Old-school vendors share in Oracle's cloud troubles

In the cloud era, it’s getting tougher and tougher to make it as a traditional enterprise software vendor.

The latest example: Oracle. In the last quarter, rapid growth for Oracle’s cloud services wasn’t enough to offset the slowdown in sales of its traditional wares; the cloud accounts for only 8 percent of the Oracle business.

The trouble at Oracle is the same trouble experienced by IBM, EMC VMware, Dell, and so on: As more and more enterprises view public clouds as the go-to solution, the news gets worse and worse for the traditional big names.

Even if traditional providers move into cloud services, each dollar of cloud services they sell comes at the expense of not selling $2 of the legacy stuff. In essence, these enterprises cannibalize their old-school business model, especially those sweet high margins.

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