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Larry Ellison - It’s Ludicrous that Cloud Computing is Taking Over the World

October 11, 2008

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Larry Ellison is opinionated. Make no mistake about that.

I guess he can with his 86 billion dollar market capitalization compared to Salesforce.com’s 4 billion dollar.

While the whole world may seem like it’s going towards cloud computing, on-demand software-as-a-service, and all it’s derivatives (PaaS, MaaS, etc.), Ellison is focusing on what he has now and what he does best.

I like his quote about Webvan. I used them once when I was living in the Bay Area, and it had it’s place for single guys who work overtime in a Silicon Valley dot com startup.

Just like expensive Enterprise grade commercial software with annual software license renewals… there definitely is a market for it, and his proof is in his sales. Maybe it’s just not for you?

Here is the partial article from Forbes.com

Ellison Shoots Hole In Cloud

The Oracle chief executive told shareholders at the company’s annual meeting Friday that the technology is a fad that doesn’t have a clear business model, despite the fact that Google, Microsoft and practically every other tech company is singing its praises.

“I think it’s ludicrous that cloud computing is taking over the world,” Ellison told about 100 shareholders who attended the meeting at the software maker’s headquarters. “We think it’s very hard to make money in this thing.”

Ellison said open source and software-as-a-service (SaaS) technologies were similarly hyped a few years ago, but neither have become multibillion-dollar industries. “There’s one profitable open source company: Red Hat” he said.

The biggest SaaS company is Salesforce.com, which has trailing 12-month revenues of $920 million and a $4 billion market capitalization (even after this past week’s stock market gyrations). But Salesforce.com is “barely profitable,” Ellison huffed. (The company had a net income of $18.4 million in fiscal 2008. Oracle, by contrast, had $5.5 billion for fiscal 2008.)

At the most, Ellison said, Oracle might lease space in the cloud–technology that lets companies and consumers store data on the Internet rather than in networks of computers–but that’s it. “I’m not going to build the cloud,” Ellison said. “It’s the Webvan of computing.”

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Written by Jimson Lee · Filed Under CRM Helpdesk News, Enterprise On-Demand, Technology & Security 

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