Software giant Oracle released its new cloud platform this week during it’s massive 5-day conference in San Francisco. Also making the news is the sudden cancellation of one of the keynote speakers, Salesforce CEO (and former Oracle exec) Marc Benioff(pictured). His spot was filled by Oracle CEO Larry Ellison, whose own speech was filled with quips clearly directed at Salesforce. At one point referring to Salesforce as the “roach motel” of cloud computing – as in, you can check in, but can’t check out.
Though clearly caught off guard by the announcement, Benioff retaliated with his own impromptu conference set on the same day. Salesforce ($2 billion revenue) and Oracle ($15 billion revenue) are leaders in the cloud space and the events are a clear indication the competition is quickly heating up.
The Gartner Report(July 2011) surveyed 525 companies and found 70% planned to maintain or increase their usage of SaaS. “Respondents cited ease and speed of deployment and cost-effectiveness as the top two reasons for adoption.”
Worldwide software as a service (SaaS) revenue is on pace to reach $12.1 billion in 2011, a 20.7 percent increase from 2010 of $10 billion, according to Gartner, Inc.
Factors Driving Increase in SaaS Use
- Customer frustration with typical software buying cycle (license + support + upgrades)
- Cheaper, faster internet access and more mobile devices
- Increase in control over the vendor relationship (easier to cancel contract and change software packages)
- Fast deployment, reduced dependence on internal IT
- Simplified pricing models
But many companies are still resisting the move, and opting for software they can host on their own servers because it gives them full control over their proprietary data. This is neither better nor worse. It is something familiar vs. something that is not. Just as with most new technologies, business will wait until they have been sufficiently tested before moving to adopt.
“I’m all about the cloud computing notion. I look at my lifestyle, and I want access to information wherever I am. I am killing projects that don’t investigate SaaS first.” – Vivek Kundra, President Obama’s CIO (March 2009)
“Sorry, Larry, the cloud can’t be stopped.” – Marc Benioff