Monday, May 4, 2009

Oracle's New SaaS Offerings: The Last Nail in the Coffin for "Bits on Disks?"

What a difference two weeks, 10 months, some acquisitions, and an economic downturn can make.

Two weeks ago, I opined in this space that Oracle's acquisition of Sun Microsystems could soon result in some new SaaS offerings. And last June, Larry Ellison was widely quoted as saying SaaS offerings weren't profitable enough -- although he was also widely reported as expecting that to change.

Well, it's changed, at least according to today's Oracle-related news stories. They seem to indicate that Oracle is planning to launch several (maybe seven?) new SaaS offerings really soon, according to stories in The Wall Street Journal (subscription required for full access), at VNUnet, and elsewhere. And I believe'em.

Since that June 2008 conference call with Larry Ellison, Oracle's launched a new release of its CRM On Demand solution, and Oracle Sourcing On Demand, a SaaS tool for supply management. And its Oracle On Demand Web site claims 4.5 million end users.

Oracle is serious about SaaS. And that means all the other SaaS and cloud computing solution vendors had better get ready for some aggressively serious competition. This should benefit users in terms of broadening choices and perhaps creating opportunities for advantageous contractual negotiations. But it is likely to get rough for those solution developers and providers without deep pockets, loyal, evangelical customers, or both. Such vendors are likely to be acquired by Oracle, acquired by some other larger and more stable vendor, or to disappear. Which won't be good for those users who've bet their companies' competitive agility on those vendors without sufficient protection, as I've discussed here previously.

Given Oracle's latest and anticipated SaaS moves, Microsoft's continually evolving SaaS/cloud strategy, and everything and its partners do, the next 12 to 18 months could be the most interesting and challenging for SaaS and cloud computing users and vendors since...well, since the last 12 to 18 months.

So, as I advised two weeks ago, stay tuned. And feel free to let me know your thoughts, hopes, fears, and plans in response to all of this, if any. And you might consider reducing or eliminating as many long-term commitments to and investments in traditional software licenses as practical for your organization's particular needs. While the future of SaaS and cloud computing is roiling, the future for most traditionally licensed "bits on disks" seems certain -- and limited at best.

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