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Oracle desperately seeking cloud cred

Barbara Darrow, Senior News Director and Carl Brooks, Technology Writer
Oracle execs will try to convince the universe that the company "gets" cloud computing with a series of cloud computing forums kicking off February 23 in North America.

The company has its work cut out for it.

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Oracle CEO Larry Ellison caused a stir with his very vocal musings about the term "cloud computing," which has been abused and misused over the past few years. In his view, cloud computing is not a revolutionary departure in the computing model but an evolution of time and resource-sharing practices. In his view, therefore, Oracle already is a cloud player because its database and middleware underlie such cloudy ventures as Salesforce.com's successful Software as a Service (SaaS) business and Apple's iTunes web store.

And Oracle joined the SaaS fray years ago with its own CRM OnDemand. That offering now accounts for more than 85% of Oracle's CRM sales, according to Ray Wang, analyst with The Altimeter Group.

Still, most pundits say Oracle has to do more to prove its cloud cred.

"[Ellison] talks about Salesforce being based on Oracle? Salesforce has invested years upon years of work on top [of Oracle technology] that has nothing to do with Oracle," said John Rymer, principal analyst at Forrester Research.

Oracle building cloud computing credibility
Even some of Oracle's own reseller and integrator partners said the company has to make up for lost time in the cloud after having lost some of its most visionary technologists and technologies to start-ups -- some funded by Ellison himself.

"This whole road show they're doing is meant to show Oracle's vision of the private cloud … they don't want to look like the red-headed step child in that they don't believe the cloud is real," said one west coast Oracle database reseller.

"Oracle's interpretation of being in the cloud is much the same as it's take on being part of the dot.com boom, and that is: 'We're in the cloud business because everyone in there buys and runs our stuff.'" But, in reality, there's a huge difference between being the building blocks of the cloud and truly getting into the cloud business, this partner said.

Ellison's verbiage and the impression it created may be hard to overcome. Plenty of people at Oracle have no trouble grasping the implications of cloud computing and the opportunity but they have to tread carefully and find a way to get started "without calling Larry a liar," Rymer said. That's part of what this world tour is about -- showing off some of the company's progress in cloud computing while dodging direct confrontation with a boss who dismissed cloud computing as "everything we already do."

Salesforce has invested years upon years of work on top [of Oracle technology] that has nothing to do with Oracle.
John Rymer, principal analyst at Forrester Research,
If Oracle really wanted to be an integral part of cloud computing back when Salesforce.com and NetSuite got started, then Ellison wouldn't have supported those non-Oracle efforts and kept the cloud apps in house, this partner said. Ellison and other Oracle veterans staked and started up those spin-off businesses. This partner could only shake his head at what Oracle would have become if it had kept all that technology and expertise in house.

Legacy software players protected their on-premises base
The knock on Oracle and many legacy software vendors is that they were so busy protecting their on-premises businesses that they were slow to rearchitect their offerings to work optimally in the cloud. Microsoft got the message a few years back and put the pedal to the metal on Azure, which became commercially available early this month.

Some argue that much as Microsoft was forced to react by Google's success in getting customers to at least try consumer applications via a services model, Oracle got its CRM on Demand act together to fend off Salesforce.com. They would also contend that Oracle dragged its feet in other markets because it has not yet seen impactful competition there. The addition of Sun and some of its cloud-related technologies could help Oracle regain some ground.

Customer reaction to Oracle's earlier cloud forums -- the company kicked them off in Europe two weeks ago -- is two-fold, said Dr. Stefan Reid, Forrester senior analyst for vendor strategy.

"Some customers embraced the potential immediately and were very pleased about the final commitment of Oracle to the cloud business. [Others] were struggling to understand the disruptive difference from already existing Oracle scale-out mechanisms like grid and RAC," he said, referring to Oracle's real application cluster technology.

Large customers still fear vendor lock-in, something Oracle is trying to address by saying Fusion middleware will enable deployment flexibility as opposed to pure outsourced platform services like Salesforce.com's Force.com, Reid added.

In his view, Oracle will continue to focus on providing building blocks for clouds and will resist the temptation to become a full Platform as a Service (PaaS) player. It will continue to offer SaaS implementations of applications as needed.

Barbara Darrow is the Senior News Director and Carl Brooks is the Technology Writer for SearchCloudComputing.com.


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