Sunday, June 10, 2012

Organizational Agility, Oracle, and Cloud Computing

In the McKinsley Quarterly article, “ Competing through Organizational Agility” Donald Sull identifies three types of agility: strategic, portfolio, and operational. Organizational agility as defined in the article as the capacity to identify and capture opportunities more quickly than rivals do.

A recently published article on the New York Times online talks about Oracle as a new entrant into the cloud computing. Currently Amazon Web Services is a major player in cloud computing, but Oracle sees a potential strategic opportunity and is making noise.

I feel Oracle is exercising strategic and portfolio agility in this case. I wouldn’t say they are choosing to rely on a single form of agility, but rather a hybrid of the before mentioned type types.

Mark V. Hurd, Oracle co-president, in a recent interview stated, “Unlike anyone else, we are supplying every layer in the stack” of technology that makes up cloud computing. If you don’t get every part right, you are in deep trouble.” Since building it, we’ve been very focused on engineering the system, educating the market on its value,” he said.

Hurd may be “probing for opportunities” in this case due to the uncertainty of where cloud computing is headed, but one thing is for sure, he wants Oracle to be the leader. Also seeing that Oracles Oracle’s fiscal 2011 revenues were $35.6 billion, they are able to “stay in the game” as cloud computing continues to find its place in the market.

In relation to portfolio agility, Hurd has strengthened Oracle’s sales and marketing forces by adding 2,000 positions. Hurd said, “Oracle would offer service guarantees, including personal response, within five minutes. Oracle will also allow customers to mix in other vendors’ products. The performance guarantees, however, will apply only when customers buy everything from Oracle.”

Hurd appears to be all-in as he has already reallocate staff and his people. One could also argue that this is simply Oracle making noise and promising services that it is not yet able to provide. Is cloud competing considered a game-changing opportunity for giants like Oracle and SAP? What do you feel caused Oracle to shift its attention toward the cloud?

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