Salesforce.com’s EMEA chairman Steve Garnett has reignited his firm’s war of words with rival Oracle, telling CBR that Larry Ellison’s cloud vision is nothing more than outsourcing and recent acquisitions show a lack of faith in its existing portfolio.
Garnett was speaking to CBR at salesforce.com’s Cloudforce event in London, where he also suggested rivals such as Oracle and SAP will have to totally revamp their strategies if they want to continue to be successful in today’s cloud-focused enterprise.
After years of shunning cloud computing and being slow to react to the shift, Oracle and SAP have recently been making a big play in that space. Oracle acquired hosted CRM player RightNow Technologies and talent management firm Taleo in the last few months while SAP spent $3.4bn on SuccessFactors and $4.3bn on Ariba.
However Garnett told CBR these deals do not reflect well on existing technologies at these firms.
"It was only a few years ago Larry Ellison was calling cloud computing "water vapour" and saying that Fusion was the solution to everything and then they go and buy RightNow and Taleo. That says a lot about their belief in Fusion. SAP said they had it all cracked and then they went out about bought SuccessFactors," he said.
"If Oracle is going heavy in cloud does that mean they’re going to get rid of Fusion? I don’t think so," he added. "They spent five years building it. Are they going to throw it away? If it means they are going to say ‘you can run our Fusion stuff in your cloud’, that’s not cloud computing; that’s outsourcing."
The issue here however is there is no universally agreed definition of what cloud computing is or is not. Oracle and salesforce.com got into a similar spat a few years ago, when Oracle launched Exalogic Elastic Cloud, prompting the response from salesforce.com CEO Marc Benioff that, "clouds don’t come in a box."
Garnett told CBR that while there is no clear definition of cloud, some vendors are simply jumping on the bandwagon while not offering true cloud computing. He described it as "agile marketing by hardware and software vendors. A year or two ago most of them were anti cloud, then they realised the success that the likes of us were having and now they’re all cloud computing companies."
"If you’re buying hardware, it’s not cloud computing. If you’re buying software, it’s not cloud computing. I don’t understand all this hype about private clouds or someone saying ‘I’ll run your cloud for you’. That’s outsourcing. We’ve had that for 30 years. To really get the advantages of cloud computing you have to run a multi-tenant architecture," he added.
Moreover, Garnett claims it is salesforce.com’s idea of cloud computing that customers are keen on. This move to a more agile computing environment is difficult for older, more traditional software vendors to adapt to, Garnett believes. That is particularly evident when it comes to pricing models.
"They want agility; they don’t buy hardware or software with us and if they add users they pay a little more and if they take users off they pay a little less," he said. "You try saying that to SAP or Oracle or any of these guys. They’d say ‘get out of here’."
Garnett added: "The traditional software vendors still work buy selling a licence and booking that revenue straight away and spending it. We don’t work that way. It’s a very different pricing model which pressures their margins. They don’t like it and it isn’t good for them. It’s also a completely different architecture which means they cannot keep selling their old stuff."
But it is not just the pricing that will cause headaches for the traditional on-premise software vendors. The way they have architected their systems does not sit well with the way most organisations want to work these days, Garnett said.
"Nobody builds on-premise software anymore; you’d be mad to do that if you started a company today. All the innovation is in the cloud. What the consumer web – Amazon, Google, Yahoo, Facebook – has taught us is that it has to be multi-tenant, they built it like that because the expected millions of users," he said. "The software vendors, Oracle, Microsoft, SAP, didn’t do that; they built copies you installed on your computer. That’s not tenable in this world."
"The idea that you get a major release of software every four, five or six years is ridiculous; you have to be putting out major releases two or three times a year to be competitive in this fast-moving age," Garnett concluded.
