What is Happening? — On June 6, Oracle CEO Larry Ellison announced as part of the company’s Executive Strategy Update that Oracle now has a comprehensive portfolio of enterprise business software development, delivery, and management offerings, available now either for the Cloud or for on-premises deployment.

Oracle began developing the Cloud business solutions seven years ago. Today they are live.

Saugatuck sees seven key aspects of the Oracle Cloud as follows:

  • A complete, end-to-end suite of 100+ apps, using modern tools like HTML5 for mobile client access
  • Socially-enabled tools for collaboration and analysis
  • Non-multitenant Clouds: “We keep your data separate and secure, not co-mingled"
  • Customer isolation: You get your own virtual machine
  • Deployment option: You can run your apps on-premise or in the Cloud
  • Extensible: You can extend any Cloud app or link it to on-premises apps
  • Everything is industry standard, service-oriented architecture

Following Larry Ellison’s presentation, Oracle President Mark Hurd added the trump note: Oracle Platinum Services promises customers 24/7 remote fault monitoring (with response time to any severity-1 issue of less than 5 minutes). In the event of a fault, Oracle also promises to restore the system or escalate the issue to product development within 15 minutes.
After years of downplaying the importance of the Cloud, Oracle wants to be known as a provider you can trust with a full line of Cloud (or on-premises) solutions with modern, standards-based architectural foundations.

Why is it Happening? In an era of Cloud-driven, boundary-free enterprise IT (“Boundary-free Enterprise: Empowered by the New Master Architecture”), Oracle’s enterprise software strategy has long appeared to be something of a laggard. While other master brands and new Cloud players evangelized the Cloud, Oracle continued to favor on-premises deployment and their own hosting solutions.

Consequently, Oracle has been at risk of being out-positioned in Cloud-based business software and DBMS by SAP and IBM among traditional software Master Brands, and was in danger of losing an increasing number of potential customers to them and to pure-play Cloud solution providers as well.

Saugatuck has never believed that Oracle was ignorant of the growing desire for, and use of, Cloud-based software and other IT for business. We have seen how Oracle has been re-architecting, developing and refining its core software and acquiring other Cloud solutions to provide a broad portfolio of business solutions. We have questioned in the past, however, the company’s commitment to the Cloud and have expressed concern that Oracle strategists and management were in danger of missing significant growth opportunities while other Master Brands were climbing aboard the Cloud train. For example, our position in 2010:

Saugatuck’s bottom line on Oracle as a Cloud Master Brand: There are no guarantees. Today, Oracle is positioned to become a true Master Brand in Cloud Computing, creating and leading markets, influencing IT procurement and use, and building strong ecosystems to further its reach and increase its revenues. By year-end 2014, we see no reason why this will not have happened – unless Oracle stops itself. (“Masters of the Cloud: Assessing Oracle Corp.”)

Saugatuck’s research has identified accelerating growth in adoption and use of Cloud business software (“2012 Cloud Business Solution Survey: Summary Data Report”). Two key factors that our research shows – and which support the go-to-Cloud moves by Oracle, Microsoft, SAP, IBM and other traditional software firms – are as follows:

At least half of enterprise executives worldwide expect their firms to prefer Cloud-based business management software over traditional on-premise solutions by YE 2014;

At least 40 percent of enterprise executives worldwide prefer to deploy traditional, enterprise-class business management applications as SaaS/Cloud, hosted, or hybridized Cloud+On-premises solutions.

No doubt, recent Oracle’s own recent customer research indicates similar preferences and an increasing expectation of Cloud-based, enterprise-class business software. Thus, the Oracle Cloud announcement was intended to underscore Oracle’s commitment to providing both on-premises and Cloud solutions aimed directly at its’ largely mainstream and conservative buyers, who are now ready to deploy business assets to the Cloud.

For an extended version of this Research Alert, visit Saugatuck Technology.

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