But are customers in a position to make these moves? I can't get out of my head a conversation I had a few years ago at a Microsoft Sharepoint event with Jeff Teper, corporate vice president of Microsoft Office. He was fed up with customers envying the features available on competitive platforms when he actually was offering exactly the same functionality in the current version of his own cloud applications.
People say that they can’t do this or that and I ask them have you seen our latest release?
Every vendor reaches this tipping point at some stage in their cloud evolution. Their cloud platform hits a level of maturity at which it's going to evolve so fast, customers will inevitably fall behind if they stay on the on-premise version.
For Oracle, this is highlighted most starkly around the issue of database security. The vendor needs its customers to embrace its autonomous cloud database because their on-premise systems are simply not keeping up with the speed of patching that's required to stay safe in today's connected digital economy.
Keep the trains running
But while Oracle is doing its level best to make its cloud platform as attractive as possible so that customers will make the leap, it can't force the pace. Co-CEO Mark Hurd is sensitive to the position customers are in, as he told me yesterday during a question and answer session with media and analysts:
A CIO or a CEO at any of our customers, they have to keep their trains running while they change. When you're in the flow, you're trying to close the books, you're trying to grow revenue, you're trying to take out cost and you're trying to invest in next architecture for the next 10 years and five years — trust me, this stuff is hard. At Oracle, we get a front row seat to that every day.
It's really the fact that, 'I have to invest tomorrow while I have to survive today.'
In other words, customers will make the move as fast as they can, but they have to balance the need to innovate with the need to keep their operations on track in the meantime. According to the predictions Hurd set out in yesterday's keynote about the pace of change it will be almost a decade before all customers have made the move. Hurd is leaving it up to them to work out how to make the transition.
If you talk about the question in the context of the destination that we're going to get to, it's why we say, this is an irresistible force. This is going happen. The only debate is how fast.
I made the statement it would be a decade. The data's saying I'm roughly right. Maybe I'm a little slow maybe, but I think that what the issue is, it isn't about what is happening, it's the pace. The pace always comes down to the amount of change that these companies can deal with simultaneously.
Doing it right
Asked what factors are pushing people towards the cloud, Hurd cites several factors but notes that enterprises are also cautious to make sure they get it right when they do make the move.
There are a whole set of drivers that are pushing people in this direction. There's unplanned things that occur ... There's a cost dimension to this, there's a security dimension to this. There is a whole set of these things.
Customers in the end want to do less and they want to get someone else to do it. What's important is, while we want someone else to do it, it has to be done right. What customers can't do is just simply transfer things that're going to be just as complicated, just as difficult. So my complexity that I have on-prem is now my complexity in the cloud. Not a good idea. My cost on-prem is my cost on the cloud.
So this does require a little more strategy, a little more thought than, just move. I don't think a discrete event is going to necessarily accelerate the trend. It's a combination and a culmination of a lot of events, a lot of thinking and a lot of planning about how I get to the best long-term destination.
It's interesting for me to see Oracle hit this tipping point that other vendors have already reached. It's only now that the technology has reached a juncture where it's really forcing the pace. At OpenWorld this year we're seeing a two-pronged approach — what Denis Pombriant described in his write-up earlier as a carrot and stick approach. The carrot is the technology — what's now achievable in the cloud. The stick is the competitive pressures — plus the newly emphasized factor of risk exposure — that Hurd has laid out.
Now it's up to customers to decide when and how to make their move.