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By | Neil McAllister 24th April 2015 20:11

Oracle's Hurd says 95% of its software will be cloud services this year

Big Red 'not protecting anything,' says co-CEO

Oracle co-CEO Mark Hurd has said the database giant plans to make substantially all of its software products available as cloud services, and that it will be ready to start signing up subscriptions come this October.

Hurd made his comments in an interview with Bloomberg on Thursday, saying that 95 per cent of Oracle's products will be offered as services by the time the firm hosts its annual OpenWorld conference in October. Around 65 per cent of Oracle software is available as cloud services already, he said.

"We are not protecting, so to speak, anything," Hurd said, adding that Oracle is moving its offerings to the cloud "at a really incredible pace."

Hurd's statements echo ones made earlier this year by Oracle overlord-cum-CTO Larry Ellison, who vowed that "Oracle will sell more SaaS and PaaS systems than in this current calendar year, 2015."

Ellison said Big Red's cloud revenues for the three-month period ending on February 28 had grown by more than 30 per cent since the previous year's quarter. Oracle is said to be offering its sales staff huge bonuses to keep the momentum going – and with good reason.

In many ways, Oracle's services push mirrors that of its hated rival, Microsoft. Redmond has spent billions on data center infrastructure over the last few years as it attempts to transition from a business that sells software that runs on PCs to one that rents applications running in the cloud.

Like Microsoft, Oracle has seen its on-premises software business stall and begin to wither with the arrival of new competitors that offer more attractive licensing terms and delivery models for their software.

In its most recent earnings report, Oracle's sales of new software licenses were down 7 per cent on an annual basis. It was the fourth straight quarter in which the firm's new license sales either declined or were flat. The last time its new license sales grew by double digits was in the second quarter of 2013.

In the same report, Oracle said its revenue from software license updates and product support grew by just 2 per cent – which is to say, barely at all.

The combination of new software license sales, software license updates, and product support accounted for 76 per cent of Oracle's revenue for the quarter. In other words, Oracle's software business, as a whole, is not healthy. Something needs to be done.

Transforming Oracle into a cloud software company will take a lot more than just Hurd's say-so, though. In its most recent quarter, Oracle's combined SaaS, PaaS, and IaaS sales were worth $527m. That was up 2.1 per cent from the previous sequential quarter. It was also just 5.7 per cent of the firm's total revenue. ®

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