Summary:

Oracle’s new clouds are a vehicle for selling more Oracle hardware and software into big accounts. It’s unclear how many of these big accounts — banks, manufacturers, insurance companies — really want to go all-in with Oracle in the cloud, however.

Aside from a few comments on how Oracle’s new clouds will rely on industry standards that enable some interoperability with the outside world, make no mistake, when Oracle says “cloud” it means an all-Oracle cloud. And that’s a big commitment to expect from customers who are likely fully aware of how Amazon prices its varied cloud services — which by the way, include Oracle database options.

Oracle’s upcoming Infrastructure-as-a-Service (IaaS) clouds will use the company’s “engineered” hardware and software stack including Oracle VM virtualization and presumably Oracle Linux. A private cloud version for banks and other companies with compliance issues restricting the use of outside infrastructure will build on the same exact stack.

While there are gains to be had from a one-source cloud — no third-party integrators; one throat to choke; etc — it’s by no means clear that even die-hard Oracle database shops will go this route.

How much Oracle is too much Oracle?

For one thing, many large customers are hesitant to devote more of their IT spend to a company they already love to hate. For many of these shops, use of the Oracle database and Oracle Financials is non-negotiable. But Oracle support and maintenance fees have irritated customers who don’t want to pay 22 percent of license cost for maintenance and support. And that 22 percent is just the beginning, said one long-time Oracle customer via email. He wrote:

“That’s just year one. Then add 2 to 4 percent each and every year thereafter for the first five years. Then add 20 percent for extended system supprot in years 6 through 8! Holy Moley! Oracle’s lifetime support sure can suck a lot of life out of a lifetime!”

Customers don’t have much choice. Oracle has — um — strongly discouraged the use of third-party support from companies like Rimini Street which charge less to support Oracle products.

Oracle is known for its pricey software — but list price isn’t the sticking point because Oracle’s sales force will slash prices to get a deal. It’s those support and maintenance fees — which co-president Safra Catz once called the company’s “birthright,”– that really raise customers’ hackles. Updates, support and maintenance on Oracle Enterprise Edition database, which itself lists for $47,500 per processor, are another $10,450 for that first year.

Customers wary of Oracle support lock-in

And with more Oracle technology at work in the cloud, there will be more fees. At Oracle OpenWorld Oracle co-president Mark Hurd said the company’s new top-tier Platinum support will guarantee 5 minute response time. Current Platinum customers aren’t buying that promise on face value.

Pricing on the Oracle Cloud itself was not disclosed. The only price data I heard was Oracle CEO Larry Ellison’s mention of a $200,000 1/8-rack Exadata, but full Exadatas can be well over $1 million. (The engineered systems price list is here.) No matter — wiseguys on Twitter are already trying to figure out how or if Oracle can get in the same ballpark as Amazon. Let’s be clear, Oracle is going after big shops where it’s already entrenched, not the startups that build their businesses on Amazon’s cloud. But it’s also true that in-house developers at the big banks and manufacturers are very aware of the AWS model and could start asking some interesting questions if Oracle Cloud comes in with Oracle-type list and maintenance pricing.

Oracle photos courtesy of Flickr user Oracle_Photos_Screenshots

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