Clearly, Oracle has made great strides in the cloud in a relatively short period of time and has shown impressive relative growth rates in the SaaS market. These past two quarters have nonetheless shown that the competition within this space from IBM (IBM) and SAP (SAP) is also very aggressive.
Oracle's ascent within the cloud is now being taken seriously. Accordingly, rivals have also begun to apply pressure. Oracle is responding with strategic partnerships with (among others) Microsoft (MSFT) and Salesforce.com. Some are quick to suggest that Oracle is admitting defeat by partnering with its hated competition. I don't believe that to be the case.
I think it's a smart move. For that matter, pundits should also raise questions about the competition's need for Oracle's platform, in particular Salesforce.com. The SaaS market is moving at a rapid pace. Rivals are revealing they need Oracle's technology just as much as the notion that Oracle "needs" these partnerships.
What's more, to the extent that 12c can deliver on Ellison's promise and become "the foundation of a modern cloud," this changes not only Oracle's market position within the cloud but raises expectations for the company's long-term growth rates for revenue and free cash flow. And we haven't even discussed advancements with Oracle Fusion and Elastic Cloud.The company still has more to say about its recent partnerships and the role that 12c will play in them. So, there are still plenty of unknowns. What is known, however, is there are plenty of smart people at Oracle. While I understand that management's bravado has rubbed a lot of people the wrong way, it seems foolish to use this as motivation to bet against a company that has a chip on shoulder, and several more up its sleeve. At the time of publication, the author held no position in any of the stocks mentioned. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.