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SAN FRANCISCO-In a perfect world, Oracle CEO Larry Ellison and Microsoft CEO Steve Ballmer would have been on the cloud computing panel moderated by Tim O’Reilly at the Web 2.0 Summit here Nov. 6.
They would have been able to defend themselves from the stinging digs from Salesforce.com CEO Marc Benioff and Google Enterprise President Dave Girouard. Indeed, it would have been the kind of contest reserved for males over cloud computing and SAAS (software as a service), where software providers host applications and infrastructure for customers.
Instead, the jibes went uncontested. Benioff said that when Ellison dismissed Salesforce.com and cloud computing, Ellison was leveraging the Sun Tzu “Art of War” strategy-“when weak, feign strength”-and that that was the “right approach for him.” Oracle specializes in on-premises database systems.
In answer to O’Reilly’s question about margins for cloud computing being lower than traditional software businesses, another claim made by Ellison, Benioff said it’s unfair to compare the cloud model to “mature, dying models like Oracle or SAP, which may be already dead. … It’s a little bit apples and oranges.”
Benioff, looking worn out from his company’s Dreamforce event this week, also welcomed Microsoft to the cloud, with a caveat:
“I think it’s fantastic that they’re coming in and saying they’re going to have something one day,” he said, referring to Microsoft’s announcement of its Azure cloud computing platform at its Professional Developers Conference last week. Azure is not expected until 2009.
Girouard was more diplomatic, but picked up where Benioff left off with the fruit metaphor. He welcomed Microsoft, which is building Office Web, an answer to Google Apps, by saying that Microsoft will eventually be able to go apples-to-apples with Google, but “we think our apples will taste better.”
VMware President and CEO Paul Maritz (who once oversaw Windows, Office, Visual Studio, and other key platforms and applications for Microsoft, and now runs an EMC-owned business focused on providing virtualization infrastructure to enable companies to run their computer systems on the cloud) and Adobe CTO Kevin Lynch were also on the panel, though they did not partake in the spear throwing.
Other Comments from the Cloud Panel
Other comments from the cloud panel included the following:
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Maritz said we are moving away from a device-centric world to an information-centric world, where all of us are “increasingly characterized by a body of digital information” that will outlast information. Girouard, who oversees Google’s cloud-based apps, later noted that he views his Mac laptops and other clients as almost disposable devices because his information is stored in the cloud. Is anyone surprised?
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In answer to O’Reilly’s question about what’s wrong with the current cloud, Lynch, whose company provides very cloud-friendly technologies in Flash and the AIR development platform, noted that the cloud service providers offer very proprietary stacks, so once users are on them, they’re stuck. Maritz agreed, noting that it will be a challenge for developers because they have to make big bets about who to build for. This is the same argument people reserved for Microsoft, Oracle, SAP and other enterprise software providers for years. What is old, is new.
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Yet Benioff pointed to the integrations between Salesforce.com and Google as examples of interoperability that provides greater value to customers. Salesforce.com also integrates with Amazon and Facebook. But a few integrations do not constitute a truly open ecosystem.
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Girouard defended the margins for cloud computing, arguing that a cloud computing solution will have greater margins over time because of the value for customers. Maritz said two keys are needed for high margins: a unique product and a platform with an ecosystem. Coming from a leader of Microsoft Windows and Office, it’s hard to argue with that. Benioff said it takes time to build up margins, noting that IBM told Ellison that his company had low margins in 1986.