As I’m sure many of you have read, on Friday, during his company’s annual shareholder’s meeting, Larry Ellison commented and questioned the over-hyped momentum surrounding cloud computing, its lack of a clear definition, and perhaps most importantly, its value as a business model.
Comments such as these remind me of similar comments made years ago by the former founder and CEO of Siebel, Tom Siebel, when he so brazenly stated that the ASP model and the concept of hosted software was not a viable business model. Ellison’s comments also speak eerily of comments by the likes of Marc Benioff over the years about the “end of software.”
Just like both of these industry heavyweights, Ellison is both right and wrong; right in the sense that the majority of businesses, and nearly all enterprises, still prefer to house, manage, and run their mission-critical applications themselves, wrong for underestimating the advantages that cloud computing brings to a business environment when the situation calls for it. On top of this, Ellison’s remarks are made all the more ironic given the recent investments that HP, now one of Oracle’s biggest partners, has made and intends to make in cloud computing.
As I’ve said a thousand times before, cloud computing, or for that matter any other deployment model, isn’t the end-all, be-all solution to business software. It’ll find its place amongst the others, and just like SaaS, open source, and previous deployment models, businesses will continue to learn how to drive value from cloud computing and providers how to profit from it.