Monday, September 29, 2014

The Best Question So Far

So I was in a session here at OOW14 on “User Group Sunday” when one of the attendees asked what I consider to be the best question I’ve heard in a long, long time.

If the Oracle Cloud is so wonderful, why haven’t all of Oracle customers moved to it already?

Great, great question.   Goes straight to the heart of one of Oracle’s primary messages.  The answer played out as something close to what follows:

1.  The cloud - services model is still relatively immature within the Oracle ecosystem.  Some elements of Oracle’s pricing and execution in the services model are still being worked out.  And that will take some time, mostly because human beings typically don’t change behavior at the drop of a hat…regardless of where they work.  It’s still a work in progress, so many customers are taking a “wait and see” approach while things work themselves out.

2.  Services revenue, while growing, only constitutes about five percent of Oracle’s revenue at the moment.  Cloud services are still a relatively new thing in the Oracle  world.  Not every customer is ready to be on the leading edge, especially in light of their own corporate culture.

3.  It’s tough to move customizations to the cloud.  There’s no secret sauce to make it easy.  Some heavily-customized customers have many customization to reconsider before they’ll be ready to take advantage of cloud services.  The same could be said for data - many customers have significant data clean-up efforts required to be cloud-ready.  Again, there’s no secret sauce for this.

4.  Lack of control, sometime expressed as a concern over data security.  In a public cloud in particular, a customer’s servers are no longer under their control.  Ditto for data storage.  While that makes some customers nervous, I’d suggest those concerns be balanced by two thoughts:  A) Oracle is probably better at protecting your data than you are.  Protecting data is part of their core business.  Most Oracle customers do not generate revenue or profits by protecting data; B) Citing Oracle’s Thomas Kurian:  “most customers would rather use enterprise applications than run enterprise applications.”  Moving to the new model requires customers to let go of running the applications - for most customers, the economics alone make that a good thing.

It’s a funny thing.  Cloud services offer some pretty significant benefits: relief from the maintenance associated with running enterprise applications, the capability to be more agile in development, the flexibility to quickly scale up and down as computing requirements change.  Lots of benefits available in cloud application services.  What’s holding customers back from getting those benefits for themselves comes down to two overarching theme:  1) challenges in their own mindset or corporate culture; 2) the state of their data or architecture.  That seems to be it, unless I’m missing something.  And, if I am, you can tell me in the comments.

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