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Oracle’s push into cloud solutions

I watched Larry Ellison’s keynotes at this week’s Oracle Open world conference in San Francisco. They are definitely serious in pushing their cloud offerings, even though they came in late. But Oracle claimed that they have been working on it for almost ten years. The big push is at all 3 levels – SaaS, PaaS, and IaaS. The infrastructure as a service claims faster and cheaper resources (computing, storage, and networking) to beat Amazon’s AWS. They make a good point on better security for the enterprises, given the risk of security breaches happening at greater frequency lately. One comment I have is that AWS is beyond just IaaS, they are into PaaS as well (e.g. Docker services, etc. for devops). Oracle’s big advantage is in offering SaaS for all their application suits – ERP, HCM and CRM (they call it CX as customer experience). This is not something AWS offers for the enterprise market, although apps like SalesForce and Workday are available. Microsoft has Dynamics as an ERP on their cloud.

I do agree that Oracle has an upper hand when it comes to database as a service. Larry showed performance numbers for AWS Redshift, Aurora, and DynamoDB compared to Oracle’s database (much faster). They do have a chance to beat AWS when it comes to serious enterprise-scale implementations, given their strong hold in that market. Most of these enterprises still run much of their systems on-premise. Oracle offers them an alternative to switch to the cloud version within their firewall. They also suggest the co-existence of both on-prem and cloud solutions. The total switch-over to cloud will take ten years or more, as the confidence and comfort level grows over time.

AWS has a ten year lead here and they have grown in scale and size. The current run rate for AWS is over $10B in revenue with hefty profit (over 50%). However, many clients complain about the high cost as you use more services of AWS. Microsoft Azure and Google’s cloud services are marching fast to catch up. Most of the new-age web-companies use AWS. Oracle is better off focusing on the enterprise market, their strong hold. Not to discount IBM here, who is pushing their Soft Layer cloud solutions to the enterprise customers. Mark Hurd of Oracle showed several examples of cloud deployment at large to medium size companies as well. One interesting presence at the Open World yesterday was the chief minister (like a state Governor) of the Indian state, Maharashtra (Mumbai being the big city there). He signed a deal with Oracle to help implement cloud solutions to make many cities into “smart” cities and also connecting 29000 villages digitally. This is a big win for Oracle and will set the stage for many other government outfits to follow suit.

I think more competition to AWS is welcome, as no one wants a single-vendor lock-in. Mark Hurd said that by 2020, cloud solutions will dominate the enterprise landscape. The analysts are skeptical on Oracle’s claim over AWS, but a focused Oracle on cloud is not to be taken lightly.

Jnan Dash

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Jnan Dash is Senior Advisor at EZShield Inc., Advisor at ScaleDB and Board Member at Compassites Software Solutions. He has lived in Silicon Valley since 1979. Formerly he was the Chief Strategy Officer (Consulting) at Curl Inc., before which he spent ten years at Oracle Corporation and was the Group Vice President, Systems Architecture and Technology till 2002. He was responsible for setting Oracle's core database and application server product directions and interacted with customers worldwide in translating future needs to product plans. Before that he spent 16 years at IBM. He blogs at http://jnandash.ulitzer.com.

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