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Forrester Research Inc
As the business day was closing in California on Wednesday, Larry Ellison’s tweet machine offered its first proclamation. “Oracle’s got 100+ enterprise applications live in the #cloud today, SAP’s got nothin’ but SuccessFactors until 2020.”
Ellison appeared on Twitter a couple of days ago at the @larryellison handle. Ellison opted for a straight-laced photo in which he sported his customary tanned face and black shirt. As he thought about his first tweet, more than 20,000 people followed his account and waited with great anticipation for some insight, some comedy, some awesome mud-slinging.
The result was more Meh than Awe-Inspiring. On Wednesday, Ellison presided over Oracle’s (ORCL) entry into the cloud computing game at an event held at the company’s headquarters. At long last, Oracle has decided to offer much of its business software as a rental service rather than requiring customers to buy Oracle’s software and run it on their own data-center hardware. Oracle is years behind rivals such as Salesforce.com (CRM) and Workday, so Ellison opted to take a shot at fellow business software maker SAP (SAP), which, like Oracle, has been a cloud laggard. (“Welcome to the cloud, Larry, we’ve been waiting for you,” Forrester Research (FORR) analyst Vanessa Alvarez quipped in her own tweet.)
Ellison has taken some shots over the past couple of years for being in denial about the cloud. But I don’t think that was ever the case. He invested early in Salesforce.com and retains a huge stake in Netsuite (N). Ellison the investor has benefited quite a bit from the explosion of cloud software.
Ellison the chief executive played his cards well, too. He called the cloud overhyped, which it was. And he made sure Oracle’s customers kept signing up for new, multiyear software licenses for as long as possible before Oracle—owing to competitive pressure—had no choice but to offer competing services. Large companies have been among the most reticent to move to the cloud, so Oracle had little to lose from this strategy until cloud startups like Workday matured.
On paper, the new Oracle cloud sounds compelling. Companies can buy a variety of applications—HR, sales, marketing, etc.—from one place rather than picking up similar software from a variety of cloud startups.
Oracle also has a new twist on how customers choose their cloud software. Most cloud software companies run the latest version of their software in their own data centers and upgrade their customers en masse every time a new version of the software is ready. Oracle, by contrast, will give companies a year to upgrade. “We think a modern cloud lets you decide when you want to upgrade,” Ellison said. “We don’t decide for you.”
Ellison hit the modern theme again and again, suggesting that Oracle has done the cloud right, while the startups have made serious architectural mistakes. He boasted that Oracle spent seven years designing its cloud technology and that the company has been undergoing an internal makeover toward ”modern computing,” Ellison said. “We are eating a lot of our own dog food, and it tastes great.”
Over the past few months, Oracle has spent billions of dollars to acquire cloud computing companies such as Taleo and RightNow in a bid to build out its product line quickly. Just in the past week, Oracle bought a pair of startups, Vitrue and Collective Intellect, to add some social networking twists to business software—the type of thing Salesforce and Workday have done for years.
So Oracle’s cloud technology looks part “well-thought out strategy” and part “we’re building this on the fly.” Whatever the case, the cloud startups must now contend with the Big Dog of business software and its CEO’s sharp, Twitter-ready tongue.