Posted by: Shayna Garlick
Managing an Oracle shop, Oracle database administration, Oracle development
But now, another question is emerging, this time about an industry that has already been publicly denounced by Oracle head Larry Ellison and predicted to “collapse” by Lawson Software CEO Harry Debes.
Maybe Ellison and Debes should take a closer look — could our current economic state actually be beneficial to big-business software-as-a-service (SaaS)?
That’s what some experts are predicting. While the down economy may make businesses reluctant to commit to SaaS in the short term, the recession will probably be good for SaaS (especially for the larger, publicly-owned software vendors) in the long term, according to this Mercury News article, Economic crisis both a threat and an opportunity to SaaS.
The article also foresees a possible SaaS “shakeout,” where the smaller, sub-$20 million revenue companies will have a hard time surviving, and the big names like NetSuite and Salesforce.com will come out on top.
How does Oracle fit into all this?
Just because it doesn’t have a clear-cut SaaS strategy and doesn’t focus on SaaS like NetSuite or Salesforce, doesn’t mean it’s not a player in the market.
First of all, Ellison owns a majority stake in NetSuite. Second of all, the software giant itself can pose a threat to even the top SaaS companies. In today’s Information Week article, Salesforce CEO Benioff Sinks Teeth Into Non-SaaS Rivals, Salesforce.com CEO Marc Benioff says that out of his company’s big application rivals (SAP, Oracle and Microsoft), he thinks Oracle will pose the biggest threat as a SaaS provider.
“‘When you see [Larry Ellison] coming out so strongly against cloud computing, you know he’s worried,’ Benioff said, noting that Ellison is a student of Sun Tzu’s The Art of War — when weak, feign strength,” according to the Information Week article. “It’s also worth noting that Ellison, Benioff’s former boss at Oracle, owns a chunk of Salesforce, so Benioff isn’t so quick to slag off his former master as he is to diss Microsoft and SAP,” the article continued.
Oracle may be seen as a threat, but is what they offer really SaaS? According to Information Week‘s Mary Hayes Weier, “sort of.” It’s a tough question, because, as Weier points out, the definition of software-as-a-service remains somewhat ambiguous.
It seems as though Oracle wants to be a player in the SaaS market, but not at the expense of having to change its profitable structure — which includes license and maintenance fees. As Weier puts it, Oracle has no plans to “mess with the cash cow,” and wants to stay in the software business, being the “go-to infrastructure vendor for software companies providing SaaS to their customers.”
SaaS has recently been an area of innovation for many smaller companies, but in this economy, it looks like Oracle — which has laid rather low in the industry thus far — and the other big names might still come out on top.