Oracle is launching a major push for the Infrastructure-as-a-Service (IaaS) market and it's aiming straight for the king. The newly announced Oracle Database 12c Release 2 is a supersized IaaS platform that Oracle founder and CTO Larry Ellison said is designed to compete directly with Amazon Web Services (AWS).
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Oracle broke into the IaaS market a decade late with the announcement of Oracle Elastic Compute Cloud last year. During his keynote at Oracle OpenWorld 2016 on Sunday, Ellison revealed the company's plans make up a marathon of ground by competing on both specs and price.
"Amazon's lead is over. Amazon is going to have serious competition going forward," said Ellison. "New second-generation data centers offer twice as many cores as Amazon, twice as much memory as Amazon, four times as much storage as Amazon, and more than 10 times the I/O capacity as Amazon...but you have to be willing to pay less."
Ellison was referring specifically to the Dense IO Shape, the new heavy-duty virtual machine (VM) in the Oracle Database 12c Release 2 lineup that offers 28.8TB of storage, 512GB of memory, and 36 cores at a price of $5.40 per hour. The catch with Oracle's IaaS declaration isn't just that it leads the space three times over, owning a 31 percent market share in Q4 2015 according to Synergy Research Group. Oracle Elastic Compute Cloud is in line behind a number of other players as well, with the fast-growing Microsoft Azure.
In research firm Gartner's latest Magic Quadrant report on the IaaS market, Amazon and Microsoft are listed as the two clear leaders, with Google Cloud Platform (GCP) a distant third. On the most recent report, Oracle didn't crack the list.
Lydia Leong, Vice President and Distinguished Analyst at Gartner and one of the co-authors of the Magic Quadrant report, said Oracle's new next-gen cloud IaaS offering is a substantial improvement over the existing Oracle Compute Cloud. For the moment, she said Amazon has nothing to worry about but that challengers in the space may see serious competition from Oracle.
"[Oracle's cloud] should still be regarded as the foundation of a future competitive offering rather than being a competitive offering today. AWS has nothing to fear from Oracle in the meantime," said Leong. "However, Oracle's initial bare-metal offering should be very competitive against IBM/SoftLayer bare-metal services and similar, more hosting-like services, as Oracle has a true cloud IaaS built on bare-metal—software-defined data center with full API control, provisioning in five minutes, and by-the-hour pricing."
Ellison's keynote acknowleged a shift away from on-premises that seemingly everyone but Oracle bought into a long time ago: standalone on-premises infrastructure is the past. Enterprises are now living in a world of IaaS and hybrid cloud deployments. Oracle is investing heavily in the technology but that doesn't equal instant market share.
"We're in the middle of a generational change as computing moves from on-premises; a lot of companies and data centers all over the world [are going] to super data centers called clouds. Our major competitors today are Amazon for infrastructure and Workday for applications. This coming year, you'll see us aggressively moving into Infrastructure-as-a-Service," said Ellison.
IaaS was the spotlight at OpenWorld, but Oracle announced new products and servies across its Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) portfolio as well. As Ellison noted, Oracle's PaaS and SaaS revenue was up 82 percent in Q1, projected for more than $2 billion in revenue this year.
Oracle also announced a new chatbot development platform for building and running enterprise apps that can integrate with services such as Facebook Messenger and Slack, which echoes similar recent moves by Facebook and Microsoft. Additionally, the company rolled out major improvements to the Oracle Analytics Cloud and launched Adaptive Intelligent Applications: apps that blend third-party data with real-time analytics and behavioral inputs to create "smart" cloud applications that adapt and learn (similar to the sort of enterprise AI capabilities Salesforce recently announced in its Einstein platform).
Ellison also announced Oracle's acquisition of Palerra, a cloud access security broker (CASB) platform, to add better infrastructure management and security with features like real-time incident response and stats on usage visiblity and user behavior. Oracle's strategy is clear: the company wants to bulk up its IaaS offerings to match its powerhouse PaaS and SaaS arms, and calling out Amazon sends a loud message to the cloud market. But, if you come at the king, you best not miss.