Is Oracle Afraid of the Cloud?

More than 6 months after Oracle announced the Java Cloud and Database Cloud services at Oracle OpenWorld, we’re still waiting for these services to materialize. There might be technical reasons for this delay, but it is also obvious that Oracle hasn’t figured out a business plan for these services either.

At the announcement, Oracle was cagey about the pricing, which was to be expected for a service Larry reputedly invented a few months before OpenWorld. However, I recently had the opportunity to ask Oracle again if they had worked out – and they still refuse to quote a price. You’ll have to talk to your friendly Oracle salesperson to get a quote (that will undoubtedly be wrapped in legalese saying you can’t share it).

This lack of transparency is a clever move by Oracle: They can offer reasonable pricing in order to acquire a few token customers and then quote everybody else a yearly price equal to, say, one third of the cost of a perpetual license. In this way, they can claim to have a cloud service without cannibalizing revenue from their existing business model of selling full licenses up front.

By failing to embrace the cloud model, however, Oracle will eventually start loosing market share to true cloud players. It’ll be interesting to see if they figure out how to transform themselves into a real cloud company.