In Oracle’s cloud pitch to enterprises, an echo of a bygone tech era


News analysis

Oracle Corp. sought to position itself once again today as the one best place for everything companies need to move to cloud computing.

Speaking at a media day Thursday at its Redwood Shores, California, headquarters, executives at the database and business software giant distanced Oracle from public cloud leaders such as Amazon Web Services, Google Cloud Platform and Microsoft Azure that provide computing, storage and other services to corporations looking to reduce or eliminate their data centers.

“Our cloud is more comprehensive than any other cloud in the market today, a full end-to-end cloud,” said David Donatelli, Oracle’s executive vice president of converged infrastructure. “We design from the chip all the way up to the application, fully vertically integrated.”

What’s interesting about that messaging, which Oracle has been refining since at least its OpenWorld conference last September, is not simply the competitive positioning. Oracle is essentially saying that the nature of cloud computing suggests customers need to move away from the notion that has dominated information technology since personal computers and PC-based servers began to displace mainframes and minicomputers: cherry-picking the best applications and hardware and cobbling together their own IT setups. In short, Oracle contends, it’s time for another broad swing back to the integrated, uber-suppliers of a bygone era of technology.

Of course, the new tech titans such as Google, Facebook Inc. and Inc. arguably wield as much power in their particular domains of advertising and e-commerce as the Big Blue of old. But it has been a long time since a soup-to-nuts approach has worked for enterprise tech companies, and for those few still attempting it, such as Dell Technologies Inc. and Oracle, it’s far from obvious it will work.

The cloud, Oracle contends, may well change that. Oracle Chief Executive Mark Hurd (pictured) made the argument to interviewer Kara Swisher Thursday that Silicon Valley has too long been focused on supplying “piece parts” — discrete personal computers, servers, storage devices, networking gear and more. No longer do customers want to, or need to, manage all that themselves. “That’s why the cloud is so attractive,” he said.

At least one customer, albeit one hand-picked by Oracle to talk at the media day, backed up that assertion. Rob Pietsch, senior director of sales at Twitter Inc., said the plethora of cloud technologies in the market means “you can go out and assemble stuff from 20 different companies.” But he added that having a platform like Oracle’s “that you know will integrate … and other things will integrate well with it, that’s what a platform is supposed to be.”

The return of lock-in?

On the surface, the notion of one cloud to rule them all seems to work against one of the appeals of the cloud: the ability to run discrete applications at will, without being locked into one supplier of a particular technology. Lock-in, in fact, is one of the prime complaints of many customers about Oracle: Once they have their data on its databases, paying for a software license, it’s very difficult, expensive and risky to move it onto another database. Skeptics wonder if Oracle is simply trying to retain that lock-in in the cloud era.

In fact, said longtime analyst Dave Vellante, founder of the analyst group Wikibon, owned by the same company as SiliconANGLE, Oracle is basically “giving away” its infrastructure-as-a-service — base-level computing and storage services — where it trails furthest behind the cloud leaders in a bid to keep customers on Oracle. “Oracle’s cloud-native chops and developer affinity are nowhere near as strong as AWS or Microsoft,” Vellante said. “But they have more value up the stack in database and apps than any cloud vendor. So the strategy is great.”


Oracle Executive Vice President David Donatelli

But Oracle’s position is not entirely self-serving, either. Data is increasingly intrinsic to many new cloud software applications that require huge amounts of it to do things such as divine sales trends, target likely customers or do speech and image recognition. But that data is slow and costly to move between corporate and public cloud data centers around the world. So it’s rational for the legions of longtime customers of Oracle’s database and business applications to be attracted to Oracle cloud services that don’t require a wholesale “lift and shift” of their data center technologies.

Nor is Oracle alone here. Even as it and the other public cloud suppliers insist they’re “open” to providing access to other companies’ and to free open-source software, the fact remains that it’s easier for customers to go all-in with a particular cloud. “AWS is pretty integrated, as is IBM and even Microsoft,” said Vellante.

Even companies that use multiple clouds generally settle on one main supplier, using others to provide specific technologies such as Google Inc.’s machine learning or to serve as backups in case of inevitable outages. Perhaps in vain, they’re also hoping that multiple suppliers will keep the main one honest.

Playing catch-up

Interestingly, because Oracle is playing catch-up from far behind AWS, Google Cloud, Microsoft Azure and even IBM, it’s offering links to enable data to move to, and especially from, other clouds. Its cloud network, for instance, has various kinds of data centers to connect to other clouds through data center operators such as Equinix Inc. so data can be moved more quickly, said Thomas Kurian, president of Oracle product development.

Oracle even goes as far as to insist that it’s more open than the others because it allows most any software, including open source, to run on its cloud. “Amazon software runs only on Amazon,” said Andy Mendelsohn, executive vice president of Oracle’s database server technologies. “You can’t run those applications anywhere else.”

Whether or not Oracle can credibly claim it’s more open, the pitch is resonating with some customers. For instance, Mendelsohn said it figured in today’s announced deal for AT&T Inc. to put the huge amount of data it currently has on Oracle’s databases to its cloud infrastructure- and platform-as-a-service. “One reason we got it was AT&T really appreciated the openness of our technology,” he said.

Not least, Oracle claims that it can uniquely serve the many large enterprises that are unlikely to risk moving all their operations to the public cloud because of legal, governance or other factors. “Most of our competitors are either all in the premises or all in the cloud,” Hurd said. “The fact that we can do both… is a key differentiator.”

Still, Oracle faces the enormous weight of a decades-long move away from vertically integrated suppliers of technology. It’s not clear that the cloud really changes that imperative. Longtime tech buyers still resent getting locked into IBM mainframes and Oracle databases.

“Oracle has an end-to-end and best-of-breed strategy,” said SiliconANGLE Media co-chief executive John Furrier, who also attended the media day. “But the new ethos in cloud is not that one supplier will own the end-to-end architecture.”

Photos: Robert Hof