Oracle moves its business software into the cloud

Oracle Corp. is in no danger of fading away anytime soon. The company remains of the of the world’s most successful software makers, with annual revenue of about $37 billon and a market value of $137 billion.

But the 67-year-old Ellison, an elder statesman among Silicon Valley’s CEOs, doesn’t want to risk becoming obsolescent. He is trying to stay a step ahead of longtime rival SAP as it also embraces cloud computing. Oracle also is trying to catch up to one of Ellison’s former proteges, Marc Benioff, who is now CEO of Salesforce.com, which many universities use to track and manage constituent relations. Not long after leaving Oracle to start Salesforce, Benioff emerged as cloud computing’s more persuasive evangelist.

Salesforce.com is expected to generate $3 billion in annual revenue this year and has a market value of $19 billion.

Ellison, who has an estimated fortune of $36 billion, was one of Salesforce’s earliest investors. He also owns a 46-percent stake in a Salesforce rival, NetSuite Inc., run by another former Oracle executive, Zach Nelson.

Oracle’s expansion into cloud computing also puts Ellison on a collision course with an old antagonist, software entrepreneur David Duffield. Ellison bought Duffield’s former company, PeopleSoft, for $11.1 billion in 2005 after a bitter takeover battle that lasted 18 months. Duffield has since started a cloud-computing service called Workday that sells human resources management tools.

Ellison predicted Oracle eventually will trump Salesforce and Workday by offering a wider and more secure range of services that will fulfill all the cloud computing needs of large companies, government agencies, school districts, and universities.

Oracle’s new services include “”social relationship management” tools to analyze what people are saying on Facebook’s social network and other online forums such as Twitter.

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