On Sunday afternoon, Larry Ellison declared that
“Amazon’s lead is over” in cloud computing, thanks to the imminent arrival of the second-generation Oracle cloud platform, first teased late last week.
According to Ellison, the new Oracle cloud platform is both cheaper and more powerful than Amazon Web Services — making it a perfect way for customers to run the large-scale databases that are Oracle’s bread and butter.
It’s a bold challenge to Amazon, which is far and away the leader in the fast-growing cloud computing market, where startups and large enterprises alike pay by the minute or the hour for functionally infinite supercomputing power. And it’s exactly what Oracle’s investors want to hear, as the company keeps losing business to Amazon.
But many analysts still see Oracle as an also-ran in the cloud race, lagging behind competitors like Salesforce, Google, Microsoft, and especially Amazon itself.
Here’s what the analysts have to say:
- “ORCL talked up its ‘next-gen’ infrastructure as a cheaper rival to AWS, but we don’t believe it will be competitive anytime soon,” writes Deutsche Bank in a note to clients sent out after last week’s Oracle earnings call.
- “In terms of market leadership, I think we will have to watch how fast Oracle can crank growth to really get ahead of the competition,” says IDC’s Al Hilwa.
- “There’s still so much vendor lock-in associated with Oracle that I don’t think they’re really perceived as a true cloud player yet because the idea of cloud is one that is interoperable,” Technology Business Research’s Cassandra Mooshian tells Computerworld.
To boil that down even further, Oracle’s cloud may be great for the company’s existing database customers, which includes a lot of large enterprises. These customers might want to move their databases to the cloud to take advantage of the cost savings — so, for instance, they don’t have to keep adding hardware as the amount of data grows. It’s not easy to move databases, and there’s some reason to believe Oracle could have a better chance with Oracle customers.
But it still has a long way to go before it can attract new customers away from Amazon Web Services.
One reason: Oracle has a reputation for pushing its in-house, proprietary technologies, while Amazon, Microsoft, and Google have made a huge commitment to letting software developers use whatever tools and products they like. In Microsoft’s case, it’s even rejected much of its old imperialist ways to be more competitive in the cloud.
Meanwhile, Amazon Web Services is a $10 billion juggernaut of a cloud computing beast, while Oracle is only expected to do $2 billion in total cloud revenues this year — very little of which can be attributed directly to the current form of its direct challenger to Amazon Web Services.
Oracle does have time on its side: it’s still very early on in the cloud computing market, and Oracle could make a strong case to the crucial large enterprises — many of whom are still locked into Oracle’s technology for critical parts of their business.
But the market doesn’t seem to be holding its breath.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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