Larry Ellison mocks IBM, SAP for being ‘nowhere in the cloud’

While cloud computing is “a new era of utility computing” – where reliable, always-on access will be as taken for granted as electricity – companies are still only slowly transitioning towards this new model, said Larry Ellison, Oracle founder, executive chairman and chief technology officer.

Speaking in his first of two keynotes at Oracle’s annual OpenWorld conference, Ellison said the shift to the cloud “has been going on for 15 years.”

It was clear the industry was still in the middle of this transition, because the biggest companies focusing purely on cloud offerings, such as salesforce.com, Workday and NetSuite, “are only $6 billion companies, they’re not $100 billion companies” yet.

Oracle entered the cloud space a decade ago after it realised it was going to have to rewrite the applications it had developed or acquired through a long series of acquisitions, said Ellison.

“It was hard work,” he said, noting the process was still not complete.

Infrastructure

The company soon realised rewriting applications alone would not be enough – it would also have to rewrite its middleware and database products for the cloud, and eventually, create a cloud platform and offer infrastructure and services, Ellison said.

“That’s how we got to where we are today.”

He added: “Everything has changed, and almost all of our competitors have changed.”

He said Oracle’s main competitors in the cloud area were Workday and Salesforce, while Microsoft is the only one of Oracle’s traditional competitors “who competes in all three layers” of cloud offerings: software, platform and infrastructure as a service.

Hitting out at two of his favourite targets with typical keynote bombast, Ellison claimed: “Two companies we have watched most closely over the last two decades are IBM and SAP, and we no longer pay any attention to them.”

IBM “were the greatest company in the history of companies, but they are nowhere in the cloud. SAP was the largest company in applications, but they are nowhere in the cloud,” said Ellison.

Increased revenue

However, SAP said in an earnings report last week that its cloud and software revenue were up 11 per cent, although operating profit overall would remain flat. In its own earnings report last week, IBM said cloud revenue was up 45 per cent (65 per cent if adjusted for currency and divestments), but it also gave a profit warning and revenue came in slightly below analyst estimates.

Ellison said that cost, reliability, performance, standards, compatibility, and security were the key elements of Oracle’s cloud offerings.

He particularly highlighted security as an issue, a subject he said would be the main focus of his second keynote on Tuesday.

“This is going to become a bigger and bigger risk as we move vast amounts of data into the cloud,” he said.

“People buy security features from Oracle and don’t turn them on. There should be no on-off switch on security, it should always be on”, and data should always be encrypted. He indicated that security needed to be at the silicon level, not within applications.

He said the company had worked to automate more functions, so that human error was eliminated when reconfiguring applications in the cloud.