Oracle CEO flip-flops; rethinks cloud computing
By siliconindia   |   Friday, 26 June 2009, 21:45 IST   |    2 Comments
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Oracle CEO flip-flops; rethinks cloud computing
Bangalore: Oracle Chief Executive Larry Ellison appears to be rethinking "cloud computing," saying his company was creeping into the space just nine months after he mocked this business model. Many software companies take the service of cloud computing, a broad term for a shift towards paying for technology on a subscription basis, storing information on large servers and accessing the data via the Internet. Last September 2008, Ellison told investors that cloud computing, along with other related trends, such as software as a service, were over-hyped and ill-defined buzzwords embraced by companies mainly to market products. He had described the trend as 'gibberish' and expressed skepticism as to whether companies could make a profit from cloud computing. He said that computer industry was almost as fashion-driven as the women's clothing industry. The comment of Ellison immediately provoked interest from analysts, one of whom asked if Oracle was now getting into cloud computing. Ellison admitted, the company was getting 'a little bit' into the space. According to the statement of Ellison, it seems that cloud computing will likely play an increasingly important role in corporate computing. Companies like Salesforce.com and Netsuite have begun offering software that they host on their own servers and which customers access via the Internet. Similarly, online retailer Amazon.com is allowing companies to pay for computing power on a per usage basis. Those products challenge incumbent software makers, many of which, like Oracle, have been testing the water with some online products. Oracle's chief executive viewed such companies as potential competition to his own software giant. In particular, he referenced Salesforce.com, the largest company that makes only on-demand software. "We think we can be very competitive against Salesforce.com. We had spotted a significant gap in the market for on-demand products that Salesforce.com didn't currently address. That's the market for software hosted and stored at a data center owned by a customer but operated by a software firm, such as Oracle," said Ellison. "We think this is the interesting model, and that's the model Salesforce.com doesn't offer," Ellison said. San Francisco-based Salesforce.com, whose CEO Marc Benioff is a former Oracle executive, has positioned its products as a cost-effective alternative to those of Oracle and other large software companies.

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