An Overview of Oracle Cloud Strategy, Tactics, and Value

If you track the large wave motions of the major providers in enterprise cloud computing, with the exception of Oracle, all the major providers have made loud recent splashes:

  • SAP dove in headfirst with its HANA cloud platform at the October, 2013 TechEd conference.
  • Amazon Web Services (AWS) underscored its position as first mover shark in the IaaS pool at its re:Invent event in November, 2013, emphasizing the success of its marketplace.
  • unveiled the changing of the waters of its fresh cloud platform, Salesforce 1, at its Dreamforce event also this past November.
  • Microsoft whetted the curiosity of the entire IT industry by elevating the leader of its cloud business to CEO in February.
  • IBM poured it on when it unveiled several billion dollar-plus cloud investments early in 2014, and kept up the pressure with announcements at its February Pulse conference.

Do not be fooled if, relatively speaking, Oracle seems to be just swimming along on the cloud front.   Despite the lack of a recent major conference platform – Oracle OpenWorld was back in September, 2013 and did mainly focus on cloud by-the-way – Oracle has produced a constant stream of non-trivial expansions to its cloud offerings.  Before jumping into which of Oracle’s many cloud offerings may grow most in amplitude and what other key cloud innovations Oracle has in the tank, let’s set the record straight about Oracle’s cloud commitment and strategy.

Oracle Cloud is an Enterprise Cloud

Given that Oracle is the largest enterprise software vendor on the planet, the challenge and opportunity for Oracle to help customers take advantage of cloud will play out over the course of this decade and well past 2020, on all possible cloud fronts, IaaS, PaaS, and SaaS.  There are two reasons why it will take so long.

The first reason is that word “enterprise” in the realm of cloud computing carries critical implications about security, uptime, governance, operations, and customer experience.  Oracle takes those “enterprise” implications seriously.  Oracle aims to ensure that Oracle Cloud offerings are certified, accredited, protect privacy, and meet whatever gold standards are established.  This isn’t just about identifying Service Level Agreements (SLAs) and keeping fingers crossed, but about delivering the same level of dependability customers enjoyed on-premise.

For Most Customers Oracle Cloud is a Private or Hybrid Cloud

The second reason has to do with the fact that, according Oracle EVP Thomas Kurian, customers say that “We can’t throw a switch and move all our apps to the cloud.”  Given that in many cases Oracle cloud customers are from the Global 2000 and the world’s governments and public sector, interest in private cloud is as high in the Oracle ecosystem as any vendor ecosystem.  Mr. Kurian said that interest in private cloud in the Oracle customer base runs higher than interest in public cloud “by orders of magnitude.”  Enterprises also understand that they cannot typically use vanilla SaaS apps.

Oracle’s angle, therefore, is to provide an “integrated hybrid approach” for customers.  The idea is allowing on-premise apps and SaaS apps, whether housed in public or private cloud, to directly share data and process.  The other Oracle design goal is to make “tailoring and configurability easy; to make it simple to insert an object into vanilla SaaS.”

Helping Customers with the Cloud Transition

Oracle’s approach runs somewhat counter to AWS, and reflects a deeper level of customer intimacy.  The AWS method is 100% SLA-driven:  AWS supplies virtual infrastructure, and hosts a plethora of technology services, some of its own plus others in its marketplace.  You sign up for a variety of services at certain service levels, and off you go, you are on your own.  Oracle’s sees the purely SLA-bound transition to cloud as too abrupt for many of its customers.  Oracle plans to set itself apart by catering to the complex transitions enterprise customers face in taking advantage of cloud.

That doesn’t mean that Oracle will not sell IaaS services using SLA-bound terms, but that it will also go the extra mile in its cloud portfolio to provide interoperability, and even operate clouds on behalf of customers.  Oracle’s enterprise middleware DNA enables it to approach cloud adoption from the customer’s business viewpoint, understanding that data and process are what are truly important; spinning up virtual servers and storage, from a value proposition perspective, don’t come close to offering integrative applications producing positive customer and employee outcomes.

