Ellison's Anti-Cloud Computing Rant

Once again, in either complete self-unawareness or a calculated manipulation, Oracle comes out with a cynical statement. Ben Worthen reports that on the Oracle earnings call, Larry Ellison said the following:

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?

We’ll make cloud computing announcements. I’m not going to fight this thing. But I don’t understand what we would do differently in the light of cloud computing other than change the wording of some of our ads. That’s my view.

More than a couple of people that I respect, including Ben Worthen and Dan Farber, have written publicly or told me in person something to the effect of "you have to admit he has a point." 

Although, I agree that the term cloud computing has been hijacked by many vendors to become meaninless in some cases, that's missing the point of what Ellison is saying here. What he's saying, in no uncertain terms, is that other than using cloud computing in Oracle marketing, they are not going to change anything. You still think that makes sense?

To answer Larry's question, here are three things Oracle can do differently: 

1. Offer their middleware and database customers a pay-per-use pricing model on cloud environments such as EC2, Joyent, GoGrid and Flexiscale. Charge by the hour and only for cpu/hours actually used.
2. Offer all of their application software on a SaaS/on-demand subscription basis 
3. Develop products that are suitable for virtualized highly-distributed environments, and therefore, or are not highly dependent on centralized components such as their database. [UPDATE: adding some more specifics based on additional research]] Specifically:
   1. Enable Oracle RAC on EC2
   2. Enable WebLogic clustering (!), despite the fact there is no multicasting on EC2  
   3. Support Amazon AMIs (as opposed ot providing some AMIs with no support) 

Oracle won't do this. Why?

As I and others have already pointed out several times, Oracle is the company of status quo. Things are very good for Oracle the way they are exactly now -- any change is unwelcome. They make money by having high-paid aggressive sales people shove big stacks of software down customers throat, forcing them to buy this software with up-front, fully paid-up prepetual licenses. They then continue to make profit from these customers by selling them annual maintenance fees, most of which customers don't need or use, as Safra Catz herself admits.

Oracle does not share in any way in the customer's risk. If the customers ends up canceling the project. Too bad. It's now shelfware. If the customers ends up not needing to scale up as much, too bad. If the customer hits bad times or any other reason where the software is no longer needed -- too bad. Oracle has already pocketed its profit and it's off to sucker in the next guy.

So take Larry at his word when he says Oracle is not going to change anything but marketing.

Comments

[Michael Sheehan]

Once again, great post Geva!

I personally find it funny that many of the big names in the computer industry are 1) late to the game, 2) coming in with their sabers rattling and 3) trying to figure out how to be "different." I think it would be more productive for the larger corporations to listen a bit more and see how they can "help" with the movement. They should bring value to the table, and not try to disrupt or make remarks just for the sake of attracting attention, distracting from the common good.
Your 3 suggestions to Oracle are much more in line with "being helpful" and Oracle should listen carefully to those suggestions.

-Michael Sheehan
Technology Evangelist - GoGrid

[Chris Keene]

Larry's rant is an extraordinary example of whistling past the graveyard. Oracle's huge transformation over the last 10 years has been from an infrastructure company (databases & middleware) to an applications company (ERP, CRM, SFA ect). Now, just as this transformation is completed, along comes an infrastructure that will obsolete all the applications Oracle just got done rolling up. No wonder he sounds pissed - you would be too if you just spent >$20B on a bunch of wasting assets that are going to be shafted by the SaaS shift just as Siebel was eviscerated by SalesForce. The dead giveaway is that Larry focuses on SaaS profitability rather than SaaS market share - he knows the customers are deserting him in droves, what really angers him is that he can't make as much money in the SaaS world.