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Larry Ellison: SaaS doesn't fetch enough money

Oracle CEO and multi-billionaire technology investor Larry Ellison has dismissed the software-as-a-service industry as unprofitable.

Although his company made money from its on-demand applications business for the first time in its fourth financial quarter, Ellison said that the model had yet to become the profit driver that many had predicted.

“We continue to get better at it and grow the business,” he said in an earnings call yesterday. “[But] it’s not really growing any faster than our overall business.”

“We think that’s going to change over time,” he continued. “But the entire on-demand industry has to get better at making money in selling on-demand software.”

He pointed to the example of Salesforce.com, the on-demand CRM provider founded by a former Oracle executive, in which Ellison has a significant investment. “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,” he said.


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