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Why Larry Ellison’s continued criticism of AWS is tech’s biggest case of fake news

James Henderson | March 17, 2017
In this case, cloud is centrepiece and Oracle is the culprit.

But as Synergy Research suggested, Oracle and Alibaba continue to grow at “impressive rates”, suggesting future potential for the tech giant.

“Both our SaaS and PaaS businesses are doing great, but I’m even more excited about our second generation IaaS business,” explained Ellison, during the vendor’s recent Q3 FY17 earnings call.

“Our new Gen2 IaaS is both faster and lower cost than Amazon Web Services. And now our biggest customers can run their largest and most demanding Oracle database workloads in the Oracle Cloud - something that is absolutely impossible to do in the Amazon Cloud.”

Previously branded a ‘Grade A jerk’ by industry observers, Ellison’s misguided attempts to bring down the undisputed leader in cloud computing - by virtue of cold hard facts - is undermining Oracle’s genuine advancements in the industry.

Yet in cutting through the nonsense, even Ellison’s biggest critic cannot argue that Oracle’s recent quarterly earnings call piled on the proof points that the vendor’s cloud business is here to stay.

Specifically, the vendor reported credible cloud SaaS and PaaS revenue increases of 73 per cent year on year, reaching US$1 billion as a result for the quarter.

“With legacy business declines inevitable and most pronounced on the applications license and hardware segments, Oracle executives continued to highlight new customers and growth in all areas of cloud,” Technology Business Research Analyst, Meaghan McGrath, observed.

For McGrath, one notable change in the messaging came from Ellison specifically, who evolved on his original stance that the opportunity in PaaS was bigger than that in SaaS, to now assert that early traction of the second-generation IaaS indicates the IaaS business will “be leading the way in the future” as the largest of all.

This rapid growth is, according to Ellison, set to take place over the next five years as the majority of Oracle database customers maintain and lift their licenses to Oracle IaaS amid other vendor workloads also being moved to the infrastructure.

“It is increasingly evident that while Oracle’s initial push into the cloud market was to protect the more immediately threatened applications install base, the company has been able to acquire and build its way to a successful SaaS portfolio that it expects will once again pale in comparison to its database install base’s move to the cloud,” McGrath added.

In examining the facts, it’s clear that Oracle is building a genuine cloud practice in the hope of providing credible market competition.

But what isn’t clear is why Ellison believes hammering the clear market leader without merit is a viable strategy.


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