NEWS ANALYSIS: Oracle will undertake a balancing act that has tripped up other companies by delivering a full range of cloud services while it keeps selling on-premise hardware and applications.
SAN FRANCISCO—The red cloud has finally fully enveloped Oracle. After years of an off-again, on-again relation with the cloud computing concept, Oracle acknowledged the necessity of being a full-service player in the cloud and is offering its entire range of database, compute and applications in cloud configurations.
While Oracle is offering up its support for cloud capabilities, it is not yet discussing prices or delivery dates for the full range of cloud services.
The cloud announcements were scheduled to be made by Larry Ellison at the company’s OpenWorld customer conference. However, when Ellison had to decide between appearing on stage to make the announcements or watching his team’s boat compete in the final rounds of the America’s Cup races, the boat won.
You can hardly blame him since Oracle Team USA has made a highly improbable comeback to tie the racing series 8 to 8 after losing 8 of the first 11 races in the best of 17 series. Meanwhile it’s opponent, Team Emirates New Zealand, had been poised to win the America’s Cup for the past week of racing if it could have only managed to win one more race. Now it will all come down to a final race here on San Francisco Bay on Sept. 25.
Ellison’s speaking engagement was taken over by Thomas Kurian, executive vice president of Oracle product development.
The cloud support from Oracle has ramifications which go beyond the technology shift. The company now faces a sales shift as business managers at many enterprises are making the cloud application decisions for their operations. The human resource manager makes the human capital management cloud decisions and sales managers make the sales applications decisions. CIOs and IT departments have a support role, but are not the key decision-makers.
In addition, Oracle will now face the prospects of selling both on-premise, hardware-based systems and cloud-based systems. On-premise systems are traditionally capital equipment purchases whereas cloud applications tend to be subscription-based purchases.
While Oracle executives said they were not ready to reveal pricing, those executives said the pricing will be competitive with other cloud services. The difficulty of offering both hardware-based on-premise systems and cloud-based alternatives has tripped up other vendors and requires reorganizing—and in some cases dividing—sales organizations to call on different parts of customer organizations. Oracle hopes to differentiate its cloud offerings by offering full management including patches, updates and back-ups.
The Oracle cloud applications have been sold for three years and now reach more than 21 million users, according to Oracle. At this year’s event the company added new cloud database and platform services. Oracle now offers the application services, social services, platform as a service and infrastructure as a service. “We are the only cloud that gives you all these capabilities,” said Kurian, adding, “It gives you, our customers, a platform to transform IT.”