Anyone else skeptical about Oracle?
My Google filter on "saas" today was filled with articles on Oracle. That is a little weird to begin with, and as I peeled it back, I was surprised to see how much credit they were getting for their transition to the cloud.
First off, Oracle lumps IaaS, PaaS, and SaaS, into one big bucket called "Cloud", and even lumped together it's only 8% of their revenue. Their "Cloud" definition might be OK for pundits, but these are very different businesses. PaaS is, well, not much, as no one has really made a stand alone business out of a Platform-as-a-Service yet. IaaS is an on-demand data center business where Amazon is crushing everyone, and SaaS is obviously software. Reporting them together yields little insight into actual performance as the buyers, margins, and competitive set are very different for each.
Sticking to my knowledge base, SaaS, I have come to appreciate over the years just how different the model is from enterprise software. SaaS is not sticking software into someone else's data center and charging a monthly fee. It is truly providing a service: an ongoing service that needs to constantly add value and evolve with customer needs. The successful SaaS innovators are focused on Customer Success and Lifetime Value, and much less on quarterly quotas and rock star sales people.
All this is to say, it's easier to buy SaaS revenue than grow it, and it's easier to tinker with re-naming existing revenue streams than it is to build them from scratch. Oracle's perpetual license business is shrinking, as is its hardware business, and there is tremendous pressure to report growing Cloud revenue.
Can Oracle transform itself into a successful "cloud" business over time? Maybe; it has scale and sticky Fortune 100 customers on its side. But it will not be a smooth transition. The skills and mentality to be successful in a SaaS business have not traditionally been present at Oracle. It's also less than a 10th of the way along the path; the most likely time for a "false positive".
Computer and Internet Aficionado, CRM and Customer Service Expert
8 年I know people can change their minds, but ol Larry should be eating at least one of his shoes right now. Here he is 8 years ago talking about cloud computing. https://www.youtube.com/watch?v=0FacYAI6DY0 I don't think Larry is a great Oracle. LOL! Pun intended.....
VP Business Development and IT pragmatist
8 年But will it upgrade?
Senior Sales Account Manager @ SoftwareOne | Full Stack | All Stack
8 年I don't think cannibalising is the right word, it's more of a mutual beneficial relationship. Converting on premise customers to cloud is a massive win, both for the customer and the provider. The benefits of not having to patch, maintain and refurb hardware for the customer are well documented. The benefits of making your customers sticky while providing them with the latest and greatest versions of your software is great business. It's not a transition Paul, it's evolution. History is written by the victors, If Oracle wants to lump IAAS, PAAS and SAAS into one giant bucket and call it "Cloud" they're fully entitled to do so.
Profesor de Catedra Tec de Monterrey
8 年Tony a lot of Oracle SaaS software were acquired (Taleo, all Marketing Cloud (Responsys, Bluekai, Eloqua, Maximizer), Big Machines, etc, the only applications that Oracle build was Fusion, which based on that, yes, Oracle is buying a lot of installed base.
Cloud Architect Engineer at Google
8 年"Customer Centric"... the nature of all companys is to make profit....