Sales of cloud-based software at Oracle (NASDAQ:ORCL) are undoubtedly still lacking, about only 10 percent of the company's total software revenue in fiscal 2014. However, Oracle's cloud delivery capability is everything but lacking, including the service potential of Oracle Mobile Platform. Realizing that enterprise mobile IT expenses will increase over time, evident from a recent Oracle-sponsored mobile IT survey, Oracle has been quietly and painstakingly building up its own cloud platform for mobile uses. Oracle Mobile Platform allows enterprises to source data in a cross-channel manner on both new mobile apps and old back-end programs and is for any mobile devices as supported by Oracle's integration services and security management.
Needless to say, the adoption of Oracle Mobile Platform by business customers has been slow so far, compared to what the system can fully handle, thanks to seemingly a disconnect between an enterprise's mobile-device uses among individual employees and initiations by management on company-wide mobile computing. Even though mobile devices and platforms are market ready with vendors like Oracle providing applications and in some cases, users self-developing own applications, businesses have to decide whether to use mobile computing as part of their enterprise IT structure. Companies can be inactive in making such moves, given the legacy enterprise computing systems they currently have in place. A push from mobile device and platform providers may help companies move faster towards their mobile IT adoption.
If a mobile platform is in the cloud and managed by the cloud provider, the starting point in mobile computing for an enterprise is actually the mobile devices they choose to use for accessing the cloud. While the any-device feature of Oracle Mobile Platform is certainly technologically advantageous, it may have in reality hindered the adoption of its mobile platform by business customers. Companies are used to purchasing packaged IT solutions and thus, having to do the patch work of bringing in mobile devices themselves to align with a separately implemented mobile platform just may increase a customer's perception of any potential inconvenience. If nothing else, the Apple-IBM partnership between providers of mobile device and mobile platform seems to have been proven this very point.
Faced with such a new, strategic business development from a main rival, Oracle will have to respond accordingly. Another competitor, Microsoft (NASDAQ:MSFT), even makes its own mobile devices that can be bundled into its mobile computing offerings to have a complete set of mobile apps, a mobile platform and mobile devices. In all likelihood, Oracle may have to tie up with a mobile device maker and use it as a springboard to really engage with potential business customers for their mobile cloud needs. Its current practice of waiting for customers to come onboard with its mobile platform using their own mobile devices hasn't worked out very effectively. Oracle needs to be more proactive in selling its mobile computing services to speed up the current adoption of its mobile platform and prevent more customers from signing up with competing, more of turnkey mobile offerings such as those from IBM or Microsoft.
With Apple device already tapped by IBM, and Windows device owned by Microsoft, to implement a potential mobile handset push, Oracle has essentially Android and/or BlackBerry (NASDAQ:BBRY) to work with. By comparison, Android devices by multiple venders may require more marketing efforts than BlackBerry from a single device maker. With the appeal of Oracle's business software, customers may have more interests in an Oracle-backed BlackBerry, which, despite its negligible market share, still has a lead position in enterprise mobile device management, an important aspect of mobile computing. BlackBerry would be an easy pick up for Oracle, given the target's current weak market position. The cooperation would also help BlackBerry sell more of its handsets. Such a potential alliance likely would work out rather favorable deal terms for Oracle, which usually doesn't overpay in business acquisitions.
Oracle may go even further to snap up BlackBerry's handset-making business outright, considering that Oracle is not a software maker without any hardware-making experience. There's a good possibility of that, as BlackBerry may be willing to sell its handset unit and retain only the enterprise mobile device management business, the focus of its current turnaround efforts. If BlackBerry is paying less attention to how its handset performs in the market and hasn't come up with a credible plan to revive it, why still keep the handset in the running within the company? It seems that BlackBerry has decided that it can build a mobile-computing IT business without having to associate with a particular mobile device.
One reason why no companies have come to BlackBerry's handset rescue is probably because no one believes they can make a mobile device work against Apple and Android in the consumer market. But now, the growing demand for mobile devices used in mobile cloud computing may provide a more leveled field in the enterprise market. With its strong presence in serving business customers in enterprise computing, Oracle is in an ideal position to introduce a business mobile handset and make it work seamlessly with its mobile platform. But the underlying benefit for Oracle would be that by pushing a mobile handset into its business customers' hands, Oracle could get more customers to adopt its mobile platform and sell a lot of business apps from the cloud.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.