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IT Innovation, Oracle News | April 11, 2016

Larry Ellison on the Virtuous Circle of Cloud Innovation

By: Chris Murphy | Director of Cloud Content

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Cloud applications create a high-velocity, virtuous circle, according to Oracle Executive Chairman and CTO Larry Ellison.

“It’s the combination of us having a much higher frequency of new releases, adding features to HCM in the cloud, ERP in the cloud, and you’ve been adopting at a much higher rate,” Ellison said during a recent conversation with Oracle customers attending Modern Finance Experience and Oracle HCM World in Chicago. “It used to be it would take us two, two-and-a-half years to get an on-prem release out, and you might not adopt it for another two or three years. So it was a five-year wait between when we decided to put this feature out and when you actually adopt it and use it.”

And there are much worse scenarios than five-year adoption cycles—like companies that have so heavily customized their on-premises ERP systems that they never update or upgrade them.

“It’s completely the opposite with the cloud,” Ellison said. “We put in new features every six months, every nine months, and you adopt new features every six months, every nine months.”

That quick adoption creates another turn in the virtuous circle. As more companies adopt and use these apps, users suggest improvements, which the 4,000-plus developers working on Oracle’s cloud ERP and HCM applications can incorporate. That learning process embeds industry best practices into the applications, helping companies to adopt standard approaches for functions from accounts payable to employee evaluations.

Throughout the two Chicago events—Modern Finance Experience for finance leaders, and Oracle HCM World for HR executives—attendees talked about the advantages they’re seeing from adopting standard industry practices through cloud applications.

“We’re not working in isolation. We’re talking to all our customers,” Ellison said. “We’re prioritizing features that our customers feel are most important.”

The final turn in this virtuous circle comes from the most unpredictable and disruptive force of all: new technology. Take the example of smartphones. When they hit the consumer market, it took years for software suppliers to incorporate mobile interfaces and integrations into enterprise apps.

“Let’s say something like the smartphone shows up a year from now. Six months after it shows up, it’ll be in the product,” Ellison said. “You’ll be able to take advantage of that new technology, whatever that new technology is. There’s not this long time lag from the time when new technology shows up in consumer products until it gets into enterprise products.”

Ellison was talking with CFOs and HR leaders before a dinner held at the Field Museum of Natural History, located on Chicago’s south side not far from where he grew up. “I think I first came to this museum when I was nine,” Ellison recalled. 

Director of Cloud Content

Chris Murphy is director of cloud content at Oracle. He was previously editor of InformationWeek.

More about Chris Murphy

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