Salesforce.com is the vendor most often identified with the trend toward software-as-a-service (SaaS), otherwise known as software on-demand. But in terms of size, it would appear that Oracle has surpassed Salesforce.com in the on-demand segment. This is a recent development that has only come about through Oracle's acquisition of Siebel, and its on-demand offerings, which complement Oracle's own work in the on-demand segment and its offering of its other products through the on-demand deployment offering.
Let's look at the numbers. Earlier this month, Oracle claimed over 2,200 customers with 1.7 million users of its various on-demand offerings. In the most recent quarter, this segment of Oracle's business generated $125 million, nearly 50% higher than the same quarter last year.
Last month, at Oracle's OpenWorld conference, CEO Larry Ellison claimed that Oracle's on-demand business is the same size as that of Salesforce.com. Actually, Larry was being conservative. If Oracle's quarterly revenue from its on-demand business was $125 last quarter, that would put it ahead of Salesforce.com, which has trailing 12 month revenues of $444 million, or $111 million per quarter. Furthermore, Oracle does not count license fees in its on-demand revenue numbers, whereas Salesforce.com's revenues are "all-in" numbers.
Part of the reason that Oracle is not recognized as much as an on-demand leader is that it gets there through a number of on-demand offerings, whereas Salesforce.com basically does it with a single offering. Oracle's offerings include:
- Oracle's traditional E-Business Suite, which it offers as a single-tenant hosted offering in its own data center in Austin, TX
- Oracle On Demand for Siebel CRM, which is a hosted deployment of Siebel's traditional CRM system
- Siebel CRM On Demand, which is its multi-tenant offering, similar to Salesforce.com's
- PeopleSoft Enterprise On Demand, a hosted version of PeopleSoft's Enterprise system
- A set of retail on-demand offerings, including hosted versions of Retek, ProfitLogic, and G-Log logistics
Computerworld has an edited transcript of an interview with Juergen Rottler
, head of Oracle's on-demand operations that gives more insight into what Oracle is doing with software-as-a-service.
An interesting point from the Rottler interview: Oracle claims that large Fortune 100 companies showing more of an interest recently in Oracle's on-demand offerings, which are often thought of as having greatest appeal for small companies. If large companies are increasing their adoption rate, it shows that large firms must feel there is a strong business case for SaaS.Related postsThe Business Case for Software as a ServiceMajor ERP vendors battle Salesforce.com for SaaS mindshare