Ellison's 'What, me worry?' moment on cloud computing

Oracle has bet the bank on consolidation of old-world IT assets, but the long-term trend is away from on-premise applications and toward software as a service.

I really like this post by WaveMaker CEO Christopher Keene, deconstructing Larry Ellison's aversion to cloud computing .

Larry's rant is an extraordinary example of whistling past the graveyard. Oracle's huge transformation over the last 10 years has been from an infrastructure company (databases & middleware) to an applications company (ERP, CRM, SFA, etc.). Now, just as this transformation is completed, along comes an infrastructure that will obsolete all the applications Oracle just got done rolling up....

No wonder he sounds ticked--you would be too if you just spent more than $30B...on a bunch of wasting assets that are going to be shafted by the Cloud/SaaS shift just as Siebel's market share was eviscerated by Salesforce.

Larry Ellison is a smart guy, and Oracle is a hyperaggressive company capable of beating most companies on the market. While Keene's macro view is probably spot-on, I suspect that Oracle isn't going to turn into Computer Associates overnight and start an inevitable decline.

No, Oracle has single-handedly assured its long-term appeal by consolidating the market around its database technology with that same $30 billion in acquisitions. It's not necessarily good for customers that are locked into Oracle to an increasing degree, so much so that they can offer but token resistance to Oracle's pricing power , but it's good for Oracle's profitability.

Still, I think there's something to software as a service. Will it change the world overnight? No, it has already failed to do that. But it's a long-term threat to an old-school way of delivering software, one enabled by the Web and ever-improving bandwidth. Ellison is safe today, but tomorrow? That's another chapter.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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