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Oracle IaaS has foothold with legacy shops, plays catch-up to AWS

Oracle hopes to rival public cloud giant AWS in the IaaS market, and while it could win over legacy Oracle shops, it needs to attract developers and non-Oracle users, too.

BOSTON -- IT shops heavily invested in Oracle technologies may see the vendor's revamped infrastructure-as-a-service strategy as a natural next step -- but for non-Oracle shops, at least for now, that shift seems less likely.

Oracle this week continued attempts to rattle public cloud leader Amazon Web Services, positioning its new bare metal and workload migration services as a major boon for potential cloud users, and as key differentiators in an increasingly competitive infrastructure-as-a-service (IaaS) market.

But how effective those efforts are in actually luring businesses -- and especially those who haven't already invested in Oracle technology -- to the Oracle public cloud remains to be seen.

"On the one hand, [Oracle] is so embedded in the enterprise," said John Rymer, vice president and principal analyst at Forrester Research. "So it's hard to dismiss them, but they're also so far behind and so late to the game."

At Oracle Cloud Day here, the vendor's cloud executives picked up where founder and CTO Larry Ellison left off at the OpenWorld event in September: taking direct aim at market leader Amazon Web Services (AWS).

"[AWS] got the word out there, they got people to actually move toward the cloud and they've got tremendous momentum in the market -- no doubt about that," said Ashish Mohindroo, vice president of Oracle Cloud at the conference. "But when you peel back the layers, you'll see that, the first thing is, they are very much focused on infrastructure as a service."

Oracle instead aims to focus on the end-to-end cloud computing stack, Mohindroo said, including software-as-a-service (SaaS) capabilities for Oracle financial, ERP and HCM business apps; platform as a service (PaaS) for data management and app development; and infrastructure as a service (IaaS) with the Oracle public cloud.

While it's important for Oracle to compete at the cloud infrastructure layer, the company should lead with its SaaS and PaaS offerings, given its legacy in business applications and data management, Rymer said.

"The value to their customers is really in the SaaS apps and their platform services," he said. "All of these cloud providers need infrastructure, but I hope [Oracle] doesn't over-rotate on it, because their customers really want to engage with them at the platform layer and the software layer."

Oracle IaaS evolves

But Oracle's IaaS strategy hasn't exactly taken a back seat. The company spotlighted its revamped IaaS offering at OpenWorld this year, and continues to emphasize its new Bare metal services, which let users deploy compute-intensive workloads on top of bare metal servers in the cloud.

"Bare metal is a pure hardware server that is dedicated to you," Mohindroo said. "You decide what operating system you want to run on it, and on top of that, anything else -- it's completely within your control, and designed for high-powered applications."

A new "lift and shift" cloud migration service, based on the technology Oracle gained through its Ravello Systems acquisition earlier this year, was also touted as a differentiator between the Oracle public cloud and competitors, such as AWS. Ravello allows users to move existing virtualized workloads to the public cloud largely "as is," without having to reconfigure applications or rewrite code.

One Oracle database administrator, whose company -- a provider of commercial safety equipment -- is currently conducting a proof of concept for Oracle IaaS, said the Ravello technology especially piqued their interest. 

"I like that you'd have the ability to shift a VM off-site, without having to change everything else underneath it -- you can have the same server name, IP address and everything -- and it's invisible to the users connecting to it," said the administrator, who requested anonymity.

It's the bare metal piece, though, that could especially help Oracle stand apart from IaaS incumbents such as AWS moving forward, Rymer said, as it offers users more customization and flexibility at the operating system level.

"We do expect more interest in [bare metal] as more enterprises move their core systems to the cloud," he said.

Oracle's cloud challenge with non-Oracle shops

For some companies with a heavy investment in Oracle databases and applications, the move to Oracle IaaS could be a natural next step, Rymer said. For starters, the Oracle cloud, at least for now, is the only option to support certain Oracle technologies, such as Oracle Real Application Clusters for database clustering.

But, more than that, some Oracle shops simply see the vendor as their strategic technology partner; if Oracle transitions its business to the cloud, they'll follow.

"It's similar to the folks who were committed to Microsoft in 2008, when Microsoft really started to feel its way toward [the cloud] they have today," Rymer said.

Oracle's cloud strategy could definitely win over enterprises that already have large Oracle footprints, said Peter Yu, data scientist at Fresenius Medical Care, a healthcare company in Waltham, Mass.

"The biggest advantage as an existing [Oracle] customer is that you have a similar experience," Yu said. "Whether in the cloud, or on-premises, it would be similar software to use, and that could make it easier to do that transition."

But even if it makes headway with its legacy install base, Oracle must win over new customers -- and especially new developers -- to succeed long-term, Rymer said. Whether it can roll out new services around development and data analytics is key, and its Oracle Data Cloud, a data as a service platform for analyzing consumer data, is a step in the right direction.

Still, Oracle faces a tough, uphill battle against AWS, that in the third quarter of this year accounted for 45% of the worldwide public IaaS market -- more than twice the size of the next three vendors combined -- according to data from Synergy Research Group.

Meanwhile, other IT giants, such as Hewlett Packard Enterprise and Verizon, shuttered their public cloud businesses this year amid fierce market competition.

"I feel like there are so many players in this field right now, and Oracle is a newcomer with a lot to catch up on," Yu said. "If I'm not an existing customer, I wouldn't see a lot of reasons to choose Oracle Cloud, but as a customer of theirs, it's something to consider."

Kristin Knapp is site editor for SearchCloudComputing. Contact her at [email protected] or follow @kknapp86 on Twitter.

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