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 Salesforce.com 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.

Oracle + Sun = More SaaS Options (Especially for SMBs)?

As I discussed with my learned and respected industry colleague Frederic Paul of bMighty.com earlier today, Oracle's acquisition of Sun Microsystems could result in nifty new software as a service (SaaS) offerings for SMBs and larger enterprises as well. Here's how.

1. Oracle's Fusion Middleware platform is built entirely upon Java, for which Sun is the principal commercial shepherd. Java's a great solution for building and delivering new applications, SaaS-enabled and otherwise. Greater integration among Java, Fusion Middleware, and applications and databases could and should make SaaS-enabled solutions easier and faster to build and deliver.

2. Sun is fairly experienced at delivering SaaS and cloud computing solutions, especially to large customers and in concert with partners.

3. Both Sun and Oracle understand what larger companies want and need to make SaaS and cloud computing solutions "enterprise-ready." At the same time, each has had some success at packaging and delivering solutions for smaller enterprises, often scaled down from those enterprise solutions. And each has partners good at supporting SMBs.

3. Despite public pronouncements to the contrary, Oracle leadership understands that SaaS and cloud computing are going to be significant alternatives to traditional "bits on disks" and premises-based servers. (Oracle still holds a big stake in Salesforce.com, as I understand it.)

4. The combination of Java, Fusion Middleware, Oracle applications and databases, and Sun servers and services means that Oracle could offer a range of premises-based, SaaS, and cloud computing solutions through its significant partner ecosystem. Many of these solutions could be scaled down, integrated, and pre-configured into SMB-ready offerings, much as IBM does now with its "Express" portfolio. But the ability to deliver software and services AS services bodes well for Oracle plus Sun, and perhaps for users seeking alternatives to expensive and difficult-to-manage premises-based IT infrastructures.

As we analysts love to say, "stay tuned..."