Oracle: To Change or Not to Change

Oracle: To Change or Not to Change

In some ways, Oracle?s self-congratulatory San Francisco shindig known as OpenWorld is as gripping as any Shakespearean tragedy. For all the buzz today about transformation, agility, and change, it?s hard to get a straight story out of Oracle about what they want to change ? if they really want to change at all.

First, there?s the odd shuffling of executives at the top, shifting company founder Larry Ellison into a dual role as Executive Chairman of the Board and CTO, a role that Ellison joked about: “I?m CTO now, I have to do my demos by myself. I used to have help, now it?s gone.? But on a more serious note, Oracle has been stressing that nothing will change at the big company.

Nothing will change? Why would you appoint new CEOs if you didn?t want anything to change? And isn?t the impact of the Cloud a disruptive force that is forcing Oracle to transform, like it or not? Perhaps they felt that claiming the exec shuffle was simply business as usual would calm down skittish shareholders and a skeptical Wall Street. But if I were betting money on Oracle stock, I?d be looking for them to change, not sticking their head in the sand and claiming that no change at all was preferable.

And what about their Cloud strategy, anyway? Ellison has been notoriously wishy-washy on the entire concept, but it?s clear that Cloud is perhaps Oracle?s biggest bet this year. However, ?while those products are growing quickly, they remain a small fraction of the company’s total business,? accounting for ?just 5 percent of his company’s revenue,? according to Reuters.

Thus Oracle finds itself in the same growth paradox that drove TIBCO out of the public stock market: only a small portion of the company is experiencing rapid growth, while the lion?s share is not. Of course, these slow-growth doldrums are par for the course for any established vendor; there?s nothing particularly unique about Oracle?s situation in that regard. But the fact still remains that Wall Street loves growth from tech vendors, and it doesn?t matter how fast Oracle grows its Cloud business, investors will still see a moribund incumbent.

The big questions facing Oracle moving forward, therefore, are how much of their traditional business should they reinvent, and will the Cloud be the central platform for that reinvention. Unfortunately for Oracle and its shareholders, indications are that the company has no intention of entering a period of creative disruption.

As Ellison said back in 2008, ?There are still mainframes. Mainframes were the first that were going to be destroyed. And watching mainframes being destroyed is like watching a glacier melt. Even with global warming, it is taking long time.? Only now it?s 2014, and mainframes aren?t the question ? Oracle?s core business is. Will Oracle still use the glacier metaphor? Given the accelerating rate of climate change, I wouldn?t bet on it.


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