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Oracle To Dethrone SaaS Leader Salesforce By Year’s End

Oracle’s cloud services may account for just 5 percent of its revenue today, but the company plans to be the world’s largest cloud service provider by the end of the year. In an interview with India’s Business Today, Oracle Senior Vice President Shawn Price told reporters that the company will aim to surpass current cloud computing leader Salesforce by the end of 2015, with a goal of $2.5 billion in revenue.

Price’s hiring at Oracle came just six months ago, when he worked at B2B software giant SAP. His experience, the executive said, will allow Oracle to view cloud services from a different angle from what has been the norm up until now.

For example, businesses in the Software-as-a-Service market approach cloud services either as a service or as a product of infrastructure. “But really what nobody is doing is taking 400,000 customers of on-premise work, upgrading them as a unit of work to the cloud for SaaS and extending them with Platform-as-a-Service and, quite candidly, some stuff there is no shortcut for,” Price said.

The market today, he added, has taken enterprise resource planning – developed specifically for the cloud – and collapsed it into an application as an in-house interface. Oracle, he said, plans to keep ERP and other SaaS offerings within the cloud.

Part of this development, Price said, is due to the cloud having edged its way into “every singe market” today. This deep integration of a relatively new technology has already led Oracle to service 70 million cloud subscribers and manage 29 billion transactions over the cloud, the executive said.

Oracle is looking to propel that growth even further. In the company’s most recent quarterly earnings report call, Oracle co-founder Larry Ellison predicted an influx of SaaS and PaaS use as the company experiences more than 100 percent yearly growth of its cloud services. The figures have led Ellison and Oracle to revise their predictions to reflect the expectation that Oracle will surpass Salesforce this year in SaaS and PaaS sales. “It’s going to be close but we are going to sell more,” said Price.

Oracle’s goal of becoming the world’s No. 1 cloud SaaS provider reflects the industry’s massive growth in only a few short years. Last February, IDG Enterprise released its 2014 Cloud Computing Survey and found that 69 percent of businesses today use at least one cloud-based application. Investment in the cloud computing space expanded by nearly 20 percent in just the last two years, the study found.

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