REDWOOD SHORES, Calif.—Oracle intends to decisively beat top rival SAP in enterprise apps, said co-CEO Safra Catz in a briefing with reporters here April 30 at company headquarters.
“We’re still number two to them in applications, even when you subtract the resell of Oracle database they include in their number. We’re not about winning by a nose. We’re going to pass those guys by a mile.”
Catz and co-CEO Mark Hurd claimed SAP missed the boat by not committing fully to apps specifically developed for the cloud as Oracle did as part of its Fusion Initiative, which was a massive project to rewrite the code of its apps portfolio and to develop middleware to enable the apps to work together.
Most of those apps had been acquired through corporate acquisitions of a multitude of companies, including PeopleSoft, Siebel Systems, Hyperion and Innobase. They represented a disparate code base that had to be integrated under the Fusion Initiative.
In a recent interview with Bloomberg Business Hurd said Oracle planned to have 95 percent of Oracle’s applications in the cloud by its Oracle OpenWorld conference this October. That would be a big jump from the estimated 65 percent of Oracle apps available via the cloud today.
Oracle’s biggest competitor for cloud apps is Salesforce.com, which was recently rumored to be Oracle’s latest acquisition target. However, Catz said Oracle never comments on acquisition rumors. “In most cases, the answer is no [i.e., Oracle isn’t the rumored suitor],” she said. “We’ve never had a deal leak, and we’ve never been the leak.”
She said if another company such as Microsoft acquired Salesforce, it would probably be good for Oracle in the short term because managing such an acquisition would be disruptive to that company’s operations.
Cloud Security and Revenue Growth
While making a big cloud push, Catz made it clear it’s up to customers to decide whether they want to stay with on-premise or cloud-based apps, depending on their comfort level and what fits best with their IT infrastructure.
Another speaker, Oracle President of Product Development Thomas Kurian, said the company’s strategy in the cloud is driven by its belief that there are many more people in the world who want to use Oracle products, but lack the infrastructure to do so.
“We want anyone in the world, as long as you have a browser, to be able to run our software without needing a data center or big investment in hardware and software,” he said. “We can improve customers’ agility by making this self-service and letting them use what they need.”
In response to a question by eWEEK about cloud security, Catz said she had no doubt Oracle offers more security than its competitors. “We had that level of paranoia about security early on at the company; our security consciousness is very prevalent and deep. We obsess about it.”
Oracle Aims to Leverage Cloud to Overtake SAP as Top Apps Seller
She also argued that customers who run their own thousands of instances of the Oracle database run more risk than if they had Oracle manage it. “We handle all the patching and updates,” she said. “And one of our data centers is underground in Texas. You don’t know where it is. There is not a possible chance it could be breached.”
Oracle is “fundamentally a product company,” Hurd said, and revenue from the cloud is racing ahead at a run rate of over $2 billion a year. “In Q3, we added more cloud ERP customers than Workday has totaled in its history,” Hurd said. “We’ll sell more SaaS and PaaS than Salesforce.com in 2015.”
While consumer spending on IT has “gone through the roof,” Hurd noted that corporate spending on IT has remained relatively flat. He said 30 percent of that spending is on testing and deploying apps. With its software-as-a-service (SaaS) and platform-as-a-service (PaaS) offerings, Java as the most popular developer language and Oracle as the most popular database, Hurd said the company is best-positioned to capture that revenue.
“You might say Microsoft would be our biggest competitor with .Net and SQL Server,” said Hurd. “I’m not going to say anything about that except that we like our chances.”
Hurd said Oracle has gone back to the future in looking for ways to enhance its workforce. He recalled that when he was starting out, he was recruited at his college campus and stayed with the company that hired him, NCR Corp., for 25 years, including six-to-seven months of training. He considered some of the training “drudgery” at the time, but came to realize it was quite useful in advancing his career.
“Our industry has taken a lot of that out by looking at training as more of an expense than an investment,” he said.
Unlike other tech firms, Oracle actively recruits at select college campuses and hired more than 1,300 recent college graduates in the United States this year. Hurd compared Oracle’s approach favorably to what he said was a more typical practice of “overpaying for some other company’s bad sales people.”
These new employees get several weeks of training and eventually join the sales team as part of Oracle Direct for as long as three years, which Hurd compared to an extended interview.
Asked about getting new customers, Hurd said that if Oracle wanted to double the number of customers it has now, it would be mathematically impossible because it already has so many enterprises and other organizations on board.
“We just have to sell more,” he said. “There are 200 companies in enterprise IT that account for 40 percent of all the spend. If you want to grow like us, you have to have high customer [satisfaction] and sell more things.”