Cloud is being embraced strongly at Oracle. That is the message loud and clear from the company, which brought its CloudWorld to New York City on January 13. Oracle’s cloud strategy and its mission in development is very simple, said Thomas Kurian, president, Oracle Product Development. The idea is to bring Oracle’s business applications, technology, software, database, middleware,analytic tools and infrastructure “to any customer anywhere in the world through the internet browser so that you as a customer can use Oracle software, without having to operate Oracle software. And by doing that we are opening up the capability of Oracle to many, many more people around the world.”
During the event, which drew customers, analysts, and thought leaders, Oracle offered an overview of its cloud strategy and the progress the company has made thus far in addressing consumers and enterprise constituents in the cloud. The move to the cloud represents far more than simply taking a set of applications and consolidating them and more than just moving from Capex to Opex, said Shawn Price, senior vice president, Oracle Cloud. It is being driven by a number of factors, including a dramatic shift in consumer expectations as well as a new class of employees described as Millennials who expect information on any device at any time. “The infrastructure of the past in no way allows us to connect with the expectations of the consumers of today and the future,” he said.
Four pieces to the cloud solution
There are four pieces to Oracle’s cloud software solution - infrastructure as a service, platform as a service, software as a service, and then data as a service, said Kurian who explained and demonstrated various pieces of Oracle’s cloud portfolio. For example, said Kurian, the strategy for SaaS is very simple – to offer an integrated suite of software as a service applications consisting of best in class pieces across areas such as ERP, human capital management, customer experience and supply chain on a common data model with integrated processes integrated analytics all built into the system. The key differentiators of Oracle’s SaaS approach is that it is an integrated suite, the pieces are best in class, it scales from companies that are $50 million to $100 million in revenue all the way up to the Fortune 10, it can be implemented very quickly, and it is fully extensible and configurable using Oracle’s platform, said Kurian.
According to industry figures, cloud will represent a $128 billion market in the next few years, with 65% of that done in SaaS, 20% in IaaS, and 13% in PaaS, noted Price.
But there is a sticking point holding them back from the transformative advantages of the cloud. Citing another study, Price said, organizations’ top concerns with moving to the cloud are centered around mission-critical application performance, availability, and security and legal requirements. Customers want integrated suites, extensibility, they want to be able to use the same skill sets from behind the firewall in the cloud, and they want to be able to easily move units of work to the cloud.
Oracle's transformation to modern cloud vendor
The ongoing transformation is not simply for Oracle’s customers, it is occurring for Oracle as well, as it transforms to “a modern cloud company.” Oracle has invested 5.2 billion in R&D in the last year, currently has a portfolio of more than 600 cloud applications, with 135 introduced at the most recent Oracle OpenWorld, as well as thousands of packaged applications built by partners to further extend them.
Oracle’s cloud applications must be easy to extend, change and connect, said Price noting that extensibility is the key to future-proofing SaaS acquisitions. Price pointed to dunnhumby as an example of a customer that has been successful acquiring the full range of Oracle apps in the cloud and noted that Oracle Cloud now counts 75% of Fortune 100 companies as customers, has more than 62 million customers using its services daily, across more than 23 billion transactions. And, he said that 19 of the 20 top cloud providers run on Oracle.
Strong cloud momentum
Oracle’s cloud business is already going strong, said Price, who cited results from the second quarter of fiscal 2015. For 2015 Q2, Oracle reported cloud software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) revenue was up 45% to $516 million, while total Q2 new cloud bookings grew at a rate of more than 140%.
Looking at the forces of changes coming to bear, including changing consumer expectations and operating model changes, Price told the audience that “the infrastructure of the past can in no way work the way we work today nor accommodate this competitive and agile landscape." He noted Oracle’s “economic model is based on one thing – we need to innovate, we need you to go live, we need you to achieve value - because if you don’t, we don’t renew, we churn, and we don’t create advocacy. And so we are aligned in our aspirations and our objectives. We are rethinking our engagement model and we have programs that if you haven’t taken advantage of, you should really look at.” Citing Oracle’s Customer 2 Cloud program, Price said, as an example, that Oracle is willing to look at what customers own and help migrate their applications to the cloud. “It is not just engagement model, it is how do we migrate you to the cloud.”
New Oracle Financial Services Cloud
Further fueling its cloud amplification, Oracle today launched its Oracle Financial Services Cloud, to help facilitate the adoption of cloud technologies and address their specific needs related to IT security, privacy, compliance, and regulatory requirements. Part of the Oracle Industry Applications Cloud portfolio, Oracle Financial Services Cloud supports the unique requirements of financial services companies for human capital management, enterprise resource planning, and customer experience in the cloud.
Customers want an integrated suite
“Our core belief has been the following: because of all the technology transformations that are going on in the industry, whether it is the client profile shifting to mobile, whether there are new business processes that people want to roll out, people want to move their business processes and their infrastructure and technology software up to the cloud, and when they do that they want a platform that gives them an integrated suite of applications, an integrated and standards-based suite of technology, running on a world class infrastructure platform that gives them performance, availability, security,” said Kurian. “By doing that, we allow our customers to use our software to transform their business and improve their agility without having to learn how to operate our software. And what we have done is take all of the work that people do manually on our software - whether that is in applications or in technology, and automating it through software, it allows them to both get the benefits of getting features and capabilities more frequently - and at substantially lower cost.”