News

Oracle Enters Datacenter Build-Out Race with Major Cloud Push

• By John K. Waters
• 02/16/2018

In one of its most ambitious infrastructure projects to date, Oracle this week announced plans to quadruple its current cloud footprint by building 12 new datacenters across Asia, Europe and the Americas.

The move is widely seen as a direct challenge to current cloud-infrastructure leaders Amazon Web Services (AWS), Google and Microsoft. The company is planning new locations in Asia, including China, India, Japan, Saudi Arabia, Singapore and South Korea; Europe, including Amsterdam and Switzerland; and North America, including two in Canada and two new U.S. locations to support U.S. Department of Defense workloads.

Oracle announced its plan on Monday at the Oracle CloudWorld event New York. "The future of IT is autonomous," said Oracle CEO Mark Hurd in a statement. "With our expanded, modern datacenters, Oracle is uniquely suited to deliver the most autonomous technologies in the world. As we invest, our margins will continue to expand. And with our global datacenter expansion, we are able to help customers lower IT costs, mitigate risks and compete like they never have before."

Tim Beerman, CTO of Ensono, an Illinois-based hybrid IT services provider, sees Oracle's announcement as "a bold move" necessary to establish itself as a "fourth contender" in a market currently dominated by three players. "Succeeding and [leading] in the public cloud requires a significant commitment," he said in an e-mail, "so Oracle will need to participate fully and invest; these new datacenters lay the foundation for that. Only time will tell whether or not this move is enough to gain momentum in the uber-competitive cloud market."

AWS commands a huge lead in the cloud infrastructure market with a 44 percent share, according to analyst firm Gartner. Its closest competitor, Microsoft, currently accounts for a mere 7.1 percent.

Rob Enderle, president of technology research firm The Enderle Group, sees Oracle's announcement as less a bold move and more sleight of hand.

"This is mostly smoke and mirrors, because they haven't even really started building the needed datacenters yet," Enderle said. "What Oracle is doing is trying to raise consideration and stall the market, at least with their customers, until they can get something built and implemented. They realized way too late that if Microsoft and IBM in particular capture these customers on Azure or SoftLayer, those firms have a far stronger competitive migration argument to get those customers off Oracle entirely. Oracle is working desperately to make sure that this doesn't happen, but they likely started about four years too late."