As Oracle Rounds Out its Cloud Strategy, Amazon Web Services Looms

Reversing years of cloud-bashing, Oracle CEO Larry Ellison added an infrastructure as a service (IaaS) component to the company's cloud portfolio this week at Oracle OpenWorld, rounding it out the company's strategy to include the three major cloud platforms, including SaaS and PaaS. But will anyone outside of existing Oracle customers use it?

By Brandon Butler
Thu, October 04, 2012

Network World — Reversing years of cloud-bashing, Oracle CEO Larry Ellison added an infrastructure as a service (IaaS) component to the company's cloud portfolio this week at Oracle OpenWorld, rounding it out the company's strategy to include the three major cloud platforms, including SaaS and PaaS. But will anyone outside of existing Oracle customers use it?

Various analysts attending the show in San Francisco this week question if the offering has much appeal outside of existing Oracle customers. Mark Bowker, an analyst that Enterprise Strategy Group, says that's OK though: "Oracle's a pretty big company," as evidence by the estimated 50,000 attendees at this year's OpenWorld show, and the company's consistent multibillion-dollar quarterly revenue figures.

As Oracle rounds out its cloud strategy though, what many consider the market leader in this space, Amazon Web Services, came out with its own news this week too, giving customers a free tier to use Oracle databases in its cloud.

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Details are still scant about the IaaS offering from Oracle, as Ellison in his keynote address on Sunday failed to disclose pricing or timing of when the IaaS layer would be released. But he did outline the broad strategy the company is pursuing: Give customers access to utility computing models to help them drive efficiencies. Oracle's public IaaS cloud will be based on the company's Exalogic hardware, while a similar private cloud offering will be available for customers, with an extra wrinkle. Keeping with this theme of a utility computing model on the private cloud side, Oracle proposes to install Oracle-owned and operated equipment on customer data center sites, and only charge customers based on their usage.

Forrester cloud analyst James Staten says the private cloud strategy is not an original concept: CSC, HP and Dell each have similar offerings. And that's a problem for Oracle, he says. At this point, there are no "wow" features that differentiate Oracle's cloud from any other clouds already on the market, other than the fact that it's all Oracle hardware and software, Staten believes. Without further differentiation, he expects the market impact of Oracle jumping into the cloud game to be minimal. "As with everything from Oracle their cloud services are optimized around Oracle products and technologies, so if you are an Oracle strategy partner and want to use more and more Oracle in your business, then that's where the appeal would lie," he says. "But we have far more customers trying to minimize their dependence on Oracle than wanting to rush into their arms."

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