Oracle Ready to Fight for Their Share of the Cloud
In the world of commercial cloud services, there’s no doubt that Amazon’s AWS and Microsoft’s Azure are dominating the market. According to estimates from Deutsche Bank, Amazon’s AWS generates revenue of around $6 billion per year, with Microsoft trailing by one or two billion. Other industry insiders report similar figures.
Compare this to Oracle, a company where similar cloud offerings are responsible for revenue in the millions. Despite being so far behind, Oracle wants a bigger share of the cloud market, and CEO Mark Hurd has come out with fighting words. In a recent interview featured on USA Today, there were some choice sound bites that showed Oracle’s current feistiness. “They can say what they want, but our strategy and momentum are irrefutable. We are the fastest growing cloud company at scale.”
Although Oracle hasn’t made a huge impact with cloud services, their position as an important player in IT is undeniable. Throughout the past two decades, Oracle made the majority of their money through business software. Their model was simple – sell a software product at a premium, develop the software based on market feedback, and sell new licenses to continue the revenue stream. For businesses in the past, this was the status quo. Today, there are better solutions, and many of Orcale’s former clients are discovering them.
Software as a service (SaaS) allows for products that are more affordable, but that still deliver ongoing revenue for developers. Microsoft is one company that has moved almost completely towards SaaS, offering all of their core product suites, and even Microsoft Windows, as SaaS products. Microsoft and Amazon are continuously growing with SaaS products in the cloud, yet companies like HP, IBM, and Oracle, have all been struggling in recent years. Some tech observers even listed these companies amongst the ‘walking dead’ of the established IT mega corporations.
Oracle simply can’t afford to fail when it comes to the cloud. They’ve been on the back foot for too long now, and despite having an almost $200 billion market capitalization around the world, their revenue has been virtually stagnant for the past four years. With a number of recent acquisitions and growth in their NetSuite cloud business solution, Oracle thinks they can topple the market leaders.
Whether this is just bravado to remain relevant, or if Oracle will cause an upset in the relatively young cloud market, still remains to be seen.