Oracle’s Half-Hearted Public Cloud is Hugely Important

Grazed from Sys Con Media.  Author:  Roger Strukhoff.

Oracle’s public-cloud announcement at the recent Oracle OpenWorld (OOW) was mostly marketing spin, innuendo, and a half-hearted attempt to get enterprises to move to cloud computing.

It is for these reasons that it’s among the most important cloud announcements of the year…

For starters, I see no contradiction between Oracle CEO Larry Ellison’s earlier description of cloud as "gibberish" and his more recent conversion to it. His original statement referred to what other companies were offering, and he just didn’t see the distinction between the new cloud paradigm and the old centralized mainframe set-up. Now he has offered up his version.

It feels like marketing spin because a.) much of it is not available yet, b.) he’s created a multi-tenant bogeyman c.) he’s accusing Salesforce.com of vendor lock-in when in fact he, like all good technology vendors, love nothing more than their own vendor lock-in flavor.

None of this will surprise or anger IT pros. The best CEOs are glib showmen to some degree, and Ellison is underrated in this category. The real question is, to paraphrase a funny line from an ancient movie: "Pretty. But can it fight?"

Taking it Seriously
I would say that Ellison’s Heroes can indeed fight. Whether we like it or not – and Ellison is as detested a competitor as was the late Al Davis – Oracle has dominated the core functionality of enterprise software worldwide for almost two decades now. Even as Salesforce.com approaches $2 billion in its annual revenue run rate, Oracle rakes in $35 billion in annual revenue and has a market capitalization almost 10X that of its rival.

That Ellison would take Salesforce’s challenge so seriously – calling it a "roach motel" and triggering some bizarre drama over Marc Benioff’s keynote OOW keynote – implies that, well, Ellison is taking Salesforce’s challenge very seriously. This should result in continuous progress for Oracle in the cloud, as it seeks to match or improve upon whatever Salesforce offers.

Ellison’s underwhelming enthusiasm for moving its customers to the cloud may, over time, drive a large percentage of them to it. He’s not changing the rules of the game, but providing the easiest path imaginable for customers to move.

It seems he understands and is embracing the classic IT fears about security, SLA enforcement, and potential job loss associated with cloud computing. By easing his customers’ transition, he may find that they find they like it after all.

Oracle’s seemingly half-hearted attempt at public cloud should be the catapult that launches big enterprises into the cloud. As big enterprises migrate, interest will pick up in the SMB sector as well, to the benefit of most other cloud vendors.

 Who Cares What  It Costs?
I can’t imagine the number crunching that Ellison’s poor financial people must have had to do to come up with public-cloud pricing models, but we all know it won’t be cheap.

Fine, because Oracle is a big company’s company, and cost savings shouldn’t be the top consideration for large enterprises and cloud computing.

Moving big capital expenditure budgets to monthly operating costs is important sure, but this does not necessarily imply a reduction in TCO. Big enteprises need instead to focus on capacity planning, future-proofing, and unleashing their technical talents on improving their own products and services.

Now if Oracle can stop acting like a vaporware vendor and provide its new services to customers around the world (not just in the US), we may see that Ellison’s OOW speech was not only one of the most important this year, but one of the most important so far in the history of the young cloud-computing era.