The long-term chink in AWS’ armor is precisely that it is only and exactly a digital service warehouse.   Of all of the cloud providers, Oracle, IBM, SAP, and to a lesser extent Microsoft and, are closest to being in their customers’ shoes from a business perspective.  Oracle will succeed in cloud by ensuring it helps customers deal with the intricacies of transition, by maintaining the reliability customers have come to expect from on-premise, and by pushing business-oriented interoperability.

Tactically to that end Oracle is working on customer migration sequences and tools, with over 20 scenarios already in the works.  Try calling up AWS or or Microsoft Azure and asking them, “This is what our application portfolio looks like, what makes sense for us to do to move some of our portfolio to the cloud?”  IBM and SAP could eventually concoct feasible answers, but Oracle may already have a proven path for you to consider.

Hits and Misses

Oracle’s cloud initiative is overwhelming in scope, and enumerating everything Oracle is up to in cloud would require multiple volumes.  There are, however, many initiatives that show great promise or have already delivered on promise, and there are a few of areas of concern.  Here are the hits and misses:

Hit – Thoughtful SaaS Portfolio Design:  In the on-premise days ERP vendors like Oracle and SAP focused on “suites.”  In the cloud era, given that most enterprises cannot “throw the switch,” something in-between a suite and individual apps makes more sense.  Oracle has reconfigured its SaaS portfolio to reflect logical groupings of apps.  For example in its “modern ERP” offering Oracle includes financials, project and portfolio management, enterprise performance management, procurement, and governance/risk/compliance (GRC) apps.  ERP in this cloud modernized context does not include, for example, HCM, manufacturing, CRM, and SCM. Customers may start with just one SaaS app within a group, or a few, or even the entire group, but the idea is Oracle’s SaaS roadmap focuses at the group level where the preponderance of shared data and business process are commonly housed.

Hit – SaaS with PaaS:  Oracle assumes that every SaaS implementation will require customization, and therefore all home grown Oracle SaaS apps use the same Oracle Cloud PaaS, and customers and partners may then customize using the tools of the Oracle Cloud PaaS.  In addition, over time Oracle will migrate its acquired SaaS apps to the Oracle Cloud PaaS.

Hit – Cloud Operations:  Under the guidance of Laef Olson, SVP of Oracle Cloud Operations, Oracle has built out a world-class, global cloud operation.  Oracle Cloud Operations provides 24x7x365.25 follow-the-sun support, and is delivering on the design goal of offering all customer cloud administration through a “single pane of glass.”  Many customers will be comforted by the fact that Oracle Cloud Operations only uses Oracle employees, outsourcing firms need not apply.  Mr. Olson, who came to Oracle via its RightNow acquisition for SaaS customer service, believes the Oracle-employee-only approach is a key factor in delivering the enterprise quality Oracle promises.

Hits – Oracle Database 12c and Database Cloud Service:  Oracle already offers the less than a year old Oracle Database 12c for both public and private cloud, and the interest and pipeline is intense.  Oracle, however, is looking to offer an Oracle managed version and a “RAC” version in the not too distant future.  Oracle also offers what is sometimes referred to as “schema as a service” to provide smaller databases up to 50GB in size.  The Oracle 11g service, officially known as Oracle Database Cloud Service, offers developers a good pairing for what Oracle calls its Oracle REST Services to enable two tier browser-to-database apps.  Some of Oracle’s future offerings for expanded Oracle DbaaS choices, including Oracle managed databases, are previewed on the same site.

Probable Hit – INaaS:  INaaS stands for “INformation as a Service” and Oracle is rolling out its first such service focused on marketing, which probably has much to do with its recent BlueKai acquisition.  Oracle, however, deserve big kudos for realizing that customers increasingly want data along with their apps, and for taking on the role of data aggregator.  Oracle realizes that the future to being data-driven for many enterprises involves collecting and melding 1st party, 3rd party, and open data.  INaaS stands out as arguably Oracle’s most creative new service initiative in recent memory.

