Larry Ellison Doesn't Get the Cloud: The Dumbest Idea of 2013 by Bob Evans, Senior Vice-President, Communications

Excerpts Reprinted from Forbes OracleVoice Channel 

I don’t know if you’ve heard, but the talk among the chattering classes is that neither Oracle, nor company founder and CEO Larry Ellison, gets the cloud.

Yes, I know, that seems preposterous—regardless of how fervently some competitors want to believe it and no matter how many ways the cognoscenti try to spin it.

Their bizarre theory goes something like this: Oracle’s cloud products aren’t all available yet, most of Oracle’s current revenue comes from non-cloud products, Ellison has criticized the term “cloud computing” in the past, and–here’s their killer argument–all of Oracle’s competitors (and especially the most vulnerable ones) insist that Oracle doesn’t get the cloud.

“Larry Ellison doesn’t get the cloud”: will it become the great lie of 2012 in the tech business? Will it be the foolish and permanent legacy of those who repeat it? Or will history–not to mention marketplace realities–somehow reveal that Ellison “doesn’t get” an industry segment he helped to create and in which he’s been immersed for 14 years?

Here’s an example. Let me share with you a few excerpts from a recent Mercurynews.com column under a headline that begins, “With Oracle Vulnerable,….” The columnist never comes close to proving that Oracle is indeed “vulnerable,” but like the atheist in the foxhole he covers all his bets at the end with this line: “Oracle as underdog? Probably not.” You see, the game is not to prove that Oracle is “vulnerable” or that Ellison truly doesn’t understand cloud computing; rather, the game is to generate a lot of traffic and scuttlebutt with a provocative–and by his own admission, dubious–headline.

That’s just something you might want to chew on as you ponder whether Larry Ellison really gets the cloud.

So let’s consider what we know, not only because that’s the right approach but also because I would contend that most of the previous attempts at answering the question, “Does Larry Ellison get the cloud?” were entirely devoid of even a token gesture at mulling over some basic facts, including these:

1. Oracle’s annual SaaS revenue is approaching $1 billion. That figure doesn’t include any cloud-related revenue other than SaaS. Seems like a pretty big number for a company that doesn’t get the cloud.
2. Oracle began developing its Fusion applications for use on-premise or in the cloud almost 8 years ago. Now, granted, the term “cloud computing” didn’t exist back in 2004, but in spite of that Oracle was writing Fusion apps that could be used on-premise or over the Internet via software as a service more than 7 years ago. Maybe that was just dumb luck. Or, maybe Larry Ellison was seeing the big cloud picture 7 years ago.
3. Oracle began developing its forthcoming database product, which will be optimized for the cloud, 5 years ago. It can be used on public clouds, private clouds, and hybrids. It has taken 5 years to complete because no other database in the world has such capabilities and Oracle wanted to get it completely right before its release. Maybe more dumb luck. Or, maybe Larry Ellison knows a thing or two about how cloud computing will benefit immeasurably from a cloud-optimized database.
4. Oracle is the only tech company on Earth that has a full product line at all levels of the cloud: Software as a Service, Platform as a Service, and Infrastructure as a Service. Oracle’s new Platform as a Service suite is completely integrated with its SaaS suite for optimal security, performance, time to value, and ease of use. And for Infrastructure as a Service, Oracle’s Exalogic Cloud Machine can run any manner of cloud configurations the customer wants: an Oracle Cloud owned, managed, and operated by Oracle within Oracle’s data centers; a private cloud that Oracle owns, manages, and operates within the customer’s data center; or some combination. “Some of the biggest and best-known companies in the world are turning to the Oracle Cloud, and many are picking us for all levels of the cloud stack,” Oracle senior vice-president Abhay Parasnis told a room full of financial analysts, industry analysts, and media. “All levels of the cloud stack”—is any other tech company playing across those spaces? The answer is no.
5. Oracle is the only provider of SaaS-based enterprise applications with social capabilities fully integrated into every app at the platform level. Oracle’s Social Relationship Management capabilities “bring social into everything” and can “light up our core LOB applications with social capabilities,” Parasnis said. No other cloud or SaaS company has attempted to do that—is that unique strategy a sign that Larry Ellison doesn’t get the cloud, or an indication that Oracle’s going to force all cloud vendors to try to deliver the huge customer value that social-everywhere represents?
6. Oracle’s long-term commitment to the cloud has allowed it to incorporate modern features, such as social, plus new and essential capabilities, such as BI tools that LOB heads are demanding as they gain greater control over IT budgets and decision-making. Oracle executive vice-president Thomas Kurian told the analysts, “Ten years ago, the new E-commerce function necessitated a transformation of core IT systems, and today, social is exactly the same” in how it triggers sweeping changes in business processes, information flows, and IT architecture. “We’ve seen this movement to SaaS/cloud over a very long time, and have adapted accordingly,” Kurian said. Once again, is that a sign that Oracle’s clueless about the cloud? Or that it’s in a very enviable position with regard to the hottest trend in enterprise computing today?

For more details about Oracle’s approach, please check out the full story about “Oracle Cloud: Social. Mobile. Complete.” 

On top of those facts mentioned above, here are some comments from Ellison himself, and perhaps they’ll help you judge whether he has a clue about the cloud.

In response to a question that began with the contention that until recently Oracle didn’t get the cloud, Ellison interrupted and said,“I founded the first cloud company—NetSuite—but I didn’t call it ‘cloud’ because nobody was using that term back then. I founded NetSuite, I own it—I’m not just an investor,” Ellison said, later adding that “I haven’t sold any of my [NetSuite] stock.”

“Then six months later Marc Benioff came to me and said, ‘If you’re gonna do accounting on the internet, I’d like to do salesforce-automation on the internet, and I supported him, and we did that—we just didn’t know at that time that it was going to be called ‘the cloud,’” Ellison said.

“What I objected to was when the recent and very charismatic term ‘cloud’ was retroactively applied to NetSuite and others—and what I ridiculed was this silly notion that everything is cloud.”

  Ellison also mentioned his idea of the Network Computer and his launch of a company by that name many years ago to tap into the nascent world of interconnected devices: “we just didn’t know it was the cloud,” he said.

“So this idea that I didn’t get or don’t get cloud computing is . . . interesting.”

As for “interesting,” there’s an old proverb that says, “May you live in interesting times.” And I think that for cloud-computing companies competing with Larry Ellison and Oracle, life is about to get much more interesting than they would have liked.

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