UPDATED 23:47 EDT / FEBRUARY 01 2018

CLOUD

Oracle Cloud may be a niche player now, but it’s looking to bust out

With a mere 2 percent of the foundational infrastructure-as-a-service cloud market, Oracle Corp. has often been typed as a niche cloud player.

The company can pursue enterprises, particularly those in its extensive customer base, that want a staged migration to the cloud. It can offer an extensive portfolio of software-as-a-service applications and position itself as a significantly lower-cost cloud alternative. But can it really compete in the infrastructure market with Amazon Web Services Inc., with 44 percent of the market, much less Microsoft Corp.’s Azure and Google Cloud Platform?

The message from company executives at Oracle Cloud Day in San Francisco today was clearly that the company intends to do a lot more than compete. Oracle believes that the cloud journey follows a route with many paths and the company that ultimately prevails will be the one that offers something at every junction along the way.

“We look at it as all layers of the stack,” Steve Daheb (pictured), senior vice president of Oracle Cloud, said during an exclusive interview with SiliconANGLE following his keynote address in San Francisco. “If we play in every niche, are we a niche player?”

Oracle Cloud makes its case by offering customers an opportunity to start anywhere they prefer. Not sure about private cloud versus public so a hybrid solution is best? No problem. Looking to build and deploy new apps across the infrastructure? Step right up. Need artificial intelligence tools to drive business? Come on down.

“This is all about enabling business transformation,” Daheb said during his keynote remarks at the start of the one-day conference. “We know a thing or two about transformations because we’ve gone through a few of them ourselves.”

Experience in the evolution of information technology is a not-so-subtle reminder by 41-year-old Oracle that it has been around longer than most of its competitors. Daheb said cloud migration is simply another part of the change management dynamic experienced by most companies. “When you think about moving to cloud, change management is one of the biggest aspects of that,” Daheb said. “We’ve gone through it.”

Competing on cost

One of the key challenges in change management is cost control. Major changes in the information technology infrastructure can rack up a big bill very quickly. Oracle is not shy about insisting that its cloud solutions cost significantly less.

“For a dollar you might spend with Amazon, it’s going to cost two cents with us,” Daheb said. AWS has denied that it’s more expensive, and given the innumerable variations each company offers and the wildly varying workloads placed on them, it’s difficult to make apple-to-apple comparisons.

But several of the use cases presented on Thursday featured customers who saved significant amounts of money by migrating to the Oracle Cloud platform. The United Kingdom’s National Health Service, the largest single-payer healthcare system in the world, turned to Oracle Cloud for assistance in using advanced analytics in the evaluation of patient records, among other services. NHS stated in a video shown at the gathering on Thursday that the move resulted in nearly $1 billion in savings.

Oracle claims that its IaaS offers the highest performance and lowest cost in the industry for running application workloads in the cloud. “We’ll be ultracompetitive, which is something Oracle has historically done,” Daheb said.

Acquisitions in AI

Last October, Oracle expanded its analytics offerings with the announcement of the AI Platform Cloud Service. The new service was designed to embed AI into applications and make it easier for developers to set up deep learning neural networks, which allow computers to learn on their own rather than being explicitly programmed, in the cloud.

A series of acquisitions has also bolstered Oracle’s credibility in AI, to the point where the company highlighted Pinterest on Thursday as a customer taking full advantage of cloud-based analytics technology to improve its footprint as an advertiser. Pinterest engaged with Oracle to help measure in-store sales for Promoted Pin campaigns.

“We’re really focused on pervasive intelligence,” Daheb said. “It allows us to move from operation to innovation, to flip the status quo.”

In conversation with Daheb following the keynote remarks, the Oracle executive described a recent meeting with an unnamed “large insurance company.” The potential customer had previously met with AWS and was told that migration to the public cloud was the only viable solution. This was music to Daheb’s ears.

“We see it as a series of stages,” Daheb said. “There isn’t one path.”

That said, AWS Chief Executive Andy Jassy makes the case that the path is actually pretty clear. In an interview with SiliconANGLE Media co-CEO John Furrier in November, he noted that AWS customers such as Capital One Financial Corp., Royal Dutch Shell plc and General Electric Co. are already moving thousands of key applications to its cloud. “It’s kind of wacky these days to build a data center,” he said. “While I still characterize it as the early days of adoption, make no mistake: Enterprises are not just dabbling in the cloud.”

The competitive landscape is now clear, so the central question in 2018 will be whether the path selected by Oracle will enable it to gain on some of its competitors that are much further down the road, or leave it further behind.

Photo: Mark Albertson/SiliconANGLE

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