In stark contrast to its marketing cloud competitor Adobe’s record stock price last week, Oracle’s shares plummeted to their lowest price level of the year, hitting $40.32 on Friday.
The dip at the stock market came soon after Oracle posted its earnings for financial Q4 2014, which missed analyst’s expectations.
On the earnings call with analysts and investors, Oracle CEO Larry Ellison took great pains to explain the slow revenues were a result of the company’s full transition to the cloud, and moving from a licensing to a subscription based revenue model would take time to generate the big money.
“We get about the same amount of money from a subscription after three years as we get from a license, But some subscriptions can last as long as 20 years,” said Ellison in response to one analyst’s question about revenue recognition. “So we are going to recognize the revenue more slowly. … That’s okay, because in the long term we make much, much more money. And we can effectively compete against this whole new array of competitors like Salesforce and Workday.”
Unlike other platforms that have built solutions for the cloud from the ground up, much of Oracle’s clout in the space has come from its many acquisitions. Its marketing cloud especially, consists of blockbuster acquisitions of marketing automation software such as Eloqua, Responsys and most recently data platform BlueKai. Ellison was bullish about Oracle’s cloud prospects, saying the company’s marketing cloud was clearly a market leader.
“I think we are recognized clearly as the leader in marketing and of course our marketing suite – Gartner recognizes that as the leader in marketing in the cloud, we are the upper right hand company,” said Ellison. “And we had great growth in marketing and we are getting traction both in B to C, and B to B end marketing doing very, very well.”
Oracle president Mark Hurd chimed in by listing a few of the big name clients that were now using Oracle Marketing Cloud.
“We won Kaiser, ITEN, LexMark, Panasonic, Thomson Reuters, Time Warner Cable, Ricoh, I mean these are all quality names that have adopted Oracle marketing,” said Hurd.
However, it’s important to keep in mind that Ellison is talking about the success of the individual marketing solutions, rather than the marketing cloud as a whole. Oracle is now home to both Eloqua and Responsys, two marketing automation solutions that are indeed marketing leaders. But to say Oracle’s Marketing Cloud is a leader on its own isn’t quite accurate, since a) It’s too early to identify a leader since no company is offering an entire, completely integrated suite of marketing solutions (although I did take a stab at it identifying who’s winning the race) and b) Oracle only formally announced the launch of its Marketing Cloud last month, and it’s still got a long way to go when it comes to integrating its products.