My 2 cents on Oracle, Salesforce and the Cloud

Have been following the chatter closely on StockTwits, among the Enterprise Irregulars, and elsewhere after Oracle’s big miss. Here’s my 2 cents…

  • Cloud/SaaS/OnDemand software (choose your buzzword) is a powerful long-term trend - buyers are shifting strongly in this direction and it represents a tremendous market and investment opportunity. This is long-term bullish for flagship vendor Salesforce.com ($CRM) and a host of other companies. But…
  • Oracle’s ($ORCL) big miss yesterday is a warning sign that the hardware business (which they entered with their Sun acquisition) stinks, and the on-premise apps business (Siebel, etc…) isn’t much better. Oracle is also, however, a major supplier to many SaaS companies (including Salesforce.com) so the move to the Cloud both hurts (short-term) and helps (longer) them.
  • The economy stinks and budgets are extremely tight - I doubt that many if any software companies are expecting to wrap their Q4’s in a big way. 2012 is an election year so it’s almost a given that things will improve (although Europe remains a very big wild card). But if you’re an investor, it’s hard to believe that there’s any real rush to do more than watch and wait for things to stabilize.

Oracle and Salesforce are both well-managed businesses with significant market presence, strong products, deep ecosystems and a multitude of growth opportunities. I’m very confident that both companies - and others in the ecosystem(s) around them - will be fine long-term - both as businesses and as investment opportunities.

But for now, it remains pretty ugly out there. I plan to stay on the sidelines and enjoy the holidays, and will check back in early 2012.

The Wayne Gretzky of Enterprise Software

Marc @Benioff continues to skate where the puck is going, not where it is…

Last week Salesforce.com, a leader in cloud-based corporate software,bought Rypple, a little-known outfit that specializes in creating and observing what is called “the social enterprise” — which uses things like Twitter posts, status badges and Facebook-esque likes to set goals, manage teams and recognize performance.

Rypple is at the far end of a movement to sell companies on the idea that the modern worker, armed with a cellphone and a tablet computer, having access to a nearly infinite amount of computing power in the cloud at all times, is a new kind of beast. Just as our social lives have changed because of Twitter and Facebook, the argument runs, so too must our working lives change.