After seven years of holding and reinvesting, I sold 100% of our family's stake in Oracle (Nasdaq: ORCL) in September. The decision was easier than you might think. Why? At the OpenWorld conference held earlier this month, CEO Larry Ellison all but admit he'd run out of growth ideas.
The trouble with bluster
He didn't say so specifically. Rather, Ellison announced a series of new initiatives for serving corporate clients interested in cloud computing. Trouble is, every one of them smacks of something we've already seen from someone else, notably salesforce.com (NYSE: CRM).
But hey, don't take my word for it. Oracle describes the new Public Cloud service as an "enterprise cloud for business" that supports different applications and services hosted by Oracle and available on a subscription basis. Sound like anyone else you know?
Wait, it gets better. The apps, apparently powered by the long-awaited Fusion architecture, include a blend of services that sound even more like what others offer:
- Fusion CRM in the Cloud, which Oracle describes as a software-as-a-service (SaaS) platform for helping "sales professionals outsmart their competition" in part by "collaborating" smarter. Never heard that one before. Except from, you know, salesforce.com.
- Fusion HCM and Talent Management, which Oracle describes as another SaaS platform but for unleashing the "power of your people" via human resources. What other companies do this? How about SuccessFactors (Nasdaq: SFSF) and Taleo (Nasdaq: TLEO)?
- Oracle Social Network, which is exactly as it sounds -- a social network built into the Public Cloud for helping users collaborate in ways familiar to those who already use Twitter, Facebook, or the new Google+ network. Oh, and don't forget Yammer and Chatter, salesforce.com's own popular network for connecting users with customers and partners.
In short, I can't think of a single breakthrough Oracle is offering with Fusion Apps and the Public Cloud.
They can take our data, but they'll never take ... OUR FREEDOM!
Ellison, for his part, told a keynote audience that what sets Public Cloud apart is the ability to move data into and out of Fusion Apps at will. By contrast, salesforce.com encourages clients to develop using its own Apex language, reducing compatibility with outside systems. That's proved to be an opportunity for data-integration specialist Informatica (Nasdaq: INFA), which has created a custom set of tools for moving information from salesforce.com to SAP. With Public Cloud, Oracle is telling users they shouldn't have to invest in integration.
Compatibility is important. So is data portability. But to go on stage and finger-wag at salesforce.com for not being 100% compatible with other systems is just low, especially when Oracle has made millions (billions?) selling its own data-integration tools. "The roach motel of clouds," TechCrunch reports him as saying when describing how salesforce.com allows clients to check in but not check out.
Point that finger elsewhere, Mr. Ellison
Call it Oracle's "Wag the Dog" moment, with Ellison creating hubbub over data "lock-in" in order to avoid admitting there isn't much new in what he's proposing with Fusion Apps and the Public Cloud. He's co-opting salesforce.com's message in the hope of stealing back install-and-maintain application software sales lost to the rise of cloud computing.
I can't abide that. Why? Because in this Extreme Makeover, Larry Ellison ignores his time spent pooh-poohing cloud computing. Four years ago, during an earnings call, he flat-out called it a bust.
Ellison has since changed his mind. He sees the threat cloud computing creates for Oracle's business. And with a hefty stake in NetSuite (NYSE: N), a supplier of on-demand business software built primarily to handle complex back-office functions such as inventory, manufacturing, logistics, and research and development -- functions not typically handled in a salesforce.com implementation -- his ranting about Fusion and openness smacks of opportunism at best, hypocrisy at worst.
Oracle was a good stock for our family portfolio once. No longer. The database king has stopped leading and started following. Do you agree? Disagree? Please weigh in using the comments box below. And if you're in the mood for more Web-centric stock ideas, try this free video. You'll walk away with a better understanding of the cloud computing movement that Netflix is profiting from and a winning stock idea from our Rule Breakers scorecard. Watch now -- it's 100% free.
