With its new investment in third-party cloud vendor Engine Yard, Oracle is proving it will do whatever it takes to fill gaps it might find in its own cloud strategy. Oracle's Engine Yard move, announced last week, reveals that the company will spend money and roll the dice on other vendors in the cloud space even as it builds its own capabilities. Earlier this year, the company unveiled its extensive cloud platform, Oracle Cloud, featuring enterprise applications like ERP and CRM and the ability to deploy Java applications. An IaaS (infrastructure as a service) platform also is on Oracle's radar.
Given the growing prominence of cloud computing -- evidenced by the rise of such services as Microsoft Windows Azure, Amazon Web Services, and Salesforce.com -- Oracle really does not have a choice but to find ways to succeed in cloud computing if it wants to stay current.
The Engine Yard investment, the amount of which has not been revealed, could give Oracle expanded platform options for cloud deployments; Engine Yard provides Ruby, PHP, and Node.js deployments with its PaaS (platform as a service) cloud.
Might Oracle end up acquiring Engine Yard in full? Not necessarily, says Stephen O'Grady, an analyst at RedMonk. Instead, it's probably a way to gather intelligence: "Oracle may gain insight into customer drivers and adoption patterns behind platform as a service. Any acquisition interest will depend on what Oracle perceives to be the traction for PaaS within its target customer base." Thus, the Engine Yard investment is not a hedge to support PaaS adoption, but an opportunity for more direct intelligence on the successes and failures of one PaaS vendor, he adds.
The Engine Yard announcement follows by a few days Oracle's acquisition of Instantis, which provides cloud-based and on-premise project portfolio management. In another recent nod to a cloud computing strategy, Oracle calls its Solaris 11 Unix "the first cloud OS."
Although CEO Larry Ellison three years ago vehemently dismissed the cloud, it's clear that today's Oracle expects to be a major player in the cloud space and is now building and buying what it needs to make that happen.
Given the leads already established by vendors such as Amazon.com, Microsoft, and Salesforce.com in cloud computing, Oracle might find itself in a similar position to where Microsoft is in the smartphone and tablet market: A software giant that has a lot of lost ground to make up -- perhaps more than is possible at this stage.
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