Oracle starts price war with AWS to close the gap

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Oracle starts price war with AWS to close the gap

Claims it has the tech to overtake cloud leader.

Software giant Oracle has bolstered its infrastructure-as-a-service offering in an attempt to undercut rival Amazon Web Services and reverse its reputation as a laggard in the cloud market.

Oracle’s IaaS product has trailed behind the company’s platform- and software-as-a-service offerings, which grew 66 percent in its most recent quarter compared to the same time last year. IaaS revenue, in contrast, grew only 5 percent.

The company sees IaaS as part of its wider PaaS and SaaS package, but has struggled to gain traction in a market heavily dominated by AWS, Microsoft and Google.

“What we're looking for is the third leg of the stool, which is to push into infrastructure-as-a-service, where we have an all new and very formidable competitor, Amazon, who we think now with our new generation two data centres, we have a big competitive advantage over,” Oracle CTO Larry Ellison said in the company’s recent results briefing.

Oracle is betting that the technology underpinning its “generation two” IaaS data centres - unveiled this week - will give it an advantage over AWS and elevate its IaaS business to the growth rates it is experiencing in PaaS and SaaS.

Oracle claims its second generation IaaS platform delivers “twice the compute, twice the memory, four times the storage and ten times more I/O” than the first generation “at a 20 percent lower price than Amazon Web Services”. 

It is offering 36 cores, 512GB D-RAM, and 28.8TB SSD storage for US$5.40 per hour. It claims AWS charges US$6.82 per hour for an equivalent service.

New additions to the IaaS platform include Oracle Bare Metal Cloud Services (bare metal cloud servers in a virtualised network environment), Oracle Ravello Cloud Service (which allows enterprise VMware and Kernel-based Virtual Machine workloads to be run unchanged in the public cloud), and Oracle Container Cloud Service (Docker-compatible method of deploying applications).

“.. our new bare metal offering makes it possible for our customers to lift and shift their entire existing corporate infrastructure, data, and applications without any changes whatsoever and move it to the Oracle public cloud,” Ellison said.

“You just can't do that with Amazon Web Services. Lift and shift the entire network, database, data, applications, [and] move all of that across to our data centre without changing anything. It's a real advantage.”

Cloud - but on premise

At its OpenWorld conference in San Francisco this week, the company also announced a new subscription offering that would allow customers to run Oracle’s cloud software and hardware technologies behind their own firewall.

The Cloud@customer product is an “extension of our public cloud that sits on your data centre floor”, Ellison said. The offering is targeted at industries with data sovereignty obligations.

“We can install the identical software and hardware to what we use in the cloud in your data centre, behind your firewall, attached to your high-speed local area network,” Ellison said today.

“And by the way, we’re not going to sell you the hardware, we’ll treat that cloud extension of ours as just that - a cloud extension. You don’t have to buy the hardware, you don’t have to buy the software, it’s offered as a subscription service. The exact same price as buying the service from the cloud.”

it is expected to release more detail of the new Cloud@customer product during its annual OpenWorld conference this week.

Allie Coyne travelled to OpenWorld as a guest of Oracle

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