Cloud Strategy of Oracle: Working or Not?
Though Oracle considered cloud strategy as gibberish long before, it is now singing in a dissimilar tune. With a queue of acquisitions, this database giant Oracle is buying the cloud strategy in a positive manner. Decades ago, it had built the on-premises portfolio. In the same way, it is buying the presence within the cloud strategy. It is just to see whether the strategy is working properly with the new setting or not.
Unlimited Applications: As Oracle has taken Cloud seriously, there is another side of this story. The core application of Oracle is still being run by various applications like the E-business suite, Siebel, PeopleSoft, JD Edwards, etc. The Unlimited Applications have made a promise in the year 2006 to the Oracle customers. The commitment ensures that the customers will obtain continuous innovation with the present applications, besides delivering the cloud applications of next generations.
New Strategy Of Acquisitions: The giant company, Oracle will definitely not require the financial withdrawal for buying various companies according to its wish. Whenever any requirement arises, it can go ahead with large companies. Till date, the most popular hardware company acquired by Oracle is the Sun Microsystems.
The approach to the cloud by Oracle basically comes out of the requirement. The company now possesses SaaS, PaaS, and LaaS operating system of the cloud just similar to the Microsoft. The inorganic strategy of cloud appears quite well with the financial growth of the company.
Cloud Growth: The growth of the cloud strategy is gradually accumulating momentum through Oracle. In the last quarter, the revenue of the cloud strategy of Oracle faced around 40 % growth. According to the reports, 8% of the entire revenue of the company comes from the cloud itself. Though the company is spending a huge amount for growing, the strategy appears to be working successfully.
Gains For Long Term: Oracle is one of the traditional software companies which can perform the restructuring activities of business models for the companies who are selling on-premise software with the models of cloud subscription.
Though Oracle is facing a revenue decline in the hardware/software business, it is gearing up with the long term gains with the cloud. According to the news reports of last year, it will take minimum five years of time to offset the losses faced by the software business. If the cloud strategy clicks well, the gains can be earned sooner than this period. As the hardware business of the company is playing a very negligible role, the software business is trying to get stabilized.
Real Money In Application Development: For the huge player like Oracle, the real money actually lies in the application development. The cloud platforms can fully be utilized for developing several applications. The IaaS contributions simply ensure that the whole stack is owned by the company starting from the cloud infrastructure to the applications. For distinguishing itself from the other players, it can also take care of the industry verticals.
Co-existence In The Real World: Oracle is maintaining the strategy of co-existence where all its customers can implement the fusion modules at their own convenience. The platform of fusion easily helps in integrating with the existing systems. The capacities of the core applications and the product lines may allow the companies for modernizing their investments with the help of the applications.
The cloud strategy of Oracle with the leveraging activities of the cloud acquisitions is definitely working well. The software license of the business also appears to stabilize. For the long term gains, Oracle is properly geared up with the cloud strategy. Therefore, the strategy is working, though the cash cow remains in the on-premise world with only 8% of revenue.