Oracle is hogging the tech press these days, making more headlines yesterday with a new 9-year deal with Salesforce.com . Nine years. Most marriages in Beverly Hills don’t last that long.
This comes only a day after Oracle announced a big deal to allow Microsoft’s Azure cloud platform to power many of its key products and applications.
Oracle announcing big partnerships with Microsoft and Salesforce.com, its two biggest rivals, is interesting stuff. What’s next, Vladimir Putin coming to dinner with Rush Limbaugh?
The tech pundits are all over the analysis. These deals are rife with conflict, of course. I think the biggest conflict is obvious: Oracle, Microsoft, and Salesforce.com are all software providers, and they all have competing interest in many products, most notable CRM (Salesforce.com) and databases and servers (Microsoft). But perhaps they have all realized it’s better to standardize platforms because the bigger threat comes from “out there” — a gazillion cloud offerings in every software market imaginable.
“Cloud” to me was always a specious differentiator because it has no meeting. “Cloud” is a method and a channel, not an application. It’s like saying you provide better cars because you lease cars rather than sell them.
Salesforce.com was very crafty in the CRM market, because it was very good at marketing and convinced the market that cloud was truly a differentiator. But is it really one? After all, software is software, regardless of how you access it, and the cloud advantage is disappearing as the legacy vendors alter their models to compete. Traditional “server-based” software vendors such as Oracle and Microsoft are migrating all of their software to the cloud anyway.
But the real question about all this — and the question that may be dogging investors with Oracle’s stock price — is how will Oracle manage all of these deals. Keep in mind that Oracle has nailed down a Salesforce.com deal and a Microsoft deal after billions of dollars in strategic acquisitions. Let’s just run down a few of them:
March 25, 2013: Tekelec, a telecom software provider, estimated $1B.
March 13, 2013: Nimbula, cloud services company, amount undisclosed.
February 4, 2012: Acme Packet, $2.1B.
Dec. 20, 2013: Eloqua, $810M.
Dec. 13, 2012: DataRaker, analytics platform, amount undisclosed.
Nov. 8, 2013: Instantis, cloud applications and services management, amount undisclosed.
Sept. 17, 2012: SelectMinds, social management applications, amount undisclosed.
May 23, 2013, Virtrue, social-marketing platform, estimate value $300M
February 2012: Taleo, “talent mangement softare,” $1.9B
October 24, 2011: RightNow Technologies, cloud CRM, $1.5B.
October 18, 2011 Endeca, business intelligence software, $1B.
Wow — and I skipped some of them. By my count, Oracle has acquired at least 15 companies in two years. And at least three of these were mutiple billions of dollars! This comes shortly after an entertaining article in the June 24, 2011 edition of Financial Times declared that “Oracle rules out M&A as too costly now.” Oops!
I believe that all of these deals will weigh on Oracle in the next 12-24 months. Not only does it have to integrate all of these products, but it’s going to have a huge challenge positioning them in its portfolio and explaining to people what its overall strategy is.
Okay, cloud, fine. But what’s the overall software strategy? The Salesforce.com presents the most immediate challenge, primarily because Oracle and Salesforce.com have been such dead-on competitors for CRM. And what’s it all mean for the Right Now acquisition?
Oracle’s got to clear this up relatively fast or it risks confusing and alienating its customers. Here’s an example of that confusion.
My guess? I think Oracle is just doing all this activity to burnish the perception that is the “leader” in the market. If it buys everybody and locks its major competitors — there’s only one place to go in the end to buy software.