Ellison loves a target
Oracle chairman, Larry Ellison, made big claims relating to the company’s chances in the cloud market at Oracle’s Openworld conference in San Francisco in 2016, leaving many questioning if the company understood the tough road it has ahead to catch its rivals.
“It is very clear Larry [Ellison] has painted a target on Amazon and I don’t know if that is the right target for Oracle,” Warrilow said. “I think their opportunity, and where customers want them to be is more in that PaaS space and in the SaaS layer."
According to the analyst, the race to catch Amazon is not one that Oracle can win in the Infrastructure-as-a-service (IaaS) space.
True to form, Oracle has also recently changed the terms of its licensing agreements to effectively double the cost of Oracle workloads running on AWS or Microsoft Azure.
“Is that going to engender people to trust them in the cloud when that was their first foray and now that they are getting more interested in targeting it directly, and they suddenly double the price for customers who are running Oracle in the cloud?" Warrilow said.
“What do those customers do? Do they pay that tax? Or, does it make then consider non-Oracle technology?"
Warrilow warned that if the company continued its old practices in the cloud, it runs a risk of customers jumping ship, a process which is much easier in the cloud than in a traditional sales model.
“If they are true in that the cloud is their future, they are going to have to realise that, and this is not a good indication in that respect,” he said.
Deep customer base
Oracle is not in danger of going out of business in the short term, as the company still has a broad install base in database management services, which will sustain it.
UXC Red Rock is Oracle’s largest Systems Integrator (SI) partner in the local region and is a pure Oracle shop.
For the company's managing director, Phil Milne, the timing of the local cloud launch was right for the region both for current Oracle users and potential customers.
“The data tells us that about 50 per cent of CIOs are looking at cloud solutions, whether that be hybrid [or in other forms], but the certainly have a cloud first strategy, and they are looking at those kind of solutions,” he said. “I think the market is mature enough now to be embracing what Oracle now has to offer.
“Many of our customers have invested heavily in Oracle all the way up and down the stack. I think this just rounds out the offering that Oracle has here locally," he said.
Milne said Red Rock’s customers are a mixture of companies which have some workloads running with other cloud providers and those which have stayed loyal to the vendor.
“For many, Oracle is a part of their cloud strategy and for them it is just easier [to move to the Oracle cloud],” he said. “Many of our clients have Oracle apps, some of which are on premises, and the new offering makes it much easier for them to migrate those on to the Oracle platform.”
As a subsidiary of CSC, the company also has a number of clients with non-Oracle workloads and Milne said that this presented the company with an opportunity to migrate those workloads to the Oracle platform or infrastructure services.
“We will be driving the Oracle workloads onto the Oracle cloud, but once we have done that, many of our customers will then look at other non-Oracle workloads and seek for us to offer a solution there within Oracle, and as part of the larger CSC, we can offer all of those solutions," Milne said.