Things All Cloudy: Oracle Takes The Inevitable Plunge
The past week has witnessed Oracle making good on a pledge to adapt the (otherwise inevitable) shift towards cloud computing. The announcementcomes in an altogether different fashion, studded with overwhelming hardware and software resources, a fair mix of misdirection and a whole lot of competitor-bashing. Be reminded that the now embraced cloud computing model was once referred to as complete gibberish by Oracle CEO Larry Ellison. Well, as they say, it’s better late than never!
A collection of online cloud-based offerings, termed by the company as Oracle Public Cloud, have been surgically custom-designed to help safeguard Oracle’s territory against both old and new competitors, deploying web-based technologies to secure more customers. Oracle’s cloud suite has been described by Mr. Ellison as an outcome of approximately seven years of painstaking development.
Developing the particular cloud-based product line-up relies heavily on a design philosophy better known as “fusion” within the Oracle ecosystem, explained Mr. Ellison. The application set is a vivid indication of the engineering dexterity of a company better recognized for purchasing rather than building novel technologies. Mr. Ellison elaborated that Oracle had fundamentally needed to entirely recompose its software programs in order to make an equivalent online deployment possible. This is an “enormous effort” indeed, requiring the expertise of numerous engineers, as well as a hefty monetary investment. Contrary to the popular Oracle-attributed stereotype, “Simply buying things wouldn’t have been enough,” Mr. Ellison emphasized.
To spice up its offerings in cloud technology, Oracle has relied on acquisitions in the past, including RightNow Technologies and Taleo Corp (for about $ 3.4 billion combined). Oracle is set to purchase Collective Intellect Inc., which keeps track of and analyzes customer response on social media channels.
Oracle’s announcement is said to have been prompted by their long-time rival SAP’s move towards embracing the cloud. SAP brought its own cloud service to the table last month, providing as many as twenty-four online apps. Mr. Ellison, who is known for verbal attacks on competitors, pointed out that SAP does not possess a wide-ranging set of online products and is unlikely to do so until the end of this decade. “As usual, you can tell who Oracle is most worried about by the competitors they criticize most,” an SAP correspondent retorted.
Oracle aspires to reaching the $1 billion milestone in returns this year. Safra Catz, Oracle’s Chief Financial Officer, lately enlightened analysts by stating that Oracle’s cloud is going to be exceptionally profitable and also predicted that the operating margins for the cloud business will surpass 50 percent in the long-run.
The shift towards the cloud paradigm is bound to bring plenty of benefits for Oracle. Even if product sales and market acceptance fall slightly short of the seemingly overambitious targets, the returns will still be mounting on top of the company’s annual revenue of $37 billion and a market value of $ 137 billion.
By Humayun Shahid