Oracle CEO Larry Ellison tried to swat away the gloom of his company's lackluster fourth quarter earnings Thursday by declaring war on the cloud software-as-a-service and platform-as-a-service markets.
On the vendor's Q4 earnings call, Ellison said Oracle has "dramatically expanded" its sales force to go after cloud customers. These people have been specially trained to compete with the "new generation" of SaaS and PaaS vendors, Ellison said, referring to scrappy startups that have been nipping -- and in some cases, taking big bites -- out of Oracle's business.
Oracle is targeting SaaS and PaaS because these are the most profitable parts of the cloud market, with margins in the 40 percent to 50 percent range, Ellison said. While Oracle also plans to sell cloud infrastructure-as-a-service, it's not expecting this business to be as profitable.
With competition intensifying, it would seem logical for Oracle to get channel partners involved in selling its cloud services. But that isn't happening yet, and partners told CRN they're eager to get in the game.
"I’ve heard nothing about IaaS, PaaS, SaaS, or any other Oracle cloud offerings we can re-sell," said an Oracle partner executive who requested anonymity. "The entire Oracle cloud story is still fuzzy, as far as I’m concerned."
An Oracle spokesperson declined to comment on how many partners are currently selling its cloud services.
Oracle may look to the channel to help with its cloud expansion in the future. Rich Geraffo, Oracle's head of worldwide channels and alliances, told CRN in May that partners could help reach segments of the cloud market where it doesn't have coverage.
During the fourth quarter, Oracle's SaaS and PaaS revenues grew 25 percent. But at $322 million, these businesses still account for less than 3 percent of Oracle's overall revenue.
The bulk of Oracle's cloud revenue right now is SaaS, but president and CFO Safra Catz said PaaS will become "very important" this fall when Oracle launches its full PaaS offering.
For now, Oracle is setting its sights on surpassing Salesforce.com as the tech industry's largest SaaS vendor. Oracle is already number two, Ellison said, and by growing SaaS bookings by more than 50 percent is fiscal 2015, it'll be in position to "close in on the number one spot."
In its fiscal fourth quarter Oracle reported a profit of $3.6 billion, or 80 cents per share, down 4 percent compared to last year's fourth quarter. Revenue was up 3 percent year-over-year to $11.3 billion.
Wall Street analysts surveyed by Thomson Reuters were expecting $11.48 billion and 83 cents per share.