Oracle CEO Larry Ellison talks like no one else is doing cloud right. Here's the reality on what SAP, Infor, and Microsoft have to offer.
Oracle unveiled its public cloud on Wednesday, and CEO Larry Ellison dished out plenty of criticisms of competitors in the process. Some were half-truths. In some cases, Ellison laid claim to "unique" strategies first articulated by competitors.
Let's compare Oracle's cloud app approach to what other enterprise app vendors are doing and what a few of those rivals are saying in response to Ellison.
Infor: You don't hear much about this company in cloud conversations, but Oracle alum Charles Phillips, now Infor's CEO, sounds every bit as confident as his former employer in this statement sent after InformationWeek asked for a reaction to Oracle's announcements:
"Infor applications are truly multi-tenant, but can also run on-premise or in a hybrid combination of both. Through Infor10 ION, our unique, lightweight middleware, users see the same application with single sign-on regardless of deployment model. Infor's cloud business is posting accelerated growth as customers upgrade directly into the cloud.”
Just as Oracle's "Project Fusion" started out as a services-oriented architecture rewrite, Infor's leading applications have been overhauled in recent years for services enablement. Infor also has new applications and newly-acquired applications from Lawson. Some, but not all, are cloud ready. Most are being hosted, application-service-provider-style, in public clouds.
Our impression after reporting on a recent Infor conference? The vast majority of Infor's revenue is still in on-premises applications--as is the case for rivals that also started out in on-premises software. As for the future? Infor sees great promise and is making big bets on the cloud.
Microsoft: Many elements of Oracle's approach are straight out of Microsoft's year-old Dynamics playbook. The same apps available in the cloud or on-premises? Check. Freedom to move apps into the cloud and then back on premises? Check. Freedom to run some apps in the cloud and some on premises? Check. Ability to defer cloud-based application upgrades for up to a year? Check.
Microsoft has been doing all this with Microsoft Dynamics CRM for months, and it has promised the same with Dynamics GP and Dynamics NAV ERP systems by the end of this year.
SAP: This company took the lion's share of Ellison's abuse on Wednesday, and it was the butt of his first Tweet: "Oracle's got 100+ enterprise applications live in the #cloud today, SAP's got nothin' but SuccessFactors until 2020."
SAP's comeback was this prepared statement:
"As usual, you can tell who Oracle is most worried about by the competitors they criticize most. In this case, Larry's crystal ball is cloudy. Building a profitable cloud business depends on scale. With 17 million users, SAP's SuccessFactors business has the largest user base of any cloud apps provider. Our cloud business unit is now more than 5,000 employees strong, and offers a complete ERP suite for the cloud today, along with a broad portfolio of loosely-coupled apps. With the addition of Ariba, we are moving even more aggressively in the cloud space, here and now. SAP's strategy offers customers a long-term roadmap of innovation without disruption. Oracle customers face a difficult upgrade challenge with Fusion, and we invite them to see who can provide the most business value for their investment."
SAP's strategy is to keep "the core," the ERP-centered SAP BusinessSuite, on premises (though it can be delivered in private clouds or hosted on public clouds, such as Amazon's). The company is moving into the cloud with SMB options and edge applications.
SuccessFactors apps are a big part, but not the only part, of the portfolio. SAP's Business ByDesign suite is multi-tenant, as is BusinessOne OnDemand, an ERP suite aimed at the lower end of the SMB market. Cloud-based edge apps now available include Sales OnDemand (sales force automation), Travel OnDemand (expense management), and a handful of other apps.
Ellison's knock actually twists around SAP's promise to back its BusinessSuite with upgrades and support through 2020. At SAP's recent Sapphire event, I asked co-CEO Jim Hagemann-Snabe about SAP's cloud strategy. The approach, he said, would be to move front-end interfaces onto mobile devices and, over time, move more and more apps that are closer to the core into the cloud. But he stuck with the message that the very center of the suite (which customers might define differently) would remain on-premises.
As for a pure-cloud alternative, Snabe said, "it's funny how Oracle is saying 'we are there in the cloud with Fusion, and it took us six years.' Our version of that is called Business ByDesign, and it has been in the market for a while and it has more than 1,000 customers."
The reality is that not all enterprise apps are equally appealing in the cloud. Where ERP is concerned, most big companies have this software already, and aren't eager to move to a new cloud option. Once they have it, they want to use it as long as possible (which is why companies running not-so-old Oracle apps on HP Itanium servers are so mad about Oracle dropping support for the platform.) Companies without ERP or with really old deployments are the best prospects for ERP in the cloud.
The larger and faster-growing cloud opportunity is in CRM, sales force automation, and edge applications like human capital management, talent management, asset management, and so on.
It's also true that the cloud apps that are proven and growing the fastest are the ones from pure-play cloud vendors such as Salesforce.com, Workday, NetSuite, and so on. (Workday was another big target of Ellison's barbs on Wednesday, but the company declined to comment for this story.)
Will Fusion end up as Oracle's biggest customer base in the cloud, or will it essentially buy its way into the cloud with Taleo, RightNow, and other acquisitions yet to come? At SAP, Business ByDesign has already been eclipsed by SuccessFactors and, once a pending deal is done, Ariba.
So Oracle now has its cloud, but where cloud-based apps are concerned, it's still in the same boat with Infor, Microsoft, SAP, and other vendors with roots and almost all revenue in on-premises apps. Oracle just has a few more boxes that have been officially checked.
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