Larry Ellison’s Plan to Put Oracle in the Center of the Cloud
Last week, after disappointing shareholders with sales that fell short of expectations, Oracle CEO Larry Ellison promised to make some “startling” news this week.
The news, he said, would involve the cloud, and some important partners including Microsoft and Salesforce.com, companies with whom Oracle and Ellison have feuded in the past.
Time was that Oracle was a traditional software company. Its customers bought licenses for Oracle database software and business applications, installed them on computers they owned and paid Oracle support fees to keep them humming along.
But in the last several years, how software is delivered has changed fundamentally. The biggest example of this is Salesforce.com, run by former Oracle executive and Ellison acolyte Marc Benioff. Its customers pay monthly subscription fees to use Salesforce’s software that customers access from a Web browser, and which is installed on machines in data centers that only Salesforce employees ever touch.
On this front, Salesforce and Oracle are competitors. The primary Salesforce application is for customer-relationship management, or CRM — that’s Salesforce’s ticker symbol — and Oracle has a CRM application, too. For that matter, so does their mutual rival, the German software giant SAP. At a run rate of about $4 billion a year, Salesforce is the biggest company delivering cloud-based applications, also known as “software-as-a-service.” In terms of SAAS applications, Oracle is No. 2 behind Salesforce, in part by virtue of acquisitions of companies like Taleo and Eloqua.
Today, Oracle president Mark Hurd is expected to make some announcements with Microsoft CEO Steve Ballmer that will have some Oracle tools showing up on Microsoft’s cloud service, known as Azure. Other expected announcements include Salesforce and NetSuite, the cloud-based business software company in which Ellison is a major investor.
It may or may not involve any of them using Oracle’s latest database product, known as 12C — the C is for “cloud.” That would be considered a huge win for Oracle. We’ll know more about the specifics — and how “startling” the news really is — later today.