For Oracle users this collaboration should mean a fast, simple, way to deploy new apps on Amazon's cloud, with no additional license fees or hefty upfront hardware costs, the companies said.
What we'd save on hardware we would be spending on change management processes.
project manager Fonterra Co-Operative Group
IT executives attending the annual confab, Oracle Open World, were interested in the idea of running Oracle apps on EC2, but none were ready to buy anytime soon.
"We'd have to change our business process radically to get to the cloud model [for purchasing IT]; to go through that change is expensive … What we'd save on hardware we would be spending on change management processes," said Mark l'Anson, project manager at Fonterra Co-Operative Group, a New Zealand-based dairy manufacturer. "It's just easier to purchase a product the way we always have," he added.
Others echoed these sentiments. "Big companies move slowly and many are stuck with outsourcing contracts that prohibit them from moving to the cloud tomorrow," said Alex Ureche, an Oracle solutions architect at Global One Consulting. General Motors is one of his company's clients. He added that departments are often unwilling to give up big budgets, even if it means saving money for their companies.
Security remains hurdle to cloud adoption
But changing business processes is hardly cloud's only hurdle to broader adoption. For many businesses, regulatory and security issues are yet another major stumbling block that prevents them from moving to the cloud.
"Regulations say we cannot export data beyond European boundaries," said Sven Vermeulen, a systems analyst at KBC Global Services, a European bank and insurance company. While Amazon might have data centers in Europe, Vermeulen said it wasn't possible to have data "partially in one place and in another and still remain compliant."
A lead middleware architect at Cummins Inc., the global engine manufacturer based in Columbus, Ind., said her company is concerned about data privacy issues and would not use cloud services anytime soon. "The loss of control is a problem for us," she said. On a positive note, she said that cloud services are appealing because a provider takes care of all the complexiity in making products work together. "It gets harder and harder every day, keeping the middleware stack and end points on the right versions," she said.
Adjusting to a new IT universe
From Amazon's perspective, the move is a significant adjustment to its previous one-size-fits-all Infrastructure as a Service (IaaS) strategy. Oracle's contribution marks a tentative step into cloud services for the software giant. It has loosened up its famously draconian licensing to allow license holders to transfer existing licenses for AWS-certified products and will provide standard support at all levels for AWS customers.
"Oracle convinced Amazon to run its hypervisor," said Dr Stefan Ried, senior analyst for vendor strategy at Forrester Research Inc. Oracle VM is a relatively new hypervisor and has been in production since only 2007. It is Oracle's answer to VMware and Microsoft's Hyper-V. But it has not proved terribly popular in the enterprise market given fears about Oracle's price gouging.The loss of control is a problem.
lead middleware architect,
Ried said that both Amazon and Oracle were dabbling in new territory. Oracle is poor at serving the middle layer of system integrators and service providers that are the lifeblood of enterprise; it prefers direct sales into data centers and IT shops. But Oracle knows that the IT world is changing, said Reid, and its partnership with Amazon is a safe way for the firm to adjust to shifting dynamics of the marketplace.
"Oracle is about to start to understand how the coming enterprise cloud market and cloud-style trusted hoster market can work," Ried said.
Meanwhile, Amazon is struggling to tap the lucrative enterprise market. It sees the pool of new cloud users quickly ossifying into test and development shops and web-only firms. The real money in IT services is in the enterprise, said Reid, and AWS is trying hard to figure out what enterprises are willing to buy. Meanwhile, system integrators and traditional service providers are "going cloud" by loosening up and adopting the same techniques that made AWS an overnight success.
Offering Oracle VM, a close match to its own hypervisor technology, and being able to hand off users to Oracle for support is also a low-risk way for Amazon to build credibility among enterprises. Amazon has seen that the pure public cloud market--that is for IaaS-- is a much smaller market than the traditional hosting for enterprise market, said Ried . He said integrator T-systems had $4 billion worth of business in Europe, and EDS, Capgemini and others in the U.S. made up another $5 billion.
"Come on, this is 10 to 15 times bigger than Amazon's business. Obviously these guys are not stupid, they want to go into bigger markets, but they need to find ways to keep economies of scale," said Ried. Either way, he said, the partnership is a win for customers. They can now have the convenience of AWS and use existing Oracle licenses and stay certified.
He predicted the majority of use of Oracle on AWS would be in the tried-and-true testing and development scenario, probably by the very same system integrators that Amazon is trying to compete with. They can develop Oracle on Amazon with very low investment, and take the exact same work to customers' own on-premise servers without missing a beat.
Oracle Enterprise Linux, Oracle Database 11g R2, Oracle E-Business Suite, Oracle WebLogic Server and Oracle Universal Content Management will be made available as Oracle-certified AMIs at some point in the future. There was no word on which of Amazon's availability zones would offer support for Oracle VM and the new AMIs, but it's a safe bet it will be in the flagship, Ashburn Virginia, datacenter, US-EAST.
Jo Maitland is SearchCloudComputing.com's Executive Editor; write to her at firstname.lastname@example.org . Carl Brooks is SearchCloudcomputing.com's Technology writer; write to him at email@example.com.