Friday, 28 September 2007

Oracle Chief Says SaaS Doesn’t Pay

If Oracle founder Larry Ellison is to be believed, Software as a Service doesn’t pay and that’s the reason despite SAP’s high fi entry into SaaS domain, Ellison doesn’t want to enter this segment.

Larry Ellison told financial analysts in a quarterly earnings call yesterday that Oracle hasn't participated in the software-as-a-service trend because there's no money to be made there.
What hurts Ellison is the fact that at by using SaaS, customers would pay less to Oracle and also there’s no licensing fees, integration fees, and no big up-front license fees, wo Oracle doesn’t get to make much money here.

Ellison called subscription-based software "very interesting, but so far no one has figured out how to make any money at it." However Ellison is actually waiting to see if SAP, that entered SaaS market with its own offering ‘Business By Design’ two weeks ago, makes some money. If it does, then Oracle will start its version of SaaS offering.