Larry Ellison: I’ll “reshape the cloud” next week

SUMMARY:

Larry Ellison plans to reshape the cloud next week – with a bit of help from NetSuite, Salesforce.com and Microsoft. Not bad for someone who used to struggle even to say the word ‘cloud’.

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Ready to reshape the market?

While my colleague Kenny MacIver has been running the numbers on Oracle’s cloud business, what caught my ear from Oracle’s financial results conference call  this week was a typically bold claim from CEO Larry Ellison that next week he plans to:”reshape the cloud”.

This suitably modest ambition will be enabled by a series of what Ellison called “startling” technology partnerships with “the largest and most important SaaS companies and infrastructure companies in the cloud. They will all be using our technology, committing to our technology for years to come”.

At the heart of this will be the long-awaited Oracle 12c database which Ellison proclaims to be “the foundation of a modern cloud where you get multi-tenant applications with a high degree of security and a high degree of efficiency, you at least have to sacrifice one for the other…12c in other words is the most important technology we’ve ever developed for this new generation of cloud security.”

Friendly fire

What’s interesting is the trio of partner company names Ellison dropped into the conversation: Salesforce.com, NetSuite and Microsoft. NetSuite’s a bit of no-brainer given its connections with Ellison and his family. The real news would be if NetSuite chose not to have a technology partnership with Oracle.

But the other two…

Salesforce.com of course is a  long-standing massive Oracle database customer behind the scenes, so again perhaps there’s not so much to see here. But if these announcements next week see Ellison and Salesforce.com boss Marc Benioff playing nice in public again that would interesting. Benioff used to work for Ellison and frequently cites him as one of his mentors, crediting the senior man with educating him in the Art of War.

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Salesforce.com’s supporters out at Oracle OpenWorld 2011

There was the unfortunate incident a couple of years ago when rivalry between Oracle and Salesforce.com erupted at the Oracle OpenWorld conference.

Benioff found his conference fringe keynote suddenly bounced from the schedule and set up his stall in a hotel across the road, creating a PR coup in the process:

“Oracle just cancelled my keynote tomorrow. But the show must go on! Everyone is welcome to join me at Ame Restaurant tomorrow to hear about the social enterprise. Sorry Larry, the Cloud can’t be stopped.”

Ellison rallied the next day with a presentation that laid into Salesforce.com with considerable vigour, describing it as the:

“roach motel of Cloud services…you can check in but you can’t check out…it’s like an airplane you fly into the cloud and you never get out. It’s not a good thing.”

Since then it has seemed that much of Oracle’s cloud ire has been directed more in the direction of Workday than Salesforce.com, although old habits do die hard.

Ellison this week gave credit to Benioff’s achievements in Platform as a Service (PaaS), acknowledging Salesforce.com as the market leader (the ‘for now’ was left unstated but can presumably be fairly interpreted!). But he added:

“They started a long time ago, and they have a platform called Force.com, which is not based on industry standards. So when you make additions to Salesforce.com, you lie on Salesforce’s proprietary platform. When you make additions to our SaaS applications, you use the Oracle database and Java, the industry standards.”

It’s not  vintage “roach motel” material, but the underlying proprietary accusation remains the same.

There has inevitably been much speculation that Salesforce.com might one day want to wean itself off the Oracle database, if only to stop Ellison being able to cite Salesforce.com as a customer. But the implication of Ellison’s pre-announcement seems to be that the rival firm will be moving onto Oracle 12c after all.

Marketing motivation?

That leaves us with Microsoft. Is Ellison really saying that Microsoft will be running its SaaS apps on an Oracle database? Or is there some other motivation?

One factor here is likely to be Oracle’s acquisition of Eloqua. Oracle inherited a large customer base with a lot of legacy integration with Salesforce.com and Microsoft. All indications to date have been that Oracle does not want to rock that boat too much.

With Microsoft’s developer conference in San Francisco next week, Microsoft CEO Steve Ballmer is rumoured to be making an appearance at the Oracle announcement. (The phrase “Only Nixon could go to China” springs to mind for some reason…)

The other role of 12c will be to be a HANA-killer. Ellison stated:

“One reason I was confident SAP HANA could never compete with Oracle was because of 12c.”

With that, he was on a roll:

“Some of the SAPs largest customer’s, giant German industrial companies bought Exadata, not HANA to run their SAP applications. We virtually never see HANA in the market and SAP’s HANA numbers simply don’t add up.

“A recent analyst report pointed out that if you believe the HANA sales growth numbers and SAP’s most recent quarterly report, then SAP’s application business must have declined 10%. You decide, either HANA is doing well and SAP’s application business is in steep decline or HANA is not doing so well, but SAP’s application business is okay. You can’t have it both ways.”

Verdict

Well, let’s wait and see what comes out next week.

  • Further evidence that Oracle has full-blown cloud religion? Absolutely.
  • Startling partnerships? Sounds like there might be.
  • Further SAP-bashing? Almost certainly.
  • The cloud reshaped? We’ll come back to you on that one next week.

 

Disclosure: At time of writing,  Oracle, Salesforce.com, SAP and Workday are premium partners of diginomica.