This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Greenberg: Not Long Ago Oracle's Ellison Mocked 'the Cloud'

By: Herb Greenberg | 04/29/14 - 12:31 PM EDT

SAN DIEGO (TheStreet) -- When Oracle (ORCL) execs rang the opening bell of the New York Stock Exchange today, the banner behind them read, "Engineered for the Cloud." A few hours later the company was planning to host something it calls "The Oracle Cloud Forum."

But roll back the clock to an analysts' day in October 2009 and Oracle CEO Larry Ellison, nobody's fool, wasn't waxing so philosophically about "the cloud."

After being somewhat sarcastic about the brewing euphoria over the word "cloud," he said:

...As far as the Cloud, I make jokes about Cloud computing because obviously Cloud computing is something totally different really. Does it use Intel microprocessors? Those aren't new. Does it use memory from Samsung? That's not new. Does it use Cisco networking? That's not new. Does it use Linux and Solaris and Oracle and MySQL? None of those are new.

Someone's got to explain to me this new technology called Cloud computing. From what I can tell it's just renting computers, and that is not the greatest new technology that's ever been invented. It's kind of like a financing idea. But if you can explain it to me, I'd -- I'm -- I'd love to listen.

But... will Cloud computing destroy our business? It will just -- well, if there are no microprocessors and no memory and no networks and no databases and no operating systems, it's going to destroy everyone's business. It's just -- but, it's just some silly notion.

He went on to say:

And building the cloud is nothing more than building a lot of data centers, secure data centers, fast data centers, cost-effective data centers, and we want to be the technology supplier for the people and the organizations who are building those data centers. That's where we -- that's what we're good at. That's where we want to join the battle.

At an analyst's day year later he elaborated:

I've objected to the term Cloud computing for a long time because so many people use it to mean entirely different things. It's as if every color was called red. It's confusing. Look at the sky. It's this beautiful shade of red. Look at the ocean. It's a fantastic shade of red. It's a different shade of red than the sky but it's still red.

I believe in a modern era of Cloud computing and the company that really invented the term and really invented the technology was Amazon (AMZN) with their Elastic Comucloud. That has very specific characteristics. It's a platform that lots and lots of customers can share. Now how do you get away with that without one customer damaging another? Well, you provide each customer their own virtualized environment.

In the name of the Amazon Cloud is the word elastic. It's such a fundamental characteristic of Cloud computing that as you need more capacity, one of the real virtues of Cloud computing, as you need more capacity you get it automatically from the Cloud and you only pay for what you use. So as you need more capacity you get for the next four hours and you pay for it for the next four then it shrinks back down. That's very different, very different than salesforce.com which has got much older technology.

They're a very successful company. They've done a nice job, but they're not Cloud computing, certainly not Cloud Computing in the sense that Amazon.com is Cloud computing or in the sense that the Exalogic Elastic Cloud is Cloud computing. We mean entirely different things. If you want to call them both Cloud fine but understand they're entirely different technologies. One is relatively new and one is relatively old.

Reality: I'm sure Marc Benioff of Salesforce  (CRM) would have a somewhat different view, but Ellison's point is well taken: The cloud has become perhaps too ubiquitous. (And on Wall Street, you know what that means! Everybody suddenly lays claim to the fad du jour.) To Ellison's credit, Oracle didn't get its heels dug in too deeply, and embraced its own version of the cloud. Lesson in there somewhere.

-- Written by Herb Greenberg in San Diego

Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security. He can be reached at herbonthestreet@thestreet.com.

Other Posts In Herb's A Dose of Reality:

Get More Investment Ideas:

Kass: Has the Auto Industry Peaked?

07/31/14 - 06:00 AM EDT

Cramer: A Turn Could Be Around the Corner

07/30/14 - 10:36 AM EDT

Melvin: Buying Brazilian Bargains

07/30/14 - 08:41 AM EDT

Cramer: Not So Loco

07/29/14 - 11:17 AM EDT

Norman: Predicting Market Crashes Is Folly

07/29/14 - 09:24 AM EDT

To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.

Markets

DOW 16,735.08 -145.28 -0.86%
S&P 500 1,954.95 -15.12 -0.77%
NASDAQ 4,422.41 -40.4920 -0.91%

Herb's Tweets

Brokerage Partners

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
Real Money Pro

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Dividend Stock Advisor

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Breakout Stocks

Bryan Ashenberg, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Options Profits

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
Top Rated Stocks Top Rated Funds Top Rated ETFs