Oracle CEO Hurd Stays Ellison's Course - InformationWeek

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9/30/2014
09:36 AM
Doug Henschen
Doug Henschen
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Oracle CEO Hurd Stays Ellison's Course

Oracle flexes its muscle with a wave of SaaS releases and high-profile customer interviews. But is it leading or following in the cloud?

No vendor is bigger, broader, or better than Oracle. That's the message Oracle CEO Mark Hurd sent at Oracle OpenWorld on Monday as he rattled off impressive numbers, chatted with big customers, talked up the company's size and scope, and declared the company to be on track.

"We feel great about our strategy, we feel great about our product portfolio, we feel great about our position in the market, and we have one focus, and that's winning," Hurd said, dismissing a suggestion that the company's direction might change now that he and Safra Catz have taken over the CEO role from Larry Ellison.

By the numbers, Oracle has announced 173 new SaaS applications this year, including 32 in vertical industries, 29 in marketing, 20 in supply chain, 16 in human capacity management (HCM) cloud, and 14 in enterprise resource planning (ERP). There's an all-new Analytics Cloud offering that will bring reporting and real-time analysis to the HCM, ERP, and customer-experience clouds. Oracle now claims 62 million users and 23 billion transactions per day in the cloud. It recently added two new cloud data centers in Germany (SAP's home turf), bringing its global total to 19 in eight countries.

[Want more on Oracle OpenWorld 2014? Read Oracle CTO Ellison Claims Cloud Supremacy.]

Hurd chatted onstage with innovative CIOs hailing from giant companies including Walgreens, GE, Procter & Gamble, Xerox, and Intel. "The common thread is that they're all big companies, they have big legacy environments, and they need to innovate and transform by moving to the cloud," said Hurd. "They know Oracle is a serious partner who can help them do just that."

What Hurd didn't mention, but more than one CIO let slip out, is that they're also working with Oracle's rivals. GE, for example, uses Salesforce.com apps and has invested more than $100 million in big data and cloud infrastructure rival Pivotal. Walgreens, Procter & Gamble, Xerox, and Intel also work with Salesforce.com.

Oracle CEO Mark Hurd.
Oracle CEO Mark Hurd.

What's more, on closer inspection, some of this week's cloud announcements could be interpreted as catch-up moves. In the public sector and educational market, for example, Oracle announced new cloud-based grants-management and accounting features of the kind rival Workday announced back in 2012. In the customer experience arena, Oracle announced a Data-as-a-Service for Sales offering that sounds strikingly similar to the Data.com service based on Salesforce.com's 2010 acquisition of Jigsaw. In enterprise performance management (EPM), cloud-based vendors like Adaptive Insights and Host Analytics have been poaching Oracle Hyperion customers for years (and SAP, too, has stepped up with cloud offerings), yet 2014 marked Oracle's launch of its EPM cloud.

Is Oracle simply responding to rivals like Salesforce.com, Workday, and SAP in established cloud markets, or are there areas of the cloud where Oracle is innovating on its own? InformationWeek put that question to Hurd during a

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Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio
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D. Henschen
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D. Henschen,
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9/30/2014 | 1:40:58 PM
I wouldn't say "Suddenly"
I wouldn't say suddenly. Oracle has been building up its cloud-data-center capacity for years and it now has 19 data centers in 8 countries around the globe. In some cases these are run by third-party contractors that have been in the business for years. It' not AWS-scale, as yet, but it's big.
Lorna Garey
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Lorna Garey,
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9/30/2014 | 1:14:31 PM
Re: Margins
Running cloud-scale data centers is suddenly a core competence? 
D. Henschen
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D. Henschen,
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9/30/2014 | 1:11:48 PM
Re: Margins
In Oracle's analysis it will make more money because it's being paid not only for the app but also for providing the cloud services -- all the hardware, admin, maintenance and people behind the service. It's a safe bet it will be lower margin, but Oracle says its gaining service revenue and app subscription revenue (bundled together in the subscription) as it looses license revenue alone.
Lorna Garey
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Lorna Garey,
User Rank: Author
9/30/2014 | 12:17:48 PM
Margins
Doug, Oracle is known for making much of its revenue from ongoing licensing and maintenance, in addition to the upfront cost of the software. I don't see how it can maintain that sort of margin in the cloud. So, a customer dropping one of its legacy on-prem systems for the cloud alternative, as opposed to re-upping, equals a net loss, right? How will the Street react? 
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