Oracle Moves A 'Little Bit' Into Cloud Computing - InformationWeek

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6/24/2009
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John Foley
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Oracle Moves A 'Little Bit' Into Cloud Computing

Following his outburst against cloud computing last year, it appears that Larry Ellison has warmed up to the cloud computing model, if not the buzz phrase itself. Oracle's CEO yesterday said it's a goal to become the software industry's "number one on-demand application company."

Following his outburst against cloud computing last year, it appears that Larry Ellison has warmed up to the cloud computing model, if not the buzz phrase itself. Oracle's CEO yesterday said it's a goal to become the software industry's "number one on-demand application company."Ellison last year lambasted cloud computing, referring to the hype around it as "idiocy," "gibberish," and "crazy." As I pointed out at the time, however, Oracle was moving into cloud computing even as its leader railed against it. During a conference call yesterday with analysts to discuss Oracle's financial results, Ellison provided evidence that Oracle is indeed making progress on this front and has ambitious goals in the software-as-a-service market.

"We think we can be the number one applications company, the number one on-premise application company, and the number one on-demand application company. That's our goal," he said.

For now, Oracle has its sights on Salesforce.com as its primary SaaS rival, but Ellison made it clear that Oracle will compete more broadly. The company's forthcoming Fusion apps are "designed to be not only on-premise, but, from the ground up, to be software as a service," Ellison said.

Financial analysts on the call were keen to know more about the growth of Oracle's on-demand software business and its plans. One analyst put Oracle's on-demand business at roughly $750 million. Oracle's on-demand business is much smaller but faster growing than its on-premises business, Ellison said. "We see all of our applications software, not just sales force automation, going forward being sold in two ways, both on-demand software-as-a-service and on-premise, with the same code base," he said.

Ellison described three on-demand software models: on-demand software managed by Oracle customers in their own data centers; on-demand software managed by Oracle in its data centers; and on-demand software managed by Oracle in customer data centers. Of that third scenario, he said, "We think that's where the real value is."

Throughout all of this, Ellison didn't use the term cloud computing, referring instead to on-demand software. One analyst observed, "It sounds like you're getting into cloud computing." To which Ellison, the cloud antagonist, responded: "Little bit."

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