If you can learn about a man by watching him speak for 85 minutes straight, then anyone who watched Larry Ellison’s recent interview at the Churchill Club knows the Oracle CEO better than they might ever have thought possible. They know his thoughts on the economy, they know about his lawsuit against Switzerland’s America’s Cup team, and they know about his plans to turn Oracle into T.J. Watson Jr.’s IBM (a theoretically possible goal due to the Sun acquisition – if only IBM did not already exist). More or less, the rationales behind all of these stances are understandable. Watchers also know Ellison’s thoughts on cloud computing, although they might not for their lives be able to believe he is serious when he discusses this subject.
The gist of Ellison’s cloud stance appears to be that because clouds run on servers, microprocessors, networking and software, Oracle will be just fine. After all, he suggests, “cloud” is just a fancy new marketing term to replace “Internet.” The problem with this viewpoint is that cloud computing is about far more than simply serving applications via the network. It is, at the least, about pay-per-use billing, process automation, on-demand provisioning of additional resources and increasing efficiency through multi-tenant architectures. Many believe cloud computing is about openness. If it does not increase flexibility and efficiency while decreasing extraneous costs, it is not cloud computing.
Oracle, in its current form, is not set up to succeed in a cloud-enabled world. The company is dinged regularly for its lock-in-inducing practices and does not seem anywhere near willing to charge customers by the drink for anything. Merely renting an ERP application does not cloud computing make. While its database, SOA, virtualization and application server software certainly could form the foundation of an internal cloud, they would need to be compatible with complementary solutions and they would have to be priced in a manner that does not destroy the business case for cloud computing. Yes, Oracle has the engineering chops to be a cloud player, but it will take a major business-model overhaul.
However, it probably is easy for Ellison to be so dismissive about cloud computing because he is about to have Sun’s entire suite of cloud components in his grasp. He can present this hardline, traditionalist façade while knowing all along that nobody really believes him. Selling enterprise systems a la IBM is a higher-profit-margin business than cloud computing, but cloud is the future of enterprise computing (even IBM sees this trend). Sun lays in Ellison’s lap a functional public cloud platform, as well as all the tools to build on-premise clouds, and Ellison is too savvy a businessman not to capitalize on this gift.