Emphasizing that cloud computing isn’t so much a technology as a new business model, Oracle CEO Mark Hurd said it’s critical to helping companies worldwide achieve their four main priorities: increase revenue, boost cash flow, decrease spending, and manage risk.
Oracle CEO Mark Hurd.
OracleAt the root of that business model shift is the ability to free up money and people to innovate—help create new and different digitally driven products, services, and customer experiences within flat IT budgets, Hurd said last week during his keynote at Oracle Modern Business Experience in Las Vegas. That ability becomes particularly important in the current slow-growth economic environment, in which most companies must grab market to increase revenues, he said.
Unlike the tech special du jour—whether it’s big data, virtualization, artificial intelligence, or blockchain—the cloud is something bigger. “Why has cloud stuck over the course of 10 years? It’s not a technology. It’s really a business model,” he emphasized. “At its core, it simply drives down capital expenditures, reduces labor, creates certainty of outcomes, and reduces the cost of overall maintenance. In the end it costs less. And while it does all that, it’s actually more reliable, more secure. And it gives you access to more innovation.”
The average CEO lasts in his or her job only about four years now—40% last only 18 to 20 months, Hurd noted. As a result, the average CEO has only that much time to get on top of the above business fundamentals before their boards get on top of them. “The pressure is unbelievable to produce short-term results,” he said. “The patience for lack of execution is virtually zero.”
Rather than have to hire armies of experts and assemble the supporting infrastructure to deploy big data analytics, AI, blockchain, and other emerging technologies, companies can simply subscribe to cloud application services that come with those advanced technologies and the very latest capabilities built in. As such, the cloud business model accelerates the speed to innovation—and bottom-line results, Hurd said.
“It fundamentally shifts the work from your IT budget to our R&D budget,” he said, noting that Oracle’s 10,000 developers essentially become part of customers’ IT organizations. “It fundamentally shifts the risk, shifts the modernization, the hope that you can ever keep up.”
