Oracle Introduces Corporate Cloud to Challenge Salesforce
By Aaron Ricadela
Bloomberg
un 6, 2012 3:51 PM CT
Oracle Corp. (ORCL), the world’s largest database maker, has introduced a cloud-computing service to let corporate customers access data over the Internet, stepping up competition with Salesforce.com Inc. (CRM) and Workday Inc.
The Oracle Cloud will include more than 100 applications, the Redwood City, California-based company said today. The service includes the Fusion business applications and online programs from acquired companies Taleo Corp. and RightNow Technologies Inc.
The debut vaults Oracle into the fast-growing market for software delivered online -- not stored on corporate servers --which saves customers money on hardware and speeds product updates. Expanding in the $113.8 billion business-applications market could help reduce Oracle’s reliance on hardware gained from from its $7.4 billion purchase of Sun Microsystems in 2010.
“This was a gigantic effort,” said Oracle Chief Executive Officer Larry Ellison at an event at the company’s headquarters, adding that the cloud service will include software developed in-house as well as from acquisitions. “Simply buying things wouldn’t have been enough.”
Oracle’s cloud service is a break from Ellison’s past, when he derided the concept as a new name for old technology. He said he had no choice but to adapt. “We started seven years ago this forced march into the cloud,” Ellison said.
‘Forced March’
Germany’s SAP AG (SAP) has been making acquisitions to expand in cloud computing, and Salesforce and Workday have based their businesses on it, winning deals against Oracle and SAP.
Moving its financial, human resources and sales applications online could boost use of Oracle software and services on tablet computers and other mobile devices, said Brent Thill, an analyst at UBS AG in San Francisco.
“All their apps will run on tablets eventually,” said Thill. “Have they done that yet? I haven’t met too many people running Oracle on tablets.” The Public Cloud is also late to market, he said -- at an event last October, Oracle said it would be available within weeks.
Computer-systems makers such as International Business Machines Corp. and Hewlett-Packard Co. (HPQ) are also beginning to sell online processing power and software tools for developers.
Ellison has spent more than $40 billion on more than 70 acquisitions, adding programs that help large corporations manage human resources and operations.
Over the past two weeks, Oracle bought two companies --Vitrue Inc. and Collective Intellect Inc. -- that sell online software to analyze data from Facebook Inc. and Twitter Inc.’s Web sites to create marketing campaigns.
Oracle rose 3.1 percent to $27.53 at the close in New York. The stock has climbed 7.3 percent this year.
To contact the reporter on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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