Doom and gloom, right?
http://www.msn.com/en-us/money/smallbusiness/oracle-nabs-bofa-as-new-cloud-customer/ar-BBDgPI3
5 replies (most recent on top)
Oracle is the new Wipro, talk about going down market and setting yourself up to be unprofitable.
This sounds like Cloud @ Customer. They will run the cloud at BoA's site with Oracle providing the management. There is a comment from executive leadership at BoA indicates this is who Oracle sold into. There is a lot riding on this one but when you get to that level, sometimes it's an easier sell to make because you can make many promises.
Oracle has found the Infosys/TCS/Wipro/TechM formula. A person familiar with the AT&T deal told me that the AT&T used to pay almost a million a day to Oracle in the previous limited contract for Database/Solaris licensing and support. However with the latest showcase deal they are getting paid about 50-100 million less and above that Oracle is throwing in free Exa machine on premises that they will be supporting/monitoring from India I guess. So not only they are losing money on the licensing costs - they are throwing in tons of free cloud stuff to create the buzz that a Fortune 500 company is using on premises ExaCM. This is exactly what the Indian outsourcing companies do - with an added twist that Oracle is selling a glorified linux box to go with it.
If two people wearing cement boots are hugging in the water, do they still sink?
Oracle is trying to tell the story that it is THE Cloud for enterprises. So it promotes its "record" growth last quarter when, in fact, it was more about a tax benefit boosting the numbers than about real Cloud deals. The marquee reference during the earnings call was how AT&T is going to be moving workloads to the Cloud over the coming years, but there was no mention of the financial incentives behind the scenes (plain and simple, Oracle bought the business). Now the story is about Bank of America and how they are "buying into Oracle Cloud", but the details indicate that the software "will run at BofA’s location but using Oracle’s staff and hardware." That's an on-premise hosting arrangement, not Cloud.
Oracle has plenty of cash and a strong support revenue stream to keep themselves alive for a long time to come, so there isn't any doom and gloom (except for those caught in the ongoing efforts to lower cost by shifting jobs to India or young employees). However, it certainly isn't as rosy a picture as Oracle is trying to paint. Realistically, Oracle is becoming a legacy company due to their years of treating their customers poorly and are likely looking at a future with flat to negative overall growth.