Industry News Desk
Oracle Takes to the Cloud
Oracle has spent upwards of $3.5 billion buying cloud companies
By: Maureen O'Gara
Jun. 8, 2012 08:00 AM
Oracle went indubitably cloud Wednesday when it hoisted a hundred-odd applications into the sky.
Larry Ellison, who emceed the announcement - and who's got to be every reporter's favorite CEO simply for the kind of copy he produces - said Oracle started on a "forced march" to the cloud seven years ago, leaving one to assume he previously belittled the hyped architecture as "complete gibberish" so Oracle could catch up.
The shift away from software that customers install internally - and the kind of support fees Oracle charges - could take a bite out of Oracle's precious revenues. A few years ago Ellison said the cloud was a hard way to make money.
The online offerings, a rewrite of practically everything Oracle owns to run on its own Oracle Public Cloud, are supposed to defend the company against SAP, Salesforce.com, Workday and Amazon. Ellison called it a "gigantic effort" that cost billions of dollars and was "as difficult a thing as anything we have ever done at Oracle."
The company was forced to go outside to get the job done although "simply buying things wouldn't have been enough," Ellison said.
Oracle has spent upwards of $3.5 billion buying cloud companies like RightNow Technologies for $1.5 billion and Taleo for $1.9 billion. Lately it's bought ClearTrial, Vitrue and Collective Intellect.
The widgetry, encompassing the company's Fusion apps, includes CRM and human-resources management delivered as a service as well as Oracle's signature database and a Chatter-like social networking service. Rival SAP announced its own cloud service last month and has put 24 apps online.
In his very first tweet, Ellison said, "Oracle's got 100+ enterprise applications live in the
Oracle has no intentions of being a niche player and claims to have "the most comprehensive cloud on planet earth." It expects to do $1 billion in cloud revenue from monthly (not hourly) subscription pricing this year, eventually returning margins of upwards of 50%.
Unlike the usual multi-tenant clouds, the Oracle Public Cloud is supposed to give users their own virtual machines and Amazon-like specification control and let them move between public and private clouds. Oracle will host the stuff on its own Exadata and ExaLogic machines for both the enterprise and developers.
Oracle's shares rose 3% on an otherwise buoyant day on Wall Street.
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