Oracle Pitches Security of the Cloud to Software Clients

LAGUNA BEACH, Calif. -- The software services industry is in the midst of generational change, and Oracle Corp. has reacted by embracing the cloud.

The shift to selling web-based, on-demand computing services known as the cloud has changed the way Oracle is paid and has given the company new services to pitch to longtime customers, Chief Executive Mark Hurd said in an interview at the WSJ D.Live technology conference. The shift has helped send shares of the 40-year-old company to record levels.

Mr. Hurd said shifting corporate software systems to the cloud provides more security for companies than they can provide by managing systems themselves. He said that right now a patch for an attack on companies' own servers could take a year to reach every customer using that software.

"This is now becoming an issue for the CEO, for the board," Mr. Hurd said. "More CEOs need to understand what they can do to change the answer." He said the cloud offers ways to get a solution quicker than waiting a year for a patch.

"Our industry is going through a secular change that's generational," Mr. Hurd said. "What's happened over the last 20, 25 years in tech is all being challenged now, so for us, we're cannibalizing ourselves."

Oracle's shift to the cloud came last year as the company reported a decline in revenue for the year ended May 2016, its first in more than a decade. In its most recent quarter, total cloud revenue rose 51% year over year to $1.47 billion and made up 16% of total company revenue, up from 7% during the same period a year earlier.

Mr. Hurd expects more companies to shift their software operations to the cloud because providers like Oracle can provide security and encrypt information, making it difficult for hackers to access. He said Equifax Inc., the credit reporting company that was hacked earlier this year, was the "absolutely perfect target" for a hack because of its size and the "treasure trove of information" it had on file.

"The safest place for the data -- my opinion -- is in the places with the most skill, the most background and frankly the ability technically...to protect the data," Mr. Hurd said.

(END) Dow Jones Newswires

October 18, 2017 15:56 ET (19:56 GMT)