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For software giant Oracle, the cloud of doom

Oracle CEO Larry Ellison delivers a keynote address during the 2012 Oracle Open World conference on September 30, 2012 in San Francisco, California.

Global software giant Oracle will release its earnings report today. In the past, the company has made its money selling traditional hardware and software to businesses and governments, including servers and database software. But experts say that while smaller startups are already staking their claim in the cloud space, Oracle is slow to follow.

Scott Pierce this year launched a cloud startup called 45000 Feet. He says one of the benefits in moving to the cloud is that a company pays only for what it needs.

"If you do only get 10 users, you're only going to pay for enough infrastructure to support those 10 users," Pierce says. "If you get 100,000, you're going to pay more but you're gonna have the ability to service those 100,000 users the way they expect to be serviced."

One mission of Pierce's company is to convince businesses that they don't need a big room full of servers, a concept that goes directly against Oracle's business model.

Krishnan Subramanian, a technology analyst, says when it comes to shifting to the cloud, Oracle is way behind its competitors, even old-timers like IBM.

"They are doing a catchup game right now and they have a long way to go before they can become a leader," Subramanian says.

Oracle declined to comment for this story.

Subramanian says for now, at least, the tech giant is bundling its cloud services so that customers also have to buy database software, which for Oracle, is still where the money is.

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