Oracle CEO Hurd Stays Ellison's Course - InformationWeek

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9/30/2014
09:36 AM
Doug Henschen
Doug Henschen
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Oracle CEO Hurd Stays Ellison's Course

Oracle flexes its muscle with a wave of SaaS releases and high-profile customer interviews. But is it leading or following in the cloud?

press conference. His initial response was to put the competition in its place, calling SAP a "legacy company that hasn't rewritten much of anything for the cloud" and referring to Salesforce.com and Workday as "US-centric, one-app companies in the cloud."

How is Oracle different?

"We bring a suite of applications to the cloud -- marketing, HR, ERP, EPM, customer experience," Hurd said. "The result is both best of breed at the app layer and there's the ability to interconnect those apps into a suite. None of those three companies can even remotely make those claims."

[Want more on Oracle OpenWorld 2014? Read Oracle CTO Ellison Claims Cloud Supremacy.]

Hurd went on to say that customers can extend Oracle cloud apps with Oracle platform-as-a-service capabilities including Java middleware services and Oracle Database services, so "Oracle is unique in its depth and breadth of capabilities."

You can quibble with Hurd's characterizations of the competition. If and when SAP completes its $8.3 Concur acquisition, it will be on a $2.3 billion cloud revenue run rate to Oracle's $2.0 billion. Both companies are well shy of Salesforce.com's $4 billion in revenue in its last fiscal year, earned not from one app but from a battery of sales, service, marketing, and collaboration apps sold globally (though, yes, mainly in North America). Workday is definitely US-centric, but it offers HCM and ERP suites that, by Oracle's counting methods, would count as many cloud-based apps.

Intel CIO Kim Stevenson praised Oracle's acquisitions of Eloqua and BlueKai.
Intel CIO Kim Stevenson praised Oracle's acquisitions of Eloqua and BlueKai.

What you can't quibble with is that Oracle's scale, scope, and strategy do matter. Larry Ellison's change of heart on cloud computing notwithstanding, Oracle has since been nothing if not consistent about its plans and goals. Gaps in the Fusion portfolio are closing and those years of waiting are slowly paying off. We hear consistent messaging, year to year, even if it amounts to pre-announcing and then re-announcing products and capabilities planned and later made available.

Oracle invests some $5 billion in R&D annually, and it has also acquired more than a few innovative companies. Intel CIO Kim Stevenson praised Oracle's acquisitions of Eloqua and BlueKai, cloud-based marketing apps that have helped Intel cut the time and cost of acquiring qualified leads, she said during her on-stage interview with Hurd.

When Oracle isn't first, best, or most innovative, it usually builds or buys its way to relevance. It gets in competitor's faces and accumulates customers, sometimes not by their choice, through its many acquisitions. In short, it's a great big force in tech that can't be ignored, and it keeps adapting as the industry changes.

Loved? Not always. Respected? Sometimes begrudgingly, yes.

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Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio
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D. Henschen
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D. Henschen,
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9/30/2014 | 1:40:58 PM
I wouldn't say "Suddenly"
I wouldn't say suddenly. Oracle has been building up its cloud-data-center capacity for years and it now has 19 data centers in 8 countries around the globe. In some cases these are run by third-party contractors that have been in the business for years. It' not AWS-scale, as yet, but it's big.
Lorna Garey
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Lorna Garey,
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9/30/2014 | 1:14:31 PM
Re: Margins
Running cloud-scale data centers is suddenly a core competence? 
D. Henschen
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D. Henschen,
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9/30/2014 | 1:11:48 PM
Re: Margins
In Oracle's analysis it will make more money because it's being paid not only for the app but also for providing the cloud services -- all the hardware, admin, maintenance and people behind the service. It's a safe bet it will be lower margin, but Oracle says its gaining service revenue and app subscription revenue (bundled together in the subscription) as it looses license revenue alone.
Lorna Garey
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Lorna Garey,
User Rank: Author
9/30/2014 | 12:17:48 PM
Margins
Doug, Oracle is known for making much of its revenue from ongoing licensing and maintenance, in addition to the upfront cost of the software. I don't see how it can maintain that sort of margin in the cloud. So, a customer dropping one of its legacy on-prem systems for the cloud alternative, as opposed to re-upping, equals a net loss, right? How will the Street react? 
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