Perhaps it's a Christmas miracle - Larry Ellison gave the OK to Cloud Computing!
Oracle CEO Larry Ellison seems to have changed his tune about Cloud Computing. Previously Ellison had not been overly enthused in public about the delivery model, despite investing in both Salesforce.com and NetSuite as a shareholder. But his concern when it came to Oracle's own offerings was that he couldn't apparently see how to make as much money out of Software as a Service as he could from on premise applications.
So out came typically full-blooded 'Ellison-isms': “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?” But he did add: “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.”
Still, in the light of Oracle seeing a drop off in its applications revenues as it reported its first (small) profit decline in three years, it was perhaps not surprising that Ellison turned his attention to the firm's On Demand offerings as one of the areas of growth to highlight to Wall Street analysts. “That business is now growing,” he said. “When we compete head-to-head with Salesforce.com we win more deals then we lose and that’s new in the last couple of quarters.
“This quarter was conspicuous for a series of competitive wins against Salesforce.com, one of which was our largest ever on demand or Cloud Computing, whatever you want to call it, competitive win over Salesforce.com,” he said. “It was actually a replacement of Salesforce.com. The customer will be de-installing Salesforce and replacing it with Oracle Sales On Demand so we’re very excited about that.”
This theme was picked up Oracle President Charles Phillips, who said: “In the applications area we’re doing very well in CRM On Demand and we’re certainly getting our traction now. What we think is happening is is the market is becoming more sophisticated as enterprises start to deploy and scale and they’re demanding enterprise integration scalability and security. We have strong customer adoption at Siemens, we had a 12,000-seat win and we’ll become the standard there.”
Oracle's net income for the second quarter declined 1% year on year to $1.3 billion, while overall revenues were up 6% to $5.61 billion. For the quarter new software licence revenues were $1.6 billion, up 5% in constant currency, but applications new license revenues were $469 million, down 9% in constant currency.
As for those others firms who confused Ellison with their “gibberish”...Salesforce.com CEO Marc Benioff was amused by his former boss's apparent Pauline conversion. “I guess Cloud Computing is not so ridiculous after all,” he said. “Oracle basically told all of its customers it is ok to switch to on demand. What a great holiday gift from Oracle. Now it truly is the end of software.”