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Tuesday, 27 September 2016

Will Oracle IaaS lure IT shops from public cloud leaders?

Oracle turns to bare metal and containers to craft an IaaS platform that's friendlier for enterprise scale-out, but is it compelling enough versus entrenched public cloud rivals?

SAN FRANCISCO -- Oracle is rearchitecting its cloud infrastructure to compete directly against Amazon farther down the stack -- but it's got lots to prove to sway enterprise customers from Amazon Web Services and other cloud platforms headed the opposite direction by getting into higher-level services.
Oracle is relaunching its infrastructure-as-a-service (IaaS) offering with what it describes as a second-generation public cloud platform to bring high availability and more traditional enterprise workloads to its cloud -- and leapfrog the core infrastructure components offered by AWS, Microsoft Azure and Google Cloud Platform.
In the new architecture, introduced here at Oracle OpenWorld, the virtualization occurs at the network level, rather than the hypervisor, so customers can theoretically run any type of workload on top of the infrastructure. All the workloads run in fully private environments, too.
The capabilities on the platform will extend to virtual machines, engineered systems and containers in the coming months, but it is currently limited to bare metal, a popular technology for companies with especially compute-heavy workloads, such as gaming companies. Oracle isn't the first to offer bare metal; IBM SoftLayer is the most prominent platform already on the market.
Oracle has another tact to appeal to enterprise customers: Company execs said its IaaS offerings are not only better in terms of performance and security, but significantly cheaper in total ownership costs.

Inside pitch: Containers and bare metal in Oracle IaaS
Falkonry Inc., a Santa Clara, Calif., startup that provides artificial intelligence for operational data, looked for a place to run its containerized workloads due to displeasure with what was already on the market.
"We found that a number of more mature clouds are less well-designed for technologies that containers support," said Nikunj Mehta, Falkonry's founder and CEO.
Falkonry didn't look at SoftLayer, but it did use AWS and Google Cloud Platform before becoming an Oracle beta customer. The new Oracle architecture leapfrogs the rest of the public cloud market and simply ported over its workloads, Mehta said.
"People want bare metal because they require a lot of compute to run, and the variability in the performance because of noisy neighbors is very undesirable," Mehta said.
Most enterprises find virtualized environments sufficient for their compute needs, but industry observers indicated the bare metal also could serve as an easier onramp for more traditional scale-out workloads, such as database applications.
Another addition aimed at easing the transition to public cloud is the new Oracle Ravello Cloud Service based on the technology acquired from Ravello Systems earlier this year. The service provides nested virtualization to bring VMware workloads to Oracle IaaS and other public cloud platforms.
Those additions, along with the Cloud at Customer service for running a facsimile of Oracle's public cloud behind customers' own firewalls and the recent acquisition of cloud security vendor Palerra Inc., highlight Oracle's desire to make it as easy as possible for customers to adopt its cloud, said Holger Mueller, vice president and principal analyst with Constellation Research Inc.
"If you want to get in this game, and if you want to catch up to Amazon, you have to go faster than Amazon for many, many years," Mueller said. "You can only do that if you make it easier and are more enterprise-friendly to move the rest of the remaining on-premises loads to the cloud."

Bringing the fight to AWS

Catching up to AWS could mean spending tens of billions of dollars to build out its data center footprint and expand its offerings. Regardless, the slow rollout of the new Oracle IaaS offering shouldn't be construed as reticence, said Deepak Patil, an Oracle vice president of product development.

"We are building capabilities where provisioning a new data center is completely automated, so it doesn't require an army to expand into a new region," Patel said. "We're going to be very careful in really mastering that before we go absolutely aggressive going around the globe."
Amazon has made a heavy push to lure Oracle customers to AWS, either through hosting its databases or by migrating to its own services, such as Aurora and DynamoDB. Oracle CTO Larry Ellison dedicated much of his two OpenWorld keynote speeches to talking about how his company is going directly after AWS -- but that focus on infrastructure is misplaced, said John Rymer, vice president and principal analyst at Forrester Research.
Oracle's entire business model is based on high margins, while IaaS is a comparably low-margin business, Rymer said. For Oracle to succeed, it must focus on its applications and high-end database offerings in the cloud.
Oracle repeatedly referred to itself as the fastest-growing cloud company, with CEO Mark Hurd citing the 82% year-over-year growth in platform as a service (PaaS) and software as a service (SaaS). But Oracle IaaS is a different story, with only 10% growth over the same time period and only $171 million of the $969 billion in total cloud revenues, according to its latest quarterly report.
AWS, by comparison, generated nearly $2.9 billion in Amazon's most recently reported quarter, which represented 58% growth year over year. Amazon does not break out its IaaS, PaaS and SaaS numbers, though its infrastructure remains its biggest seller.
Oracle also doesn't release specifics on how many companies are using its first-generation IaaS, though there are "hundreds and hundreds" of users, Patil said.
The new cloud is being built by a team of several hundred cloud architects, many of whom helped build AWS, Azure and Google Cloud Platform. Oracle certainly has a lot of catching up to do, but the enterprise transition to the cloud is, so far, "only the tip of the iceberg," and building this new platform based on lessons learned from previous experiences should benefit those efforts, said Andrew Reichman, research vice president at 451 Research.
"It's great to be first to market, but it's pretty quick that you get trapped in the architecture you built and learn you might have wanted to do it a different way," Reichman said.
The new Oracle IaaS offering includes regions composed of at least three independent data centers located miles apart, with millisecond latency and up to 1 million cores in a single region. Currently, it is only available in the Phoenix region, but it will be extended to a Virginia region by January. Regions in Germany and England are expected to follow by the middle of next year, and expansion to Asia is slated for the end of 2017.

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