Oracle Moves To Cloud, Takes Aim At Salesforce

Oracle Corp launched a new suite of cloud-based products to try to catch up with smaller but nimbler vendors, such as salesforce.com Inc, in the business of hosting and distributing software via the Internet.

The business software corporation, which gets most of its revenue by selling software that companies install in their own datacentres, included social monitoring and data mining services - both hot new areas of growth - in its cloud apps.

“It’s been a long time coming,” Chief Executive Larry Ellison told customers and analysts at Oracle’s headquarters in Redwood City, California. “We made a decision to rebuild all of our applications for the cloud almost seven years ago.”

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Ellison said the journey was fraught with difficulty and the company had to rely on acquisitions to get to this point. The project, previously called “Fusion,” was sometimes referred to as “Confusion,” he said.

“It was as difficult a thing as we have done at Oracle,” he said. “We couldn’t do it ourselves. We had to make the right acquisitions as well.”

Oracle and rivals, such as SAP AG, are transforming themselves into major players in cloud computing - providing software, storage and other services from remote datacentres over the Internet.

Ellison’s company has gone on the acquisition warpath to speed the transition.

In past months, it has secured deals to pick up Collective Intellect - which specialises in customer information gleaned off Facebook and Twitter - Vitrue, and recruitment software maker Taleo Corp. Salesforce bought Buddy Media this month, gaining expertise in social media marketing.

The company now generates about $1 billion in annual revenue from Web-based software, still only a third what Salesforce.com projects it will pull in during the current year. Oracle’s cloud products include 100 self-service applications and platform services, with subscription-based pricing.

The billionaire, one of Silicon Valley’s most well-known personalities, also took a dig at competitors - particularly arch rival SAP and San Francisco Bay Area-based startup Workday.

He called out Workday for its “fundamental” mistakes of not using a database and for basing its user interface on Adobe’s Flash, which doesn’t work on Apple Inc’s iPhones and iPads. “They have made some fundamental architectural decisions that are flat wrong and I think calamitous,” he said.

Ellison also said he noted that SAP doesn’t expect to have a cloud offering until 2020. “2020. A terrible year to get into the cloud,” Ellison said to laughs from the audience.