Cloud computing has demanded a kinder, gentler Oracle

Oracle has always had a swagger that reflects the public persona of its bombastic leader, Larry Ellison, but over the last several years, as the company has transitioned to the cloud, it has required a transformation to one that is softer and more customer-centric.

Mind you, this was a company that was the poster child for vendor lock-in the 90s and early 2000s. They knew you were looking for the best-of-breed enterprise database and their sales team knew how to get you hooked on costly maintenance contracts that kept you paying long after the initial sale and filled the company coffers. The cloud may not have completely killed off that model, but it has forced Oracle to play by a very different set of rules.

Of course, that didn’t stop the marketing machine from cranking up at Oracle OpenWorld this week, or Ellison himself from taking a few swings at chief cloud rival AWS (or them swiping back). But if you listened carefully to the messages coming from Oracle execs, there was clearly a shift in emphasis, which all revolved around the customer.

Interestingly enough, the company has been using its own internal users as a test bed for some of its cloud products. The new AI tools that were announced this week began as in-house tools to create the company’s new line of AI-driven applications. Jack Berkowitz, who is vice president of products and data science at Oracle adaptive intelligence, says his department’s job is to test the tools for the company and create applications that “reduce the time to value for customers.”

“Instead of hiring data scientists and data engineers and deployment specialists and system integrators, we provide those pre built to reduce time to deployment to days or weeks,” Berkowitz explained.

Even if Berkowitz and in-house team are demanding bunch, and they very likely are, it’s still not the same dynamic that Oracle faces with a subscribing cloud customer. As Salesforce vice chairman and COO Keith Block, who was once an Oracle executive, puts it, the subscription model puts the customer in control and it takes more than simply delivering a cloud product to put the focus on the customer’s needs.

“In the other companies who are in the perpetual license world — they can sell a lot of software up front and charge maintenance for it and you don’t get a lot of innovation for that and the risk is really on the customer, whereas in our model it is a ‘joint success model’,” Block told TechCrunch in an interview last year.

Oracle was born and raised in that perpetual license world, and while it’s made the shift to cloud services from a strictly on-prem approach, understanding the nuances of the cloud-subscription relationship could take a bit longer to understand (if they ever truly do).

While the cloud business is growing quickly — revenue from SaaS was up 62 percent in the most recent earnings report last month — it’s easier to grow a big number when you have a small percentage of the market. The cloud business provided a healthy $1.47 billion for the quarter, but that figure represented only a fraction of the company’s 9.21 billion overall revenue.

Oracle five year stock price snap shot. Chart: Yahoo Finance

The main focus of the company has clearly shifted to the cloud, but that is only part of the journey. The other is an attitude shift. Amit Zavery, senior vice president for cloud platform and middleware products at Oracle seems to sense this. When he described new offerings like the AI development tools and a new blockchain service announced this week at Oracle OpenWorld, he spoke of customer choice and of giving them the tools and technologies they want to use in the way they want to use them.

That sounds very much like a company making the shift toward the customer, but after years of working in an entirely different way, it’s a hard transformation to make. The market has demanded a kinder, gentler Oracle and it is trying to deliver. It remains to be seen if it can succeed.

Featured Image: Getty Images

Published at Wed, 04 Oct 2017 16:16:06 +0000