After working at Oracle for almost five years in the early 90’s, I can tell you that when Larry sets his mind to something he usually gets it.

Let’s take a trip down memory lane…

It started by just plain beating your competition at sales and marketing.  Remember, crush Ingres, destroy Informix, smash Sybase … they were close to dead and Larry let them slip away.  He would have obliterated DB2 and SQLServer but IBM and Microsoft were too big.  Still he ended up owning the database market.

With the database market securely in his grasp, he started looking to other places where data resided… Ah, applications.   Larry had always said that Oracle didn’t care about applications and that they were focused only on the database market.  Then starting in 2005, he started his assault on the applications market first with Retek, then PeopleSoft, J.D. Edwards, Portal, Siebel and then Hyperion.  SAP is too big to take out and you still need an aspirational competitor anyway.

Humm… if you combine middleware into databases, you probably would sell more databases… then he acquired BEA and Agile.

In September 2008, Larry ranted about “What the Hell is Cloud Computing?”  Then just a few months ago Oracle buys Sun Microsystems and is arguably now one of the leading Cloud Computing providers.  I guess the ‘Network really is the Computer‘.  Now with his new toy Exadata, he is going after Teradata but when he gets his new toys from Sun - Java, MySQL, storage, grid computing, virtualization - he will have a lot of Cloud Computing fun.   It will be interesting to see if Oracle keeps the hardware part of Sun or spins it out to his friends at HP.

So now we come to SaaS.

The battle between mentor and protege.  Marc Benioff, with the help of Larry Ellison, has done a phenomenal job launching the leading Software-as-a-Service firm, Salesforce.com and creating the entire SaaS industry.  At Oracle’s earnings call last week Larry claimed that although Salesforce.com is the largest SaaS firm at $1 billion annual run rate, and Oracle is now the second largest SaaS provider at an $750 million annual run rate.  This included some high profile wins for their CRM on-demand offering last quarter including NetApps, McAfee, Land O’Lakes and Conoco.   But I can imagine that Salesforce.com won their unfair share of the on-demand CRM deals last quarter.

Oracle Fusion finally arrives.

What I found interesting is that the new Oracle Fusion suite of applications is now code complete and in beta.  This means it will be available from an Oracle sales rep near you in the fall. Oracle Fusion is on-demand ready and will offer three delivery models; traditional On-Premise, SaaS and then there is On-Premise SaaS.   On-premise SaaS, is that like military intelligence? This is usually and incredibly bad idea unless you are a $23 billion dollar company that generates more than $5 billion in profits.  The new Oracle SaaS suite will all ERP modules including CRM and HCM applications focused mainly on F1000 sized organizations.

Even though Fusion might be a positive development for the Oracle On-Demand sales team, it is doubtful this will be enough to enable Oracle to control the SaaS market organically.   So look for Oracle do what they have always done when they want to control a market, buy their way to the top.  That would mean that some Oracle alumni’s like Marc Benioff or NetSuite’s (Larry and his family own a majority of Netsuite) Zack Nelson will probably be on Uncle Larry’s radar screen.  This is just like other Oracle alumni’s Craig Conway from Peoplesoft - who is also on the board of directors of Salesforce.com and Tom Siebel were pursued.

I guess in the end if you can’t beat’em, join’em.

Looks like someone is assuming an attack formation … the end of 2009 should be very interesting for the ever-evolving SaaS market landscape.