This post first appeared in the Constellation Insight newsletter, which features bespoke content weekly and is brought to you by Hitachi Vantara.
Oracle CTO Larry Ellison can play multiple roles: Enterprise technology troll, provocateur, visionary and swashbuckling billionaire who will make big bets even when believers are few and far between.
Given that backdrop, Oracle's earnings conference calls are usually worth a listen. Ellison, along with Oracle CEO Safra Catz, did a victory lap as infrastructure-as-a-service revenue was up 49% in the third quarter. Oracle Cloud Infrastructure (OCI) has GPUs from Nvidia and is only lacking capacity to grow faster. To that end, Oracle is building data centers as fast as it can.
Many of those data centers are being built to run OCI Database Services within Microsoft Azure data centers. Oracle is also building out OCI data centers for countries that want to keep their data and large language models (LLMs) in country.
Toward the end of Oracle's conference call, Ellison dropped some knowledge on how multi-cloud environments should work. Apparently, Oracle Database@Azure can be a model for other hyperscalers. I chuckled at the idea since the only reason the Oracle-Microsoft deal works is because both have mutual enemies in Amazon Web Services and Google Cloud and mutual customers.
Ellison's take on multi-cloud is that Oracle's Autonomous Database would be the reason multiple hyperscalers would partner with the company. Ellison said (emphasis mine):
"We expect the multi-cloud initiative to continue to expand amongst other hyperscalers where we build OCI regions inside of and coexisting with their existing cloud infrastructure. We think the era of walled gardens is coming to an end. What customers really want is the ability to use multiple clouds to talk to one another. It is really called cloud computing. It's not called a bunch of separate clouds. We expect multi-cloud to become the norm and Oracle DB to be available everywhere. We think that will preserve our franchise in database because the autonomous database is a unique piece of technology, and there's nothing like it in the world. No one else is working on anything like that. No one else is even trying to duplicate the autonomous database. We think it will be it will become a very successful product. In every cloud."
A few takeaways from Ellison's comments.
- Walled gardens do need to end, but that doesn't mean they will.
- Interoperability between all the hyperscalers would be swell.
- Interoperability would also help blend private cloud infrastructure, which will play a role in AI workloads. Constellation Research analyst Dion Hinchcliffe has argued that AI workloads will fundamentally change cloud economic models.
- Oracle can prod the likes of AWS and Google Cloud to do Oracle DB deals because the company could always make support more difficult on those clouds.
- Sure, Ellison is talking up Oracle Autonomous Database, but the technology is unique enough to make strange bedfellows.
- Customers may demand more interoperability to make it easier to mix and match hyperscale compute.
- The Oracle Database@Azure model isn't much different than retail store-within-a-store partnerships (Kohl's-Amazon, Kohl's Sephora, Apple in Best Buy etc.).
- Oracle co-location strategy within other cloud data centers has lower capital expenses and gives the company more coverage. Simply put, Oracle Database@Azure, @AWS and @Google Cloud is damn good strategy and joint customers are everywhere.
Today, multi-cloud really just means there are two or three providers operating in silos. For instance, Equifax uses AWS for Oracle mission critical workloads and Google Cloud for its data layer. Despite "all-in" press releases, most enterprises prefer to have a second cloud provider to keep the primary one honest.
Regulators may also push these hyperscale cloud partnerships between archenemies. AWS recently said it will offer free data transfer for enterprises leaving the cloud. That move follows a similar announcement by Google Cloud. Microsoft Azure matched those announcements. You should check out the fine print on all those announcements.
The Federal Trade Commission has launched an inquiry into cloud computing business practices including data egress fees, software licensing and minimum usage contracts.
It's unclear whether regulators and Ellison will spur hyperscale cloud harmony, but stranger things have happened.
