As Oracle Attacks SAP, Amazon, and Salesforce, Can Larry Ellison Beat Them All?

(Another installment in our series exploring the primary challenges faced by the Cloud Wars Top 10 vendors in 2020.)

While Larry Ellison has always eagerly sought out relevant marketplace confrontations, the lineup of cloud adversaries he’s called out here in 2020 is challenging even by Oracle’s lofty standards.

Ellison has promised to dethrone SAP as the world leader in ERP applications for both cloud and on-premises. He’s trying to rewrite the rules of the IaaS market Amazon has long dominated by inserting the Oracle Autonomous Database into the mix. And he’s even promised to overtake Salesforce as the leading SaaS vendor despite the fact that Marc Benioff’s SaaS revenue is more than twice that of Oracle’s.

Has Ellison overreached?

Or has he now, to his way of thinking, got his competitors right where he wants them?

One of the reasons why I admire Ellison and his company is that they rarely agree to play by someone else’s rules—just look at his intriguing effort to shake up the formerly resolute IaaS business by suddenly declaring that database is now an infrastructure component. Now, it just so happens that Oracle’s by far the leading database vendor in the world, and that—what a coincidence—it has a new cloud-native autonomous database on the market when no other competitor is even talking about one.

Is the gambit working?

On recent earnings calls, Ellison says demand for Autonomous Database is enormous—so steep that the company can’t even forecast it. He says it will be the most successful and important new product his 40-year-old company has ever introduced. (For more on that, please see Oracle’s Blowout Q4: Autonomous Database Looks Like a Huge Success and Attack of the Killer Database: Oracle Autonomous DB “Will Replace Everything”.) 

But to get it, you have to use Oracle’s IaaS. 

So if Ellison’s early projections for Autonomous Database come true, he will have indeed made Oracle a player to be reckoned with in the infrastructure world.

With SAP, Ellison has once again called out the market leader and promised to overtake it. Using his own blend of fact, fiction and fantasy, Ellison is proclaiming that Oracle’s fast-growing Fusion ERP SaaS business plus NetSuite’s high-growth ERP solutions will become so popular that the momentum will propel Oracle to the top spot in ERP that SAP has held for decades. (For more on that, please see Oracle Will Dethrone SAP as World’s #1 ERP Vendor, Vows Larry Ellison.) 

In this case, Ellison and Oracle are saying that the unique combination of a wide range of software assets that only Oracle has will deliver capabilities to customers that neither SAP nor any other software company can match. Those are:

• a full suite of modern, flexible and elegant cloud-native ERP SaaS apps;
• the Autonomous Database that’s specially tuned to handle those Fusion ERP workloads;
• new Analytics tools designed to work in unprecedented ways with those apps and that database; and
• the Autonomous Linux operating system to complete the package.

With Salesforce, Ellison likely has his most challenging battle. Benioff’s company now says that by 2024, its revenue will be $35 billion as it continues to defy gravity and find ways to grow 20% to 25% quarter after quarter and year after year in spite of its increasingly massive base. (For more on that, please see How Salesforce Plans to Defeat Oracle and SAP While Scaling to $35B.)

Looking ahead 4 years to that $35-billion forecast, let’s say that 80% of its revenue will come from SaaS and 20% from PaaS. That would mean SaaS revenue for fiscal 2024 (ending Jan. 31, 2024) of about $28 billion.

For Oracle, its 2019 SaaS revenue was probably about $5 billion to $5.5 billion (Oracle no longer breaks out that number). So if Ellison intends to fulfill his vow of overtaking Salesforce as the world’s leading SaaS vendor, he will have to grow Oracle’s 2019 SaaS revenue by a total of 400% over the next four years.

I would rarely bet against Larry Ellison, but that is one bet I surely would not take.

As for the other two, the odds are also not currently in Ellison’s favor.

But that’s exactly how he likes it. 

Because Larry Ellison believes that if people aren’t calling you crazy, you’re simply not reaching far enough.

Disclosure: at the time of this writing, Oracle was among the clients of Cloud Wars Media LLC.

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