USA TODAY International Edition
Oracle’s Ellison declares cloud war on Amazon
‘ Amazon is going to have serious competition,’ he says
Oracle’s future SAN FRANCISCO is in the cloud, and that means war with Amazon, Larry Ellison vowed in what amounted to a major new product direction for the computing giant on Sunday night.
“Amazon’s lead is over,” the billionaire software mogul, who is now Oracle Chief Technology Officer, said in an hour- plus- long speech to open Oracle’s annual show for developers and customers here. “Amazon is going to have serious competition going forward.”
The business opportunity for cloud computing is immense. Roughly onefourth of large North American and European companies use public cloud platforms from Amazon, Microsoft, Google, and IBM — about a $ 20 billion market. By 2020, it will be $ 64 billion, according to a new report from Forrester Research.
“We’re in the middle of a generational change — from onpremise computing to super data centers called clouds,” said Elli- son, who highlighted the company’s aggressive push into cloud infrastructure services this year. Tuesday, Ellison is scheduled to deliver a second keynote speech, in which Amazon is targeted.
The Silicon Valley company, which announced several products and services for corporate customers, including machine learning and artificial intelligence applications, has plunged into the cloud market for apps and databases as demand for its core software licenses cools.
In July, it said it would pay $ 9.3 billion in cash to buy NetSuite, a cloud computing company cofounded by Ellison.
These forays have increased its cloud- based revenues rapidly, but they’re still a tiny part of its overall business. Now, it’s planning a much more aggressive campaign to win customers in the huge cloud- based infrastructure market. As of last year, Oracle wasn’t even among the top five of these providers, according to Synergy Research Group.
Shares of Oracle rose about 1%, to $ 39.23, in trading Monday.
Oracle is rumbling into a nascent market. Only 6% of corporations worldwide are spending on cloud solutions specifically for databases and analytics, according to research firm IDC. The figure is expected to jump to 30% by 2020 as big business migrate to the technology for competitive reasons.
Collectively, IDC pegs those markets at $ 43 billion today. As the world leader in database software, this gives Oracle an advan- tage in the all- important market for corporations to parse reams of data floating in the cloud, analysts say.
“It is still relatively early,” says Dan Vesset, analytics and information management analyst at IDC.
It won’t be easy, as Oracle has belatedly joined the fray.
Amazon Web Services is the dominant cloud infrastructure business, with $ 2.89 billion in revenue in its second quarter ended June 30, up 59% from the same quarter a year earlier. Its customers have sunk millions into AWS for years and are unlikely to switch, analysts say.
Oracle last week said its total cloud revenue soared 59% to $ 969 million for its first fiscal quarter ended Aug. 31.