Oracle is finally all-in on the cloud

The company's new services complete its cloud platform, but analysts say it still lags behind the major cloud players

Oracle OpenWorld
Reuters/Jana Asenbrennerova

With years having passed since his famous "what the hell is cloud computing?" question, Oracle CTO and founder Larry Ellison said this week that the company's introduction of more than two dozen services completes its cloud platform. The longstanding on-premise database and application vendor is emphasizing its presence in the SaaS, PaaS, and IaaS spaces, including cloud-based mobile development services for Android and iOS.

"This is Oracle's 'all-in-on-the-cloud' moment," analyst John Rymer, of Forrester, said in an email. "Remember Steve Ballmer's moment? Ballmer had the advantage of never saying that cloud was, in essence, nonsense. Larry Ellison had to overcome his earlier negative assessment of cloud's potential for customers. And so what Oracle did was make a commitment first, and announce some new cloud services to back up that commitment."

In a presentation at Oracle headquarters in the San Francisco Bay Area, Ellison emphasized that customers now can move all their applications to the cloud. "You can take any of your workloads that are on-premise and move to the cloud," he said. But Oracle's comprehensive rollout still does not bring the company up to par with competitors like Microsoft, with its Azure platform, or Amazon, Rymer said. "Oracle can now start to reach the level of technical stability, service breadth, customer engagement, partner ecosystem, etc. that AWS, Google, Microsoft, and Salesforce have already attained."

Compared to those four companies, Oracle provides fewer cloud platform services, said Rymer. "But let's be careful here -- Oracle's cloud services are designed to help its apps customers embrace cloud. This focus is a good thing." 

Rymer, though, said he continues to be puzzled about Oracle's insistence that it competes with Amazon Web Services in infrastructure services. "In my opinion, Oracle will win or lose in the cloud in the SaaS arena first and the platform services arena second. And those services are where the money/margin is. Infrastructure services are necessary, but [they're] an unattractive low-margin business unless a company is operating at the scale of an AWS, Microsoft, and Google," and Oracle is not yet operating at that scale. "Some customers will value Oracle's APIs to its infrastructure services. But Oracle competing with AWS makes no sense to me."

Oracle often conflates cloud and managed hosting in its messages, Rymer argued. "I believe much of what Oracle calls ‘cloud' is actually managed applications hosting. Managing hosting services aren't comparable to AWS, Azure, Google, and Salesforce. Thus, I recommend against taking at face value Oracle's comparisons of its cloud business to those vendors' respective businesses."

Ellison, though. emphasized Oracle's cloud volumes. "We're up to 33 billion transactions [in the cloud] a day. That's a lot of transactions."