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Verizon to take on AWS with Oracle Database as a Service, middleware

Oracle shops may get a break on licensing costs, as well as an alternative to Amazon's Oracle RDS, with Verizon's forthcoming DBaaS, sources say.

Verizon and Oracle will team up this quarter to offer Oracle Database as a Service, middleware, management software and add-ons with pay-by-the-hour licensing agreements, has learned.

Oracle's upcoming partnership with Verizon won't be enough to make either company a cloud leader overnight, but it could lead to licensing cost savings for some customers, industry experts said.

Beginning in the first quarter of 2014, Oracle customers will be able to license Oracle Database 11g and 12C, Oracle Fusion Middleware and Oracle Enterprise Manager to run in Verizon's Managed Hosting and Enterprise Cloud virtual infrastructures, according to a Verizon document that details the Oracle partnership.

Oracle's upcoming partnership with Verizon won't be enough to make either company a cloud leader overnight, but it could lead to licensing cost savings for some customers.

Oracle customers will be able to use their existing software licenses with no additional license fees on Verizon platforms, according to the document.

The plan is also to create an Oracle Database as a Service that can run in Verizon Cloud environments, for which customers would pay as they go through Oracle's first hourly subscription agreement and licensing offer with the full suite of services and add-ons.

The inclusion of middleware and other add-ons is an important differentiation for Verizon and Oracle against Amazon Web Services (AWS), which has offered Oracle's raw Standard Edition One database by the hour since 2011.

Oracle launched its own Oracle Database as a Service offering in September, but it is based on a monthly contract. Microsoft and Oracle also support the use of Oracle software on Windows Azure as of last year, but this feature remains in preview.

Another important factor for the Verizon and Oracle duo will be price, which remains unknown. Meanwhile, an extra-large AWS Relational Database Service (RDS) instance running Oracle costs $1.13 per hour, which includes an Oracle database software license.

It's also unclear exactly when the Verizon Cloud will run Oracle Database as a Service; no general availability date was specified. Sources said the partnership news could come as early as this week.

Experts weigh in on Oracle Database as a Service

The move is a significant one for Oracle, as the company's CEO, Larry Ellison, had been outspoken in his skepticism about the cloud in previous years, but has more recently thrown his weight behind the notion of Oracle as a cloud player after all.

It's good news for Oracle users who stand to reduce licensing costs.

"Oracle licensing can comprise 10 to 20%of IT budgets," said David Linthicum, senior vice president at the Boston-based cloud consultancy Cloud Technology Partners.

For example, according to an Oracle price list, an on-premises processor license alone for the Standard Edition One database is $5,800.

"If you use your Oracle database less than 5,800 hours a year and the pricing by Verizon is around a dollar or so per hour, it's a deal," said another industry watcher, speaking on condition of anonymity.

Not everyone sees it that way.

"Don't look for a lot of traction on this," said Dave Welch, CTO at House of Brick, an IT consultancy in Omaha, Neb. which focuses on Oracle. Welch also had no inside information on the deal.

For one thing, Welch said, many database administrators are still bucking the idea of even virtualizing tier-1 applications like Oracle databases, let alone putting them in a public cloud. For another, anyone considering doing this would have to get performance service-level agreements as well as performance stability SLAs to ensure their application would run properly, Welch said.

"If Oracle and Verizon are serious about this, they'll provide performance and not just capacity SLAs," Welch said.

Database as a Service is a small but growing niche of the cloud computing market. In 2012, for example, just 8% of 276 respondents to a 451 Research survey said they were using Database as a Service, but 32.6% of respondents said they would use a relational Database as a Service in 2013.

Verizon and Oracle did not comment as of press time.

Beth Pariseau is senior news writer for Write to her at bpariseau@techtarget.comor follow @PariseauTTon Twitter.

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Oracle Database as a Service will be offered at an hourly rate in Verizon's cloud computing data centers later this year