Ellison does a fine rant on how much better and open Oracle's cloud services are over Amazon Web Services. There's only one little problem: Oracle is, at best, a second-tier cloud player.
Legacy databases? Sure, Oracle is the top dog. The cloud? Not so much.
According to Synergy Research Group, when it comes to the cloud market share and revenue growth, AWS remains in a league of its own. It's almost three times the size of its nearest competitor, Microsoft Azure, and Google Cloud has substantially higher growth rates, while IBM continues to hang in the top four thanks to its leadership in the hosted private cloud segment.
Oracle? It's lost in the noise of the next 20 companies down the list.
Oracle argues in its first quarter 2017 earning report that its Software as a Service (SaaS) and Platform as a Service (PaaS) GAAP revenues were up 77 percent year over year. Oracle CEO Mark Hurd said company is on track to make more than $2 billion in SaaS and PaaS revenue. By Hurd's count this would also be the second year in a row that Oracle sold more SaaS and PaaS than its cloud competition.
Funny, Oracle still missed market expectations. To be exact, Oracle came in $100 million short of analyst expectations, and its 55 cents per share earning were 3 cents short. Why, if Oracle has become such a cloud power, did it miss its numbers?
Easy. It's because Oracle hasn't really become a cloud power.
The company is just cloud-washing its services. In cloud washing, businesses take their same old products, then clean them up with cloud marketing buzz terms, and declare them to be new, cloud-based services. Oracle's cloud revenue doesn't represent new business. All Oracle is really doing is forcing its legacy customers into buying old Oracle software in new Oracle cloud bottles.
This comes easily to Oracle since Oracle has also been fuzzy about what the cloud really is. For example, in a recent Oracle conversation, I was told Oracle has been doing SaaS for a decade and that it is the only vendor doing hybrid clouds.
Really? Let me quote Larry Ellison from 2008: "The interesting thing about cloud computing is that we've redefined cloud computing to include everything that we already do. I can't think of anything that isn't cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women's fashion. Maybe I'm an idiot, but I have no idea what anyone is talking about. What is it? It's complete gibberish. It's insane. When is this idiocy going to stop?"
No time soon since Ellison has now adopted this fashion.
Having embraced the "idiocy", Ellison predicts Oracle, and not Salesforce, will be the first company "to be the first SaaS company to surpass $10 billion in revenue".
Let's say Oracle does make that much. So what? Ten billion bucks, as financial journalist Dana Blankenhorn points out, "even $10 billion is barely 25 percent of Oracle's total revenue. The rest of it comes from proprietary databases, hardware, and services that are increasingly obsolete."
As for Oracle being the first hybrid cloud company, 15 other companies, including Amazon Microsoft, and VMware would beg to disagree.
If Oracle wants to be a cloud power, the company needs to invest even more in its datacenters and innovate with its offerings rather than just migrate them. They'd better hurry. No matter what Oracle may say, it's not just AWS they need to catch up with. Google, Microsoft, and even IBM are also well ahead of the database giant.