How the cloud could benefit Ellison and Oracle

While Larry Ellison didn’t say much about the cloud in his keynote for Oracle Openworld 2011, there was a lot implied.
Written by Jason Hiner, Editor in Chief

When we talk about the technologies that will power the future of business, the overwhelming amount of buzz in 2011 is focused around the cloud and its low-cost model of operation. Meanwhile, Oracle remains one of the world’s influential business tech vendors, despite the fact that it doesn’t have a whole lot of skin in the game when it comes to cloud computing.

In fact, when CEO Larry Ellison delivered his opening keynote for Oracle Openworld on Sunday night in San Francisco, you’d barely know that he was aware of this crazy cloud phenomenon. Unlike other enterprise tech companies, Ellison and Oracle haven’t tried to co-opt the term “cloud” and shoehorn it into their marketing strategy to the point that it’s barely recognizable.

However, there was an implicit message in Ellison’s presentation that had a lot to do with the cloud. It was as if Ellison was saying that no matter you’re running -- a private data center, the public cloud, or a private cloud -- Oracle is going to give you a bigger, faster engine to run all of the databases, middleware, and business intelligence that make it work. After all, the cloud is still powered by servers and data centers, and Ellison made the case on Sunday that Oracle's Exadata servers (above right) offer far better performance than comparable solutions from its rivals IBM and Hewlett-Packard, and at the same price or cheaper, according to Ellison.

Oracle has always been a background player in the tech industry, but it's one that makes big products and signs big contracts with many of the world's biggest businesses, organizations, and government agencies. Even though most of the current chatter in business tech is about the cloud, Oracle's momentum has continued. It will bring in over $35 billion in revenue in 2011 and Openworld 2011 will host a record 45,000 attendees, easily making it the largest business tech event on the planet.

Since Oracle is used to selling its gear to the largest organizations around the globe, the movement toward the cloud could actually help the company, which has never made heavy inroads to the small and medium business market. In the future, most SMBs will likely outsource the bulk of their IT services to service providers that deliver via the cloud, rather than running their own small servers in-house. As a result, Oracle won't have to go after small accounts in SMB market, it can simply sell its high-end gear to the proliferating number of service providers, who will then resell the solutions as services to their SMB customers. The one big catch could be open source. Most of the cloud providers are consolidating around open source solutions. Companies like Oracle and Microsoft would like to change that as the cloud market matures.

We will have more from Oracle Openworld 2011 throughout the week.

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This was originally published on TechRepublic.

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