I had the pleasure of being invited to Oracle's CloudWorld conference in Washington, D.C. this week, and came away with a solid understanding of where the company stands with its cloud strategy, as well as where it's headed.
The key takeaway? Oracle has clearly stated some grand growth ambitions for its cloud products, which span from IaaS to PaaS to SaaS, but its leadership also has a realistic view of where most customers are in their journey. Here's a look at the highlights from the conference.
Oracle Cloud Machine: Bringing Oracle's Cloud In-House
Probably the biggest announcement made at the show involved Oracle Cloud Machine. This is a server, available in three size configurations, that has the IaaS and PaaS software stacks running on Oracle's public cloud installed on it. It's meant to be run inside a customer's data center, in conjunction with their other infrastructure, and it's managed by Oracle.
The target audience for Cloud Machine is companies that aren't ready or willing to use a public cloud, whether due to regulatory issues or simple concerns over security and privacy.
Cloud Machine is available as a subscription service that covers the cost of the hardware, the people who manage it, and the IaaS compute resources, said Oracle EVP Thomas Kurian during a meeting with analysts. If the customer wants to use the PaaS layer, they choose from a subscription or metered pricing model, and the pricing is exactly the same as on Oracle's public cloud, he said.
The three models have 288, 576 and 1080 cores, respectively. Oracle has received inquiries from customers on how they can test for application sizing before choosing a machine, Kurian said. Oracle tells them to start by using sample data in Oracle Public Cloud, which will help figure it out accurately. Should a customer find they picked too small a size, they can always burst workloads to the public cloud, Kurian said.
As for service-level agreements, the primary difference between Oracle Public Cloud's and the one for Cloud Machine centers on power issues or anything else that's facilities-based, Kurian said. Oracle's Tier 4 data centers feature aspects such as dual redundant power grids; it's on to the customer to architect their data centers how they wish, he added.
Oracle plans to roll out similar offers for its Exadata database machine and Big Data Machine later this year, Kurian said.
There are several strategic rationales for Cloud Machine, as Kurian explained.
For one thing, there are many places in the world which still have no significant local data center presence from any cloud provider, Kurian said. Chilean customers, for example, have "significant latency" when accessing North American data centers.
In addition, many countries have data residency requirements, but aren't yet lucrative enough markets to warrant an investment by Oracle in a multi-hundred million dollar data center, Kurian said: "That's probably the most important reason."
Also, many customers have pursued hybrid cloud strategies but have found it difficult to make workloads portable between private and public environments. Oracle Cloud Machine's identicality to Oracle Public Cloud offers not just a stepping stone, but a uniform dev-ops toolkit, Kurian said.
Finally, some customers and industries simply aren't yet ready to use public cloud services, he added. In the meantime, Oracle Cloud Machine can give them the benefits of simplicity and automation.
Oracle's Cloud Apps Story
Ninety-five percent of Oracle's applications that generate revenue will be available in the cloud, said SVP Shawn Price in a meeting with analysts. Oracle is paying sales representatives accelerated commissions for cloud and decelerating its emphasis on on-premise sales, he added.
Despite what rivals might say, Oracle is not late to the SaaS market, Price said. "We’re early to what the world is moving to, as far as mission-critical SaaS." In the cloud, Oracle is trying to change the sales mindset from big-bang transactions to, "let's start with a single application and go live in 90 days," Price says.
Oracle is also continuing to run its Customer to Cloud sales program, where representatives sit with on-premises customers, take an inventory of their licenses and work out a swap for cloud, Price said.
A continuum has crystallized for Oracle customers on the path to the cloud, Price added. This sees most start by adding SaaS applications, then integrate their SaaS assets with on-premises software, followed by extending and enriching their SaaS portfolio and moving application development into the cloud, for an end state of "cloud IT," Price said.
The Drive for Data Centers
Oracle has built out its global data center infrastructure at a torrid pace. It started with one in 2012 and already has 19 now, with up to a total of 24 during the next six months, Kurian said.
Moreover, Oracle has doubled the density of its data centers each year, with respect to the number of cores and customers served. "We're doing software optimization all the time," he said. On the same hardware footprint, it's now able to run eight times the number of customers as in the beginning, Kurian said.
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