Google Chairman Eric Schmidt: Enterprises Love Tablets And That's A Surprise To Me

The tablet is the thing that's most threatening big enterprise software companies like Oracle, Google chairman Eric Schmidt said on stage at the Gartner Gartner Symposium conference happening this week in Orlando.

We've embedded a clip from that talk in the video below. He used a lot of techie terms so we'll decode it.

He said that we are witnessing the demise of the big software company, or at least their classic business model, invented by Oracle. That model involved selling software to enterprises for large chunks of money every few years. An enterprise would buy a software license that covered more employees than it needed and would then grow into it.

Oracle, SAP, and Microsoft still sell a whole lot of software that way.

But tablets are changing the way companies buy software, something that Schmidt says he didn't see coming.

"I was actually surprised by this. I didn't call this. Would the phone replace the PC? I figured employees would be using a PCs and a phone. But it was the tablet revolution. It looks to us like the majority of enterprise computing is being done on mobile devices, in particular on tablets. That broke the old model," he said.

He expects enterprises will have to "dismantle" their existing technology - in other words get rid of old-fashioned software and all the data center technology they've bought over the years to support it.

He didn't say what they'll replace this with, but presumably, simpler apps and software from the cloud.

Schmidt didn't go so far as to say that Oracle (or SAP or Microsoft) would be killed by the cloud. They obviously see the same thing coming and are all scurrying to offer their software via the cloud. Last month Oracle even announced it would be selling its flagship database software via its cloud.

And also remember that Google and Oracle don't like each other very much these days, ever since Oracle sued Google (and lost) over Android.

But we'll see. No big enterprise software vendor has yet really transformed itself into a cloud company. All of them are still heavily dependent on selling old fashioned software on old fashioned software licenses for most of their revenue.

Here's the video.