This week
Oracle has made a significant investment in infrastructure, solutions, and go-to-market. More than many of its peers in the public cloud space, it has started to show results. In fact, in their most recent earnings announcement, Oracle's combined cloud offering which includes SaaS, PaaS, and IaaS, sales were worth $527m, up 2.1 percent from last quarter and accounted for nearly 6% of the total revenue.
Oracle is being ambitious by announcing that 95% of their horizontal applications and 25% of their vertical applications will be migrated to the cloud this year. The next wave of investment will be within vertical solutions. While this is consistent with market trends we have seen with other cloud providers, Oracle seems to be slower compared to the likes of
There is a big difference between simply web-enabling your applications and XaaS-enabling your solutions.
Smaller, more niche focused, cloud providers are driving much of the vertically integrated cloud solutions to market today and that is a threat to Oracle.
We believe many end-user customers will be reluctant to move their mission critical applications to the cloud right now due to challenges in performance guarantees (both from the service provider and the application) and the difficulty in developing a service level agreement (SLA) that will accommodate all parties. Oracle appears to be addressing some of this by allowing its customers to run the database on a general purpose infrastructure or with mission critical applications on a more proprietary, engineered system. Customers will need to have the ability to move back and forth between on-premise and the cloud as a hedge and Oracle seems to have recognized this.
Oracle’s cloud strategy is to be able to support any data, any scale, on premise and in cloud. As the database market evolved, Oracle has been a strong innovator for each generation of computing. For example....
In the early days of IT, client/server companies leveraged:
- stored procedures for data validation or access control mechanism (they were used to send instructions to relational databases)
- partitioning of data to make it more manageable and efficient
- parallel query for performing multiple data queries at once; and unstructured data or data without a data model
........ and the Internet brought us:
- online operations, which basically allowed administrators to move/update data while still allowing users access
- Real Application Clusters (RAC) which is the foundation for cloud-based database solution
- data guard which allowed the creation of standby databases for backup, etc.
- XML as a way to standardize on data formats
Now with the cloud, Oracle has introduced their multitenant architecture. This approach will be an option in Oracle’s new database, 12c. Leveraging most of their successful solutions of the past, this architecture allows an existing database to simply be “adopted” by an application without any changes having to be made on the application layer, presumed they are Oracle applications only.
This approach is very interesting especially in light of the challenges many application provides are having migrating their applications to the cloud. Challenges including data interoperability and integrity and hardware and operating system incompatibilities. Oracle’s multitenant architecture is designed to move from multi tenancy in the application and a schema per customer model to their fourth generation of DB solutions, called Multitenant PDB (Pluggable Databases), per customer.
Oracle’s Database as a Service (DaaS) has has multiple offerings and levels from Gold, Silver, and Bronze. Each has various capacity and capabilities up to their Exadata Edition which has up to 268 Oracle Compute Units (OCPUs), which equates to an
Through their RAC, Active Data Guard, Multitenant, and in-memory functionality, Oracle believes it is the best-in-class enterprise database for the cloud. They also state they are the only one with extreme performance and availability, and the only cloud offering with infrastructure optimized for database environments, both general purpose and engineered systems. There is always a bit of truth and hubris to these statements, but the idea that customers can have a “less-painful” migration between on-premise and cloud, with a single management console, makes them a compelling hybrid cloud option.
There is no doubt that Oracle could be a major player in the cloud market. Their messaging is precise, they always have strong customer validation and an aggressive and fearless executive team. That said, Oracle has done a good job of alleviating their vendor lock-in critique with on premise DB solutions, but they have yet to prove this in the cloud. Their Multitenant architecture is very promising but as the field opens-up it will be worth watching to see how they react. As stated earlier, it also remains to be seen how Oracle’s channel and service provider network will respond. Their recent announcement with
No one can deny that Oracle has always been a vanguard force to be reckoned with, and as to their success in the Cloud, we suspect it could be the same, but only if they address some of the issues.
You can find Patrick Moorhead, President & Principal Analyst of Moor Insights & Strategy on the web, Twitter, LinkedIn and Google+.
This column contains significant contributions from Christopher R. Wilder, Cloud Service and Enterprise Software Practice Lead, Moor Insights & Strategy