Eric Knorr: I would imagine most of that cloud growth has been driven by SaaS at this point.
MH: Both. It’s SaaS and PaaS.
EK: In the earnings release, Larry Ellison talked about your next-generation infrastructure-as-a-service offering and saying that Oracle will deliver twice the compute, twice the memory, four times the storage, 10 times more I/O at a 20 percent lower price than Amazon Web Services. How will you do that?
MH: A couple things. One is relative to somebody like Amazon, we actually own the entire stack, so we get the opportunity to bring in best-of-breed components but also to optimize them as an integrated system. We have a very large advantage in terms of the depth of our knowledge and our technology at each layer of the stack.
EK: By that you mean the hardware as well. Right?
MH: Really inside the hardware at the silicon layer -- the way we deal with silicon; the security in the silicon, the performance of the silicon. You really drive that and align that directly to the operating system or opportunity to be the leader in operating system technology, the ability to integrate that into Flash, the interrelationship not just into compute but storage as well. Obviously, our knowledge of database systems, authoring languages, Java. We have a tremendous stack that most people don’t. Most people are bringing in open source tools they didn’t build, tools they certainly didn’t optimize.
Second, we get the benefit of having run datacenters in SaaS and PaaS. We get the benefit of the next generation of datacenters, to Larry’s point. There is an advantage sometimes to being able to do something better than people did it the first time. That combination of our technology, our depth of knowledge -- we bring to this a lot of weapons to the fight.
EK: One of the things about IaaS is that it demands a huge investment in infrastructure, in building out the datacenter capacity to be able to compete. What kind of investment plans do you have to compete in IaaS?
MH: We have made a lot of investments. Today, we’re in 20-plus global datacenters. I’ve trotted around the world announcing datacenters over the last couple of years as we’ve opened them up and brought technology and capability to the market. Our capex has been significant. We continue to invest, but again, remember we get to invest against our cost base as opposed to somebody’s price base, so it’s a big advantage.
For example, if you’re Amazon, you’re going to buy virtually everything. You own nothing. When we buy an operating system it’s free. When we get a database, whether it’s MySQL, whether it’s the Oracle database, it’s free. When we get Exadata, it has a few components that we bring in and we buy it at cost. Our capex will never match the capex that you’ll see from somebody else because it doesn’t have to.
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