Founded 35 years ago, Oracle Corp. remains one of the world's most successful software makers. But it is facing a new challenge as many of its corporate and government customers embrace "cloud computing" — the concept of storing software applications in remote data centers so they can be accessed on any Internet-connected device.
Cloud computing poses a threat to Oracle's traditional approach of licensing its database and application programs to be installed on individual machines, setting the company up to collect more revenue from maintenance fees. In clouding computing, customers pay monthly fees for online access to the applications without having to worry about upgrades and maintenance.
Like a lot of longtime software executives, Oracle CEO Larry Ellison has occasionally mocked cloud computing in the past. But he has been adding more cloud computing services to Oracle's product line, an expansion that has included a several acquisitions costing Oracle more than $3.5 billion during the past year.
Ellison discussed Oracle's determination to adapt to cloud computing in response to a question during a conference call Thursday about the company's fiscal first quarter earnings.