Here’s How Larry Ellison Invented Cloud Computing

Ključne besede: Here’s How Larry Ellison Invented Cloud Computing
Vir: BusinessInsider, 2012

Most of the time,’s Marc Benioff is credited with inventing the new cloud model for delivering software via the Web.

But Larry Ellison, who once famously denounced the term “cloud computing,” is now standing up to take credit for the concept, if not the currently fashionable term.

NetSuite CEO Zach Nelson told Business Insider that he can vouch for Ellison. Nelson worked with Ellison, Benioff, and another key player, Evan Goldberg, at Oracle back in the 1990s.

Goldberg really thought up the idea of software as a service, says Nelson. Goldberg was “an incredible developer” and Ellison wanted to invest in him, according to Nelson.

In a meeting, Goldberg described his idea to Ellison of building “a version of Siebel but on the Internet,” Nelson says. (Siebel was the biggest customer-relationship management software maker of the day.)

Ellison said the idea was interesting but “no one runs their business on Siebel. You have to build the back office first, the accounting system and the ERP system, and then you build the other systems around it,” Nelson recounted.

So Goldberg agreed to do that and Ellison funded it. The company was born as NetLedger. It would later change its name to NetSuite.

NetSuite CEO Zach Nelson

“There was one other guy in that conversation and that guy was Marc Benioff. Benioff called back two weeks later and said ‘I’m going to do that Siebel online thing,’ and that became Larry funded both of those companies,” says Nelson.

And until last year, Ellison held a soft spot in his heart for Benioff, giving him a keynote at Oracle’s annual conference OpenWorld.

That relationship fell apart in 2011. In 2005, Oracle bought Siebel, Benioff’s biggest competition, and a quiet feud began to simmer.  In 2011, Benioff got yanked from the speakers’ list at OpenWorld. So he invited everyone to come hear him talk at a hotel across the street.

This year, Benioff wasn’t invited to speak at OpenWorld at all.

Taking his place today at OracleWorld, in a prime keynote spot, was Nelson, who joined Goldberg’s company in 2002. He talked about a cozy new partnership with Oracle where NetSuite’s cloud software can work with Oracle’s E-Business Suite. The idea is to divide the market so that Oracle gets the big enterprise deals, and NetSuite gets the midsized deals and can even snag some business alongside Oracle.

Good thing Ellison hedged his cloud-computing bets. Read more

NetSuite CEO: Here’s How We Kept Larry Ellison Off Our Turf

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NetSuite CEO Zach Nelson has brilliantly wiggled out of a tough spot. His company was on a collision course with Oracle, the tech giant run by Larry Ellison, Nelson’s ex-boss and the original backer of NetSuite.

Under Ellison, Oracle has gone head first into cloud computing, including launching online versions of its Oracle Fusion apps, its flagship financial, enterprise resource planning, and human resources apps.

But wait! That was supposed to be the role of NetSuite, a company Ellison backed at its founding in 1998.

So Nelson and Ellison today announced a good plan to more or less divide the market—and conquer their enemies.

Oracle’s Fusion apps will be for large enterprise deals. NetSuite will go after the midsized market and deals involving smaller business units of large enterprises, going head-to-head with Microsoft and SAP.

New software unveiled today will let subsidiaries using NetSuite easily integrate with headquarters running Oracle installations, so it doesn’t have to be an either-or choice.

“If Oracle and NetSuite are [at] the same table, one of us in wrong deal,” Nelson told Business Insider. Together, they can focus on their joint enemy, SAP, which Nelson says is trying to grab more midmarket share with its big push into cloud.

Ellison was well-motivated to agree. He and his family actually still own more than 50 percent of NetSuite. Those shares are locked in a “nonvoting trust,” Nelson said, meaning they vote in proportion to how other shareholders vote. Ellison can, however, still vote on changes of leadership, perhaps the most important question shareholders tackle.

“Oracle wanted him to basically have those shares locked up to avoid any appearance of conflict of interest,” Nelson says.

NetSuite shares have more than doubled from a low of $25.32 a year ago. With shares trading above $60 today, NetSuite has a $4.4 billion market cap. Ellison’s stake is worth a sizeable $2 billion-plus.

Granted, Ellison, one of the world’s richest men, is worth about $38 billion. But why push NetSuite off a cliff if there’s a better way?

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Larry Ellison Just Took On Amazon With A New Cloud Service

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Larry Ellison just announced that Oracle was launching a brand new cloud computing service.

Oracle will now be offering “infrastructure as a service” as the industry calls it, or “hardware as a service” as Ellison dubbed it tonight. He was speaking during the opening keynote of the company’s annual OpenWorld conference being held in San Francisco this week.

For a guy that once called cloud computing “complete gibberish,” he’s now offering clouds in every way they can be offered: software-as-a-service (where companies pay monthly to use an app over the Internet), platform-as-a-service (where companies pay monthly to have someone else host their apps, typically custom-developed apps) and infrastructure-as-a-service (where companies rent all of the hardware, can set it up the way they want, and use it to host whatever apps they want.)

There are two versions of Oracle’s new IaaS cloud. One is a “public cloud” similar to the kind of clouds offered by Amazon, Rackspace, HP, and others, where the hardware is located in Oracle’s data centers. It includes compute services and storage services, Ellison said.

The second is the so-called Oracle Private cloud, where a replica of Oracle’s public cloud is put in the customer’s own data center. Oracle would still own the hardware and be responsible for running it, securing it and updating it.

“We own it. We manage it. We upgrade it. You only pay for what you use,” Ellison told attendees.

Oracle isn’t the only company offering private clouds. HPIBM and lots of others do the same.

Oracle’s selling point over the competition is that it’s using exactly the same hardware and software in its private cloud as it uses in its public cloud. That would be its Exalogic and Exadata computers. These have been specifically designed to host Oracle’s software and database.

The two new cloud services were part of four big announcements Ellison made on Sunday night.

The third announcement was that Oracle invented a brand new kind of database, designed specifically for the cloud. It’s dubbed Oracle 12c (the c stands for cloud) and it let’s multiple companies share the same database. Or a company with many Oracle databases can use 12c to easily consolidate all them onto one set of server/storage hardware. The Oracle 12c database will be available in 2013.

The fourth announcement was for a new hardware product that is a direct competitor to rival SAP’s HANA database. Ellison introduced Exadata x3 and says that it will be bigger and faster than HANA, as well as rival server products from IBM and HP but that it will cost far less. Exadata x3 prices start at $200,000.

“If you talk to an Oracle salesperson, you can get a better price than that. I know these guys and gals and they are always ready to deal,” Ellison promised.

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