Oracle reported its fourth quarter earnings on Wednesday and, as we’ve come to expect from the company’s flamboyant billionaire founder, Larry Ellison threw a few barbs at his major competitors.
He slammed SAP’s Oracle-killer database HANA on a conference call with analysts like this:
“SAP does not use HANA in the cloud very much. I know that because they keep paying us. They paid us again, this quarter, for Oracle for Concur, Oracle for Ariba, Oracle for SuccessFactors,” he said, naming three cloud companies that SAP acquired over the past few years to jump start its cloud business.
“If they using HANA for anything, I don’t know about it,” Ellison chuckled.
Ariba, SuccessFactors, and Concur obviously built some of their systems on the Oracle database before they were acquired by its biggest rival, SAP.
Like other Oracle customers, SAP must have found that it isn’t easy to rip and replace a database, even though it must be excruciating to write checks to Oracle.
One of Oracle’s CEOs, Safra Catz, explained why Oracle doesn’t have that problem. Oracle makes all the hardware and software it needs to build its own cloud. This means that Oracle’s cloud can be run more profitably than competitors, she said.
“Salesforce paid us a lot of money”
Ellison agreed and used a slam at Salesforce as an example:
“Salesforce paid us a lot of money for their platform. They buy Exadata from us to run their data center, they buy the Oracle database. They paid a LOT of money for the Oracle database,” he said, referring to a 9-year deal signed in 2013 between the two competitors.
Salesforce started off almost as an Oracle spin-out. The idea was conceived when Salesforce CEO Marc Benioff worked at Oracle. Ellison was even an early investor and board member. 16 years ago, Benioff would naturally have used the Oracle database.
As the two companies became more competitive, and the two men had a falling out, Salesforce was rumoured to be trying to move to an open source database known as Postgres. That would have been a bad precedent for Oracle, showing other cloud companies how they could migrate off Oracle, too.
Instead the two men buried the hatchet, momentarily, and cut a deal estimated to be valued at $US300 million, where Salesforce would continue to buy Oracle’s products for another nearly decade. It was said to be a pretty good deal for Salesforce.
But not Workday!
As for Oracle’s other arch rival in the cloud, Workday?
Ellison dissed Workday in the usual ways, saying that it was winning 10 times more deals than Workday for a cloud verion of the financial application known as enterprise resource planning (ERP).
We know that Workday doesn’t use Oracle’s database or any of Oracle’s technology. Ellison has said so.
So, every customer that leaps to Workday is a double loss for Oracle, both in the sale of the cloud contract, and the sale of the infrastructure that runs Workday’s cloud.
This has caused Wall Street analyst, Jefferies analyst John DiFucci to report that Oracle has been behaving “irrationally” to win deals from Workday for over a year.
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