a big respect for what Marc Benioff has achieved over there, I think he’s done a good job, but they started a long time ago, and they have a platform called Force.com, which is not based on industry standards," says the Oracle boss.
"When you make additions to Salesforce.com, you lie on Salesforce’s proprietary platform. When you make additions to our SaaS applications, you use the Oracle database and Java, the industry standards.
"So we think customers are going to look at the entire Cloud and assess the quality of the application, SaaS, the quality of the platform and we don’t think any of the big Cloud players can compete with us in the platform there."
12c
Coming up next is the release of the Oracle 12c database which Ellison predicts "will be adopted by most of the big Cloud players as well as our corporate customer as they build Cloud inside their firewall.
"Another advantage that we offer is the Clouds that our customers are going to run internally made up of Oracle and Java is the same Cloud that we offer in our public Cloud."
This means that applications can be built and moved back and forth. "[Customers] can build an application in Oracle and Java on our public Cloud and move it back to their private Cloud," he explains. "They can take an application that runs in their private cloud and move it to the public Cloud. They can do test and development in the public Cloud and run it in their private Cloud."
This week Oracle will formally announced a series of partnerships with the likes of Salesforce.com and NetSuite which will see those firms upgrade their existing Oracle database backends to 12c.
"We think 12c will be the foundation of a modern cloud where you get multi-tenant applications with a high degree of security and a high degree of efficiency, you at least have to sacrifice one for the other," says Ellison.
"These partnerships in the cloud I think will reshape the Cloud and reshape the perception of Oracle Technology in the Cloud. 12c in other words is the most important technology we’ve ever developed for this new generation of Cloud security."
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The thing is if you read Behind the Cloud by Marc Benioff CEO of salesforce.com Marc kept telling the guys at Oracle that the future is in the cloud. Oracle refused to acknowledge as it did not fit into THEIR business model. I think it is a bit of a cheek that Oracle are giving it a big spin.
Thanks (0)Thanks for your comment Ian. What do you think of today's news that the two are teaming up together with Oracle's software now able to run on Windows Server Hyper-V and Azure?
Thanks (0)This is good news. I want to see Oracle do well...it´s good for cloud computing. I think Marc Benioff probably whispered a few ideas into Larry Ellison´s ear (as I believe they are still mates). Many businesses will always be on a Microsoft platform so this move will inject confidence for many organisations that are still contemplating whether the cloud is a good move for their business.
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