Sometimes it’s hard to know how to take Ellison’s missives on SaaS. Bear in mind that Ellison, the CEO of Oracle, is also the founder and largest single shareholder in Netsuite (and also a major shareholder, for good measure in, salesforce.com which was founded by an ex-employee of his).

In his latest earnings call, Ellison said that the entire SaaS industry is unprofitable. He comments on the performance of salesforce.com, saying;

If you look at the leader, Salesforce.com, they don’t make very much money and they’ve been at it for almost 10 years, It’s hard to point to any software-as-a-service provider that’s doing a good job of improving its profitability

He gets a little conciliatory about the future prognosis saying;

We continue to get better at it [building revenue] and grow the business, [But] it’s not really growing any faster than our overall business. We think that’s going to change over time. But the entire on-demand industry has to get better at making money in selling on-demand software

Seems like Ellison likes to cover all his bases, it’s hard not to think however that his comments aren’t helpful for his own SaaS holdings, and even less helpful for the myriad of SaaS start-ups out there trying to get a toe in the door – especially those trying to give enterprise a nudge.

Larry – a little more positivity please!

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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