Oracle Cloud Set To Give Tough Fight To Amazon

by CXOtoday News Desk    Sep 20, 2016

Larry Ellison, Oracle’s former chief executive and current executive chairman and CTO has set an ambitious goal for company’s cloud business that intends to surge Amazon. Unveiling its second generation of cloud infrastructure, Ellison said that Oracle would soon give AWS stiff competition through its cloud infrastructure.

Oracle Cloud

Oracle has unveiled its second generation of cloud infrastructure for third-party developers to run their applications in Oracle data centers. The announcement was made at Oracle’s OpenWorld conference in San Francisco recently. Among the services unveiled Sunday is one called Cloud@Customer, which lets customers run servers identical to Oracle’s cloud infrastructure services within their own on-premise infrastructure. 

“We’ll put that part of the Oracle cloud behind your firewall, where it’s more protected and adheres to certain statutory requirements. The Cloud@Customer machines are identical,” Ellison reportedly said. 

Amazon, which debuted its Amazon Web Services (AWS) ten years ago, is currently the leader in the cloud infrastructure business. According to a recent report by the information technology research firm Gartner, AWS’ flagship S3 cloud storage service is 1.6 times as large as the other seven public cloud providers — a list consisting of Microsoft, Google, IBM, Alibaba, Rackspace, Oracle and AT&T.

In its latest quarter, Amazon’s Infrastructure-as-a-service (IaaS) business posted $2.89 billion in revenue — a jump of 58 percent over the same period last year. In comparison, Oracle’s cloud services netted $171 million in revenue in the three-month period ending August 31, 2016 — a 7 percent increase year-on-on year.

Ellison, however, remained undeterred, and touted his company’s IaaS as faster and cheaper than Amazon’s.

“Our Generation2 IaaS delivers twice the compute, twice the memory, four times the storage and ten times more I/O at a 20 percent lower price than Amazon Web Services (AWS),” Ellison said in a statement last week. “IaaS represents a huge new cloud opportunity for Oracle to layer on top of our rapidly growing SaaS [Software-as-a-service] and PaaS [Platform-as-a-service] businesses”, he added. 

Analysts remain skeptical whether Oracle can compete against Amazon, which has already spent billions in building massive data centers around the world to address customers’ cloud computing needs, even though Ellison said Sunday that his company was “aggressively moving into infrastructure.”

“[Oracle] talked up its ‘next-gen’ infrastructure as a cheaper rival to AWS, but we don’t believe it will be competitive anytime soon,” Deutsche Bank analyst Karl Keirstead wrote in a note Friday.