Oracle released its fourth-quarter earnings last week, and some of the numbers weren’t pretty. Revenues from new software licenses and cloud-software subscriptions were up 1 percent, to $4.0 billion, while its hardware division continued to suffer. In a tech industry enjoying a period of hyper-growth, particularly with regard to the cloud (dare we call it a bubble?), Oracle’s numbers seemed positively anemic—and troubling to shareholders, who sent the stock plunging June 21.
But Oracle CEO Larry Ellison has a plan, one that could position his company as a more robust cloud vendor: at some point this week—perhaps as early as today—he could unveil alliances with Microsoft and Salesforce, two longtime rivals. “Next week we will be announcing partnerships with the largest and most important SAAS [Software-as-a-Service] companies in the cloud, and they will be committing to our 12C technology for years to come,” he told analysts and media on a conference call, according to AllThingsD.
Depending on the nature of the partnerships, it could represent quite a shift for Oracle, which has a reputation of pugnacious corporate individualism: this is a company that prefers drawing a (metaphorical) sword on other tech firms, rather than joining in combined efforts. Salesforce and Oracle have engaged in a long-running and often dramatic feud (one filled with lots and lots of priceless executive trash-talking), making news of a potential alliance all the more surprising.
Oracle’s 12c database technology (the “c” stands for “cloud”) is just one element of the company’s cloud portfolio, which includes a public cloud hosting a variety of database and developer tools. While its rivals have spent the past few years releasing a variety of cloud-based services, Oracle was famously reluctant to follow suit, choosing instead to focus on its legacy business of selling hardware and software in integrated stacks. If Oracle has changed its tune in recent quarters, it’s out of necessity: its rivals (such as Salesforce, Amazon, and Microsoft) are earning lots of market-share and money from their own cloud efforts. Had it failed to embrace the cloud, Oracle would have been left behind.
But is it a case of too little, too late? It’s not as if Oracle is doomed: if nothing else, its legacy businesses will ensure it lots of revenue for quite some time to come. But its relatively flat quarterly numbers—and flailing hardware business—hint at a need to change strategies. A set of strategic alliances with onetime rivals could help Oracle pivot more rapidly—even if it forces Oracle executives, so used to walking their road alone, to swallow a bit of pride.
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