Oracle’s Hurd: Use Cloud to Meet Customers’ Real Strategic Needs

If the cloud forecast of Oracle CEO Mark Hurd comes to pass, solution providers will have few customers to sell hardware and software to within 10 years.

The first generation of cloud computing was mostly about experimentation. Businesses tried hosted servers and cloud-based applications, such as e-mail, as an alternative to on-premises infrastructure and software. There wasn’t much need for the channel, as even vendors hadn’t made up their minds whether the experiment would grow up into a full-fledged business.

Unfortunately, that fogginess about cloud value misdirected the channel. According to research by The 2112 Group, the average solution provider earns slightly more than 40 percent of its gross revenue from cloud and managed services. Of that, most of the offerings are rudimentary services — productivity applications such as Microsoft Office 365, cloud-based backup, file services and that sort of thing. Most of these services are part of the second generation of cloud computing, in which cloud became an extension of managed services.

The market is now rapidly evolving to the third generation of cloud computing, in which workloads, on-demand applications and centralized processes are becoming the norm. As Hurd and others are pointing out, business C-suites want infrastructure that is adaptable, helps them remain competitive, enables innovation ahead of the market and, most of all, lowers costs.

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