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Oracle Exec: All Our Apps Will Be Cloud Apps

January 20, 2016, 4:34 PM UTC

Oracle is treading a fine line in its conversation with big customers that run its enterprise software applications in-house.

The database-and-applications giant says it will continue to support those legacy applications—things like E-Business Suite, Hyperion, and Siebel that run on customers’ servers. But, going forward, it fully expects all of those applications—100% of them— to move to the cloud.

“It’s not a question of if, but when,” Steven Miranda, Oracle’s executive vice president of applications development, said at an event in New York on Wednesday.

“That doesn’t change our commitment to keep supporting those on-premises products for as long as you choose to use them,” he told a couple hundred customers, reporters, and analysts. He noted that the Oracle Applications Unlimited promise to keep supporting legacy apps remains unchanged, but that economics will prompt customers to make the cloud transition.

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Earlier at its Oracle (ORCL) CloudWorld event, company co-CEO Mark Hurd said the changing demographic of workers means companies have to be nimbler and more efficient in hiring and managing new employees. That means increased use of subscription software services, a category known as software-as-a-service, pioneered 16 years ago by Oracle rival Salesforce (CRM).

In SaaS, a third-party vendor, be it Salesforce, Oracle, Microsoft (MSFT), Workday (WDAY), etc. maintains the servers and storage for the customer, taking care of hardware upgrades and application and security patches so the customer’s IT staff doesn’t have to.

Oracle reports good, but not yet good enough, cloud growth.

New-age companies and the preferences of the millennial employees they need to employ make this move to cloud mandatory, Hurd said.

“Oracle has 145,000 employees and not every one of our processes is perfect. How do things get done? Managers know how, there’s tribal knowledge about how things work that aren’t perfectly automated.”

Modern companies don’t have that luxury—if that’s the right word.

“Imagine Uber,” Hurd noted. A company like that has to bring a new employee on-board and to work fast, in an hour or so. Then, that employee might last six weeks and Uber has to repeat that process over and over. “Can that process be imperfect? No.”

Some customers may be nervous about that “we’ll support you forever” promise because the pressure on Oracle to consolidate to cloud is already high and will only get more intense. And many of Oracle’s licensing negotiations with big customers have been tense for years already.

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Companies irked by Oracle’s hard-ball tactics in the on-premises software world may not be excited to replicate that experience in the cloud.

But as Amazon (AMZN) Web Services and Microsoft continue to build out formidable cloud arsenals, Oracle has realized it has to double down in cloud, and persuade its existing customers to use cloud versions of its products and recruit some newbies as well. Road shows like this one are the result.