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Does Oracle have a shot in the public cloud vs. Amazon and Microsoft?

Brandon Butler | Sept. 23, 2016
Starting from scratch, Oracle’s got a solid foundation, but a long way to go, analysts say

Larry Ellison has voiced fighting words at Oracle’s OpenWorld conference this week, announcing that Amazon Web Services’ lead in the IaaS market is over and that AWS will have “serious competition going forward.”

But does Oracle actually have a shot versus AWS and the company many see as the second place vendor, Microsoft?

“It depends,” says Gartner distinguished analyst Lydia Leong, author of the annual Magic Quadrant benchmark report for the public Infrastructure-as-a-Service cloud market.

On the plus side, Oracle has a large installed base of customers to sell its IaaS offering to. Despite losing some business to NoSQL newcomers, Gartner research shows that last year Oracle was still the top database management market vendor with 41.6% share in that $36 billion industry; Oracle’s a top 10 SaaS vendor too, according to Synergy Research. But the infrastructure cloud market is a different game, one dominated by AWS, Microsoft’s Azure and Google Cloud Platform. The Cloud Security Alliance estimates that those three vendors hold 82% share in the $22.4 billion IaaS market. Oracle is joining a crowded field of vendors looking to catch up with those top cloud providers.

Oracle has multiple positive attributes going for it in its fight for market share in the IaaS market. First of all, it’s got cloud industry talent, the result of a hiring binge over the past few years. Oracle’s senior vice president for cloud development is Peter Magnusson, a former Google engineer, and its vice president of engineering, Don Johnson, spent eight years at Amazon helping build AWS.

“They understand how to build a functional cloud,” Leong says about Oracle’s brass.

But Oracle is building an IaaS cloud from scratch, so the company has a long way to go. Last year at OpenWorld - nine years after AWS introduced its Elastic Compute Cloud - Oracle launched its IaaS cloud, which included virtual machines, databases and storage. This year Ellison unveiled what he called Generation 2 of Oracle’s public cloud.

Leong says what Oracle has built thus far basically amounts to a minimally viable product to begin competing with AWS, Microsoft, Google, IBM and the others already gunning for IaaS workloads.

“Today you should think of the new Oracle cloud IaaS as a significant improvement over what they had, a foundation that it looks like they’ll be able to build upon that’s been well executed in a relatively short amount of time,” Leong says. “It’s many years behind AWS and Azure, and it’s behind Google. But it’s a fundamentally sound approach.”

Oracle cloud: Generation 2

Generation 2 of the Oracle cloud has a handful of components beyond the basic virtual machines, block storage and database as a service offerings of the Generation 1 product. The virtual network controls physical hosts, providing customers with what Oracle claims are high input/output transaction speeds and low latency. A “flat” network – as opposed to a spanning tree network – means no two compute or storage nodes are more than two hops away from one another, says Deepak Patil, vice president of development at Oracle, who was formerly general manager of Microsoft cloud infrastructure. Connections between any two compute or storage nodes are all within 100 microseconds in each Oracle Availability Domain. Other components of the cloud include:


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