Oracle progresses its aggressive cloud strategy

Madan Sheina, Lead Analyst, Software – Information Management

It hardly rains in Palm Springs, California. But there was a great deal of talk about clouds at Oracle’s recent CloudWorld analyst conference.

Oracle presented an update on the aggressive cloud strategy it unfolded at last September’s Oracle OpenWorld conference, where it made a score of announcements around its PaaS, IaaS, and SaaS offerings. Oracle has made significant incremental advances across both its public and private cloud portfolio offerings and clearly communicated its direction for the cloud – though many of the specifics around roadmaps were under non-disclosure agreement.

The company is committed to delivering a comprehensive suite of private and public cloud services integrated across SaaS, IaaS, and PaaS. A key question, however, is how flexible those products and services are beyond the Oracle technology stack (the so-called red stack).

Oracle is firmly committed to the cloud

Oracle was initially dismissive of the notion of cloud computing, and its CEO had (rightfully) pointed out the hype surrounding it. Hence, five years ago, Oracle was generally perceived to have been slow to respond to the cloud. That’s changing: Oracle is now investing heavily to progress its cloud product-development strategy, and the three tenants of Oracle’s private and public cloud offerings – IaaS, PaaS, and SaaS – continue to evolve at pace.

Roadmaps presented across all three were discussed under non-disclosure agreements, so we can’t divulge specifics. What we can say is that Oracle is aiming to offer an equally integrated “red stack” in the cloud as it offers on-premise.

That will not happen overnight and there’s still much work to do – reflecting perhaps the amount of budget and resources (over 20,000 developers) working to flesh out the red Oracle cloud. This is a big investment by Oracle given the interdependencies and collaboration across different product divisions; product integration; and rollouts that need to be coordinated and reconciled.

The key will be communicating the cloud strategy to the vast existing base of on-premise Oracle customers, emphasizing the choice and delivery of hybrid delivery architectures, as well as the ability of Oracle’s sales force to be incentivized to price/sell subscription-based deals without cannibalizing the lucrative base of on-premise license revenues.

Enhancements, delivered and planned, across IaaS and PaaS

On the IaaS side, Oracle is focusing on enhancing compute to take on the likes of public cloud incumbents like Amazon AWS. For PaaS, Oracle is building out this platform piece by piece, with the aim of making it easier for large IT shops to configure and control their cloud deployments, and including more BI, Big Data analytics, integration, and process management capabilities.

It will especially appeal to Oracle customers for enterprise application extensions, into areas such as document services. A notable feature is the ability for self-service provisioning of PaaS from the Oracle Marketplace online store. Nevertheless, Oracle needs to improve its offering to catch up with the competition, namely AWS, Google, and Microsoft. In the meantime, it appeals mainly to Oracle customers who want a single provider – which is a big enough base to make it a lucrative opportunity.

Oracle’s PaaS offering is older but not necessarily stronger than its IaaS proposition. It combines Java-as-a-service and database-as-a-service offerings, as well as unified public-private manageability capabilities (enabled by Oracle Enterprise Manager), which will appeal to IT and developers. A trump play could well hinge on Oracle’s DBaaS strategy, specifically enticing Oracle’s large Oracle Database 11g or 12c installed base to the cloud – integrated via bundled-in RESTful HTTP services and leveraging Oracle Database 12c’s (and Exadata’s) multitenant architecture.

For business users there are promising social platform capabilities around collaboration and workflow process, which still require further thought and development.

Oracle continues to push deeper into SaaS

SaaS is clearly the most mature part of Oracle’s cloud strategy, and the company is experiencing good traction in this area with an expanding suite of application service functionality, notably a sharper focus on CX, HCM, ERP, EPM, and SCM. Expanding its SaaS portfolio remains a priority for Oracle; its acquisitions of Eloqua, Responsys, and BlueKai in the marketing-automation space are testament to that.

Oracle is not alone in eyeing the SaaS market, and faces some stiff competition. One possible differentiator could be to leverage its foundational Social Network software across its SaaS solutions to enhance user experiences across its cloud solutions.

Information-as-a-service remains a vision

Oracle’s IaaS, PaaS, and SaaS efforts have been supplemented by a fourth pillar called “information as a service,” intended to integrate information alongside the delivery of SaaS cloud applications and to extend the value of existing vanilla SaaS applications by integrating internal first–third party (Open) data with analytics as part of its cloud and Big Data analytic services.

It’s still early days for information-as-a-service, but Ovum believes it will relate closely to business intelligence-as-a-service (BIaaS). Cloud BI and analytics have always been magnets for private and public cloud deployment, and Oracle is striving to deliver a full range of BI tooling and packaged analytic applications via the cloud.

Ovum believes that BIaaS holds the key for Oracle’s information-as-a-service vision – where information escalates and is integrated from multiple sources (cloud and on-premise) and requires (often realtime) embedded analysis to transform it from data to actionable information and intelligence.

Current offerings veer toward Oracle’s Transactional BI suite embedded in Oracle’s SaaS ERP, HCM, and CX solutions. But Oracle is now expanding towards EPM in the cloud – Planning and Budgeting went into general availability last month and Financial Reporting is in the works.

Public BI cloud offerings are also in the pipeline, based on OBIEE and Oracle Database provisioning, with availability expected in the first half of 2014. Further down the road, users should expect cloud-enablement of Oracle’s packaged BI Applications suite in its Exalytics platform, with consolidation of multiple BI instances as a key driver.

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