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    Oracle CEO Larry Ellison Spits on Cloud Computing Hype

    By
    Clint Boulton
    -
    September 29, 2008
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      Oracle CEO Larry Ellison may like to race yachts out on the open ocean, but on the subject of cloud computing, the database captain of the world seems lost at sea.
      At least that’s what it seems like on the outside, but it’s likely all just a good-natured shot across the bow of everyday media hype.
      At Oracle OpenWorld last week, held Sept. 21 to 25, Ellison upbraided the marketing and hype around cloud computing, in which customers host their applications and other data on another vendor’s infrastructure and access them online, despite the success that Google, Amazon Web Services, IBM and others have had in leveraging the Web for business opportunities.
      For example, in this giddy post by Ben Worthen for the Wall Street Journal, Ellison eviscerated cloud computing:

      “The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop? We’ll make cloud computing announcements. I’m not going to fight this thing. But I don’t understand what we would do differently in the light of cloud computing other than change the wording of some of our ads. That’s my view.“

      Oracle could not be reached for comment. I have issues with Ellison’s comments, but first let me note that it’s true that so many companies are attaching the cloud moniker to their platforms.

      Several companies are taking products they originally created as on-premises solutions and porting them to the cloud, or putting them online for customers to access. These businesses are doing it partly because of marketing, but they also look at companies such as Google and Salesforce.com and believe the cloud is the future of computing.
      When Ellison says the cloud has come to encompass “everything that we already do,” he has a point. What many of us call the cloud now was known as grid or utility computing from about 2000 until the cloud euphemism floated to the surface of this world of Web 2.0, another maligned phrase.
      When Ellison says Oracle will make announcements around cloud computing, he intimates it’s because Oracle needs to keep up with the marketing hype. In fact, Oracle’s actions suggest that the cloud model is part of a fundamental shift in enterprise computing.
      Oracle embraced the cloud model Sept. 22 when it said customers could license Oracle Database 11g, Oracle Enterprise Manager and Oracle Fusion Middleware to run on Amazon.com’s EC2 (Elastic Compute Cloud). Oracle also embraces cloud computing’s little sister, SAAS (software as a service).
      Oracle could be thinking about survival with such moves, according to Pund-IT analyst Charles King.

      Cloud Computings Importance

      Noting that cloud computing has evolved to describe massive, transparent IT solutions in which the “brand of hardware and software” is of lesser consideration as long as it works, King opined that Oracle likely needs to associate itself with the cloud to avoid getting lost in the nebulous messaging of competing vendors:

      “Ellison may see a cloud-style environment where the type of technology behind the computing erodes over time. As long as you’re getting your SLA who cares what database it is? Cloud computing is dangerous to any player who doesn’t have any place to market their technology as a cloud offering.“

      For example, a company such as IBM could offer enterprises a cloud that may have Oracle’s database, but it just as well could have its own DB2. As long as the customer is served properly and is willing to pay IBM to host its data and content on IBM’s infrastructure, a company like IBM can afford to offer a rival’s product on its own infrastructure.

      So, if Ellison’s issue is with the hype, that’s fine. If he really thinks that cloud computing and SAAS are not where the industry is headed, then I fear he and Oracle will be going down with the on-premises database ship.
      Why do I think that?
      Google has built a monolithic business on the cloud computing concept and has Microsoft in a tizzy because of its SAAS collaboration software business. Amazon Web Services is changing the face of hosted computing on a daily basis and has, for better or worse, spawned a raft of PAAS (platform as a service) startups.
      IBM has spent easily billions of dollars setting up new data centers or opening up existing data centers to host customers’ applications. An IBM spokesperson told me Sept. 29:

      “Even with some stress that the financial services industry is seeing, we have some very large banks who are moving some pretty critical pieces of their risk analysis into an IBM cloud. If you’re telling me that doesn’t have enterprise value…“

      And Salesforce.com may not be making the money it hoped to at this stage, but its early success triggered an entire ecosystem of SAAS providers buttering their bread based on CRM, ERP, human resource management and billing.

      Microsoft is making a serious push into cloud computing, offering traditionally on-premises solutions such as Microsoft Office as SAAS.
      So Ellison may despise the hype, but you’d better believe Oracle will continue to embrace the cloud. Love it or hate it, it’s the future of IT.

      Clint Boulton

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