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Oracle Puts AWS in Crosshairs with IaaS Push

• By Jeffrey Schwartz
• 09/19/2016

Oracle is getting ready to mount a challenge against Amazon Web Services Inc. (AWS) for cloud infrastructure dominance, said Founder and CTO Larry Ellison.

Speaking at this week's Oracle OpenWorld conference, Ellison unveiled a new "cloud-first" focus at Oracle that will apply to everything from its flagship database server to its middleware and applications. Ellison also also announced Oracle's goal of becoming one of the largest cloud infrastructure service providers in the market.

It would be quite a coup if Oracle were to surpass AWS, which, with a run rate of $10 billion, is by far the largest public cloud infrastructure provider. Only Microsoft, Google and, to a lesser extent, IBM Softlayer have public cloud infrastructures that approach the scale and revenues of AWS. Even so, analysts agree that AWS has a strong lead over other vendors, including second-place Microsoft Azure.

Despite Oracle's resources, it faces significant challenges before it can threaten AWS, Microsoft and Google -- and that's assuming that customers are willing to embrace Oracle's Infrastructure as a Service (IaaS) platform.

"Oracle has a pretty substantial build-out ahead to compete with Microsoft and Amazon on the global scale in which those companies operate. That does not mean that they cannot compete in some geos effectively in the near term," said IDC analyst Al Gillen. "The company thinks it can disrupt incumbents on the basis of price. That's great, although basic IaaS without any value-add is ultimately a race to $0. I think it is important to be in that market segment to be seen as serious and competitive."

Indeed, while describing cloud compute and storage services commodities during his keynote, Ellison argued Oracle's cloud will cost less and offer better reliability than AWS. Ellison said Oracle is building out and upgrading its existing global datacenters with a new generation of availability zones, each consisting of three nearby facilities connected by fiber-optic rings with their own separate power supplies, allowing triplicate data in each availability zone.

"We have a modern architecture for infrastructure where there's no single point of failure," Ellison said. "Faults are isolated, therefore faults are tolerated. If we lose a datacenter, you don't even know about it."

Moreover, Ellison claimed Oracle's second-generation datacenters offer twice as many cores and memory as AWS, four times more storage and more than 10 times the I/O capacity at a lower cost.

"Amazon's lead is over," Ellison said. "Amazon is going to have serious competition going forward. We're very proud of our second-generation Infrastructure as a Service. We're going to be focusing on it and aggressively featuring it."

Oracle is also taking on Microsoft, Dell, Hewlett Packard Enterprise (HPE), Lenovo and VMware in the emerging market of pre-engineered on-premises cloud appliances with its Oracle Exadata Database Machine. Oracle Exadata Database Machine will allow organizations to run the Oracle cloud platform in the local datacenter, allowing customers to move data back and forth, Ellison said.

"If you run your Oracle database on-premise on your own hardware, you can move that data to our cloud," Ellison said. "The cloud and customer machines are identical. It will be 101 percent compatible."

Ellison also talked up the new Oracle 12c database (the "c" stands for cloud). It's designed for improved multitenancy and support for data sharding, where shards could represent database fragments, according to Ellison. Oracle 12c can process and synchronize hundreds or even thousands of shards, Ellison said.

"The new database has an in-memory option. We can now keep the column store in Active Data Guard [the fault-tolerance features in the Oracle database] and give huge performance increases. We think more and more people are going to go to in-memory database as memory gets cheaper and cheaper and cheaper," he said.