Software giant Oracle is planning to expand its software-as-a-service offerings, according to a report from news agency Reuters.
The unconfirmed report says that Oracle plans to offer human capital management software via the web, and extend its on-demand customer relationship management offering. These are the two business applications where software-as-a-service has had most traction.
The Reuters story described Oracle CEO Larry Ellison as a ‘strong proponent’ of SaaS. But while he is a significant investor in SaaS pioneer Salesforce.com (whose platform is based on an Oracle database), he has in the past questioned the viability of SaaS as a vendor business model.
“The entire on-demand industry has to get better at making money in selling on-demand software,” he said in a conference call with investment analysts in June 2008.
“If you look at the leader, Salesforce.com, they don’t make very much money and they’ve been at it for almost ten years,” Ellison added. “It’s hard to point to any software-as-a-service provider that’s doing a good job of improving its profitability.”
Two things may have changed his mind in the meantime, however. Firstly, the economic crisis has made SaaS more attractive for many businesses, as it reduces the capital outlay required for new application deployments.
And secondly, Oracle agreed to acquire Sun Microsystems earlier this month. That acquisition will not only bring Oracle its own hardware division, but also the cloud computing practice that Sun has been building of late. Both may improve the cost of providing SaaS for Oracle, and therefore the profitability.
