Interesting snippet from the recent Oracle earnings call:
Question (Kash Rangan – Merrill Lynch) So if I read it correctly, it is going to be ERP supply chain [cerium] for everything, HR, everything on demand, delivered as a multi [inaudible] service from your data sectors to add to the subscription model, right.
Answer (Larry Ellison) Absolutely but it’s not necessarily. The interesting thing is its not necessarily from our data center. We have three models. One is, we have on premise where you run it. We have on demand in our data center. I should say on premise in your data center where you run it. We have on demand in our data center where we run it. But then there is an on demand in your data center where we run it. So the computer is actually on your floor, behind your firewall, attached to your very fast local area network but we provide all the services.
And we think that’s where the real value is and we think that’s the interesting model. It’s a model that Salesforce.com does not offer. It’s a single tenancy on demand model, with a computer on your data center, highly secure, highly performance, but we provide all of the upgrade services and we administer the applications.
That’s proven to be a significant differentiator between us and Salesforce and what is allowing us to win virtually every large-scale deal.
Ellison is onto something, because the two top objections to on-demand are (1) confidential data being moved offsite into another entity’s care, and (2) end user performance. The third model Ellison talks about – where the Oracle on-demand application infrastructure is in your datacenter, in your care, on your network – overcomes both of these. It’s a compelling hybrid, and I suspect you’ll see other firms scramble to copy it.
(Via Dave C.)