Oracle is one of the most interesting companies in the industry, I think. Not only is it a tech giant and bellwether for the space overall, it’s innovative and it’s got one foot on each side of quite a few of the critical industry divides; cloud versus data center, open-source versus proprietary, software versus hardware. The company reported yesterday and came in pretty close to expectations, but I think there’s still a lot we can read from their results.
To start with, Europe didn’t drag Oracle down as much as some might have feared. Yes, software and cloud numbers there were a titch weak, but the weakness was truly minimal. What this says is that in the case of platform and application software, enterprises are still investing even with the Eurozone economy in tatters. That is very encouraging for tech overall, but more for software companies. My survey users suggest that software is the tech element most tied to productivity and thus the one most likely to be sustained even in bad times. Companies will try to make do in hardware, including networking. I think Oracle’s results prove that out.
The second thing I read out of the Oracle tea leaves is that this company really does see where computing is heading. Who besides Oracle makes a big thing out of PaaS on an earnings call? They talk about their platform services a lot, and blow a quick kiss at IaaS, which is the opposite stance most vendors take. I think that shows that Oracle realizes that the future of the cloud is PaaS, that a virtual computer with a cloud-ready set of application services will drive the evolution of IT.
Oracle also realizes that the first task this virtual computer will face is to straddle the public/private boundary to create hybrid distributability of applications and components. They made a specific point of talking about the fact that the same stuff that creates the Oracle Cloud is available to their enterprise customers as a software platform.
I think their hardware position is also very cloud-centric, though here I must admit that I’m drawing on nuances and not on direct comments. The database appliance model Oracle is driving is the perfect strategy for the cloud. Stick the database servers on premises, give both local and cloud-hosted apps access to them, and you dodge the whole problem of cloud security and price/performance for data storage. But of course you can also price DBaaS competitively as a cloud service too.
Is there anything disappointing about the quarter and the call? Sure, and if you know me you probably can guess what I don’t like. There’s not enough marketing aggression. Like IBM, Oracle seems to be allowing itself to become framed by its current accounts, hemmed in by tactical competition with the usual rivals. You don’t foment revolution by sitting down with the masses at a big conference table, dressed in a nice suit and drinking Avian water, and talking in well-formed sentences. You wrap yourself up in tattered rags, leap on the table, and orate. “Oracles” in history foretold the future, they didn’t bury you in tactical recommendations about dry issues of technology migration. That’s what Oracle the company has to do, and it’s not doing it yet. Thus, it’s still vulnerable in a big way to a competitor like IBM or HP or even Cisco who might be willing to man the barricades.