Next week, Oracle will start a price war with Amazon over cloud computing

Larry EllisonOracleOracle executive chairman and CTO Larry Ellison

Oracle has bet its future on cloud computing, not that it had a choice. Companies don’t want to buy their own servers, storage, and software anymore and install all of it in their own data centres.

They want to rent all that stuff from vendors on a subscription basis and let the vendors maintain everything.

Amazon is far and away the leader in cloud computing and it’s been coming after Oracle’s customers with a vengeance.

Oracle’s customers love the company’s powerful database but don’t like the company’s high-pressure sales tactics. But to rip out that database that runs their businesses, and replace it, is next to impossible.

So Amazon built a service that does it for them, called Amazon Web Services Database Migration Service (DMS) . It promises to easily move Oracle’s customers (and other databases) to Amazon’s database in the AWS cloud.

Now, Oracle is fighting back. It has launched its own AWS-killer cloud service, (aka Infrastructure as a Service) and wants to win customers the old-fashioned way: a price war.

So said Larry Ellison, Oracle Chairman and CTO, in the press release where Oracle reported a disappointing first quarter earnings:

“Next week at Oracle OpenWorld, we will introduce the second generation of our Infrastructure as a Service. Our Generation2 IaaS delivers twice the compute, twice the memory, four times the storage and ten times more I/O at a 20% lower price than Amazon Web Services. IaaS represents a huge new cloud opportunity for Oracle to layer on top of our rapidly growing SaaS and PaaS businesses.”

Currently, Oracle isn’t considered much of a contender in this part of the cloud computing market.

Most in the industry see it as three-horse race with Amazon way out in front in every way from revenue to features, Microsoft nipping at its heels and Google a distant but gaining on ’em third.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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