OPINION: Larry Ellison’s ‘cloud’ hate will hurt Oracle

If you’ve listened to Oracle Corp. CEO Larry Ellison speak in the last few months, you certainly won’t be shocked to hear the Sun Cloud service is now dead in the water.


The platform, which launched about a year ago, was similar in concept to Amazon’s EC2 — a public cloud built upon Sun’s open source software and aimed at SMBs looking to purchasing on-demand services.


Sun Cloud’s demise truly highlights Oracle’s disinterest in the public cloud model. It might also underscore just how much Ellison hates the word “cloud computing” itself.


“The fact that you attach your computer to the Internet does not fundamentally change the computing model,” Ellison said in response to an audience question at Wednesday’s Oracle-Sun launch event.


The only thing that’s changed is the word, Ellison argued, admitting that the term “cloud” actually drives him crazy. He pointed to long-running services such as Hotmail and Salesforce.com which have been around for much longer than the cloud name.


He also argued that Oracle has been in the “cloud” business for years, selling the database software and middleware that runs these public cloud services. With its Sun acquisition, the company will now sell hardware to these service providers as well.


Ellison seemed even more upset at the term “private cloud,” although he was quick to remind the audience that Oracle has sold much of the technology to run them.


“Data centres were feeling bad because they were not involved in cloud computing,” he said. “So they renamed their data centres and called them private clouds.”


Throughout this entire rant, I found myself nodding along and pretty much agreeing with everything Ellison had to say about cloud. He’s right about the idea of cloud computing being old news, he’s right about the stupidity of “private clouds,” and he’s even right about the “cloud” buzz word itself being lame.


But Ellison is missing one key point in all of this.


Whether or not you want to call it cloud computing, I think the future of enterprise IT will be a mix of off-premise hosted services and in-house virtualization. The industry is working toward hybrid data centre, one in which key company data can move to and from the cloud easily.


Of course, this will only be viable if enterprise IT shops trust service providers with their critical data. That’s the issue that Ellison has to address.


Ellison and company have to to stop worrying about the term “cloud computing” and start worrying about how to get companies to trust storing their data with you.


It will probably be another 10 years before enterprise IT shops truly embrace these hybrid data centres and feel at ease with letting their data travel to the cloud. No matter how long it takes though, this is the way enterprise IT is evolving.


Once this IT culture war is over, cloud services will be so completely intertwined with physical infrastructure that the two will be inseparable.


Whether the Sun Cloud platform stood a chance of being successful isn’t the point. The issue is that Oracle doesn’t care to find out.


One Oracle executive said the company has no interest being in the “rent-by-minute” computer business, and instead, will focus on providing component pieces that other companies can use to build out clouds.


To me, this means Oracle will be neglecting a big piece of tomorrow’s data centres. If I was running Oracle, I’d strive to be a leader in software-as-a-service offerings (Google Apps), platform-as-a-service offerings (Microsoft Azure), hardware infrastructure-as-a-service offerings (Amazon’s EC2), and infrastructure-as-a-service offerings.


Like Ellison said, the company already sells all the components it takes to run private and public clouds. Why not use this technology to really dominate enterprise computing?


Sun’s reputation is that of a company that had a lot of good ideas but couldn’t fully monetize. Sun Cloud was a promising idea that should have motivated Oracle to expand its cloud services.


It’s not too late, Larry! Sell both computing power and software on-demand.


Fully embrace the “cloud” and the sky’s the limit for Oracle’s place as the leader in enterprise IT.

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