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Summary:

Oracle’s promised new public and private clouds will run (spoiler alert) Oracle OS, Oracle VM, Oracle database and new Oracle Exadata X3 hardware. The company’s scale-up approach flies in the face of scale-out clouds espoused by market leaders like Amazon.

Oracle CEO Larry Ellison

Updated: Oracle has found a market for its big, pricey engineered hardware systems — and it’s in new public and private Oracle clouds. Oracle CEO Larry Ellison laid out the company’s new all-red infrastructure-as-a-service cloud plan at Oracle OpenWorld on Sunday night.

Oracle is jumping into the public infrastructure as a service (IaaS) business — the market pioneered and dominated by Amazon Web Services — with infrastructure that is all about  Oracle.

Oracle cloud will use “our OS, our VM, our compute services and storage services on the fastest most reliable systems in the world — our engineered systems, Exadata, Exalogic, Exalytics, all linked with Infiniband,” Ellison told thousands of Oracle customers, partners and others at San Francisco’s Moscone Center Sunday night. For banks and other companies with requirements to run infrastructure in house, Oracle will offer a private cloud based on the exact same technology and run and manage it customer data centers, Ellison said.

The promised Oracle 12c (the “c” stands for cloud) database will be the software foundation and Ellison said this iteration of the database will put multitenancy — the ability to securely keep separate sets of data in one place — at the database level where it belongs. The rough concept is that 12C is a database container that can run separate “pluggable” databases — one for ERP, another for CRM and so on.

“Back in 1998 and 1999 when NetSuite and Salesforce.com came out, the only way to do multitenancy was at the application layer,” Ellison said, adding that he had problems with that  — he Ellison used to blast competitors’ user of multitenancy, calling it an aging technology. That apparently all changes now.  (Ellison had stakes in NetSuite and Salesforce.com,  both pioneering SaaS companies and still owns a big piece of NetSuite.)

By moving multitenancy into the database, software as a service (SaaS) and platform as a service (PaaS) providers can relinquish that workload to the database and use database query and business intelligence tools to work with them instead of having to come up with application-specific tools.

Ellison: Our SaaS customers want this

Ellison said SaaS and PaaS customers asked Oracle to supply this infrastructure so it will be interesting to see if either Salesforce.com or NetSuite — both SaaS companies which use Oracle databases — makes a move. That’s doubtful in Salesforce.com’s case since that company is competing more and more with Oracle.  And, NetSuite CEO Zach Nelson will speak at OracleOpenWorld so stay tuned.

Update: Reached by email, NetSuite’s Nelson said: “NetSuite wouldn’t choose to run our application on anyone’s public cloud — Oracle’s, Microsoft’s, or Amazon’s. We need to manage every aspect of our infrastructure to ensure service level commitments we have made to our customers.” No word back yet from Salesforce.com’s Marc Benioff.

Update: Nelson wrote back in to clarify his  statement: “I should have qualified this a bit to say we wouldn’t run our ‘production’ application on anyone’s cloud. However, the idea of doing pre-release testing and/or disaster recovery on Oracle’s cloud is interesting to us. And of course, we certainly believe Oracle’s technology is fantastic for cloud delivery as we (like salesforce.com) run a complete Oracle database and app server beneath the NetSuite application,” he wrote.

The hardware foundation for Oracle Cloud will be Exadata X3, a new “engineered system” which packs 26TB of memory — 4TB of DRAM and 22TB of Flash memory, Ellison said.

Oracle’s problem in all this is that it has not made much of a case for its hardware to date. Oracle’s hardware business was off 24 percent year over year in its last quarter. It also has a bit of an ecosystem problem. Yes it has SaaS customers, but as several on Twitter commented, they would be more impressed if Oracle had trotted out a list of customers and/or partners that signed up for this cloud effort.

Playing catchup in cloud

And, Oracle’s entry into public cloud is late given that competitors including IBM, HP, and the OpenStack players are already there.

In addition,  Oracle’s decision to use very high-end specialized hardware to power its cloud flies in the face of conventional wisdom espoused by web giants like Facebook, Google and Amazon that yoke together thousands of commodity servers in webscale data centers. Oracle’s take is definitely scale-up in what appears to be an increasingly scale-out world.

 Oracle OpenWorld photo courtesy  of Flickr user Oracle_Photos_Screenshots

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  1. The issue with moving existing SaaS vendors (some of who are likely Oracle customers) over to this new database is that it would mean a complete re-engineering of their products. Add to that the fact that some vendors (salesforce for instance) have a long running feud with Oracle and it’s unlikely.

    Now the real question is – if you were setting up a new SaaS product, would you build it atop 12c?

    Time will tell on that count, but I suspect not…

    1. yes ben…agreed. Coopetition run amuck.

    2. Once you add in all the enterprise software licenses and the “fixed infrastructure bias” towards vertical scaling of known, stable systems running on large specialized hardware the economics of operating applications at scale breaks down. Application servers like Weblogic have so much invested in operating in a static stable environment that key factors such as how long it takes for a jvm to start (takes a long time with WebLogic compared to Tomcat) have been set aside in favor of adding many features that in cloud infrastructure can be achieved better by consuming them as services. Weblogic and enterprise application servers were designed for a world of brittle, narcissistic, and solipsistic infrastructure. In the Cloud specialization determines the viability of a species and hothouse flowers like enterprise application servers will likely fail to thrive in any Cloud. It’s a Utopian experiment to build an enterprise Cloud and some may survive given enough believers.

  2. And the Oracle cloud data center will be on the island of Lanai right ;)

  3. This would be an interesting way to provide cloud services to larger enterprises because hardware/database level multi-tenancy means an easier way to provide the security that the kind of customers Oracle has need. However, if it means moving to a completely new database product/version then why would they choose this over other products? Perhaps to maintain a single vendor/support contract?

    1. i think oracle is hoping so

  4. James Paul Peruvankal Monday, October 1, 2012

    Any thing they can do to keep the existing customers!

  5. Another Bellwether enters the #iaaS space (in addition to GOOG, HP, IBM) – great sign for the industry!

    Scott Herson
    Joyent Cloud
    Sales – Americas
    949.861.1069
    herson@joyent.com
    http://www.joyent.com
    @scottherson
    http://www.linkedin.com/in/scottherson

  6. Oracle’s Ellison has again waited just long enough but not too long. The techno stack they are now able to offer is so mature, powerful and dense that they are able to beat any competitor by price per transaction resp. per “MIPS”. This could indeed mark a fundamental change in Oracle’s market approach from pricey quality products to low cost quality services. And it could mean finally a big step in energy efficient computing.

  7. All-Oracle-Red Monday, October 1, 2012

    Larry’s on a deserted isle here! Wow . .I’m in awe here . . Oracle . . .all-Oracle . .all-the-time! . . .

    No where to go but Oracle!

  8. Santosh Singh Monday, October 1, 2012

    Amazon, Google and Microsoft were quick enough to embark on the cloud strategies. Now Oracle was left over to do something radical or just be a follower. They went for first option. It will be great to watch how it performs as all-Oracle will definitely be not my option looking from Corporate risk management. Understood from past Oracle pricing option it will also be not the most budget saving solution for CIOs and CFOs.
    However appreciate Larry for his bold and radical step. Hope he believes in self and as a consumer let see what we get.

  9. Robert J. Berger Tuesday, October 2, 2012

    See the dinosaurs play as the meteor approaches their world.

  10. Shamseer K Palayil Wednesday, October 3, 2012

    A great move from Oracle indeed!!!

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