Probable Hit – Moving to a Single UX:  For two years Oracle has been working on moving all applications to a common user experience (UX), including even on-premise PeopleSoft.  SAP is doing the same thing with its SaaS apps, albeit not its on-premise apps, using its Fiori experience design.  Thus, Oracle, like SAP, has committed to a common UX, including converting acquired SaaS apps to that UX.  Oracle has gone a step further by extending that commitment to on-premise apps, again in the spirit of smoothing the transition to cloud.  While it not yet possible to confirm how effective the new Oracle UX is Oracle refers to it as “brilliant.” Presumably, it is a significant improvement over the client-server era adapted-to-Web UX that has made using enterprise apps more of a chore than a pleasure for the past 20 years.

Possible Hit – Manufacturing SaaS:  Oracle is working on a true manufacturing SaaS, not a quasi-cloud hosted version of the existing manufacturing apps, not a “service manufacturing” version either, but a true, discrete-oriented SaaS., Workday, and NetSuite are likely nowhere near such an offering.  It isn’t clear yet where SAP stands on offering a pure manufacturing SaaS, other than its hybrid “Business by Design” version, but SAP should pay close attention.

Probable and Possible Hit – MWaaS:  MW stands for middleware, and GVP Amit Zavery provided elucidation on a long list of existing “middleware as a service” tools and features, and outlined several more in the pipeline.  Given that IBM Cloud currently focuses mainly on custom developed apps because it lacks, relatively speaking, a wide portfolio of SaaS business apps, IBM has jumped into this space with both feet, and SAP is similarly investing.  Oracle’s MWaaS aims to span development beyond purely custom to include application extensions and add-ons.   The portfolio runs both wide and deep with PaaS services for WebLogic, lighter weight server-side Java, messaging, integration (both data and BPM), and developers.  Customer may provision these services in a packaged fashion, or singularly, and with or without database.

The “possible hit” has to do with Oracle MWaaS not only targeting Oracle Cloud, but also 3rd party public and private clouds.  In theory, if you deploy Oracle database, and Oracle Cloud PaaS/MWaaS in a 3rd party cloud you should also be able deploy Oracle SaaS apps; check back in a few years.

Possible Miss – Oracle Cloud Marketplace:  Entrepreneurial developers are making bets on the cloud.  Should they work with newer players, building and provisioning entirely under their own control?  Or should they pick out an ecosystem, such as Oracle or SAP, and use those tools, clouds, and the SaaS apps as a baseline knowing they cannot compete with the primary SaaS providers, but merely augment?  Many of Oracle’s communities of developers and consultants have not yet caught Oracle Cloud fever.  Despite some growth on the Oracle Cloud Marketplace, the number of apps and interest remains too low, and it would behoove Oracle to invest further in motivating the 3rd party app development community.

Possible Miss – Marcom:  If it isn’t clear already, there is plenty going on with Oracle Cloud.  Unless you are one of the lucky ones to find time to attend sessions on Oracle Cloud, and you should if Oracle ranks as one of your key vendors, you are probably unappreciative of Oracle’s considerable cloud capabilities.

Perhaps Oracle has decided to use internally oriented marketing and communications to enable the sales team to tell the Oracle Cloud story directly to customers and partners, eschewing public influence.  Oracle, however, could do a better job of getting the word out in general.  Oracle is competing against the active marcom initiatives of IBM and SAP, and it is unlikely Microsoft will trumpet Azure any less given the orientation of its new CEO. lacks any fear of self-aggrandizing in public.  Oracle should turn up the volume.  There is no lack of press releases at the product/service level, but Oracle offers customers some real differences from other cloud providers, and that value-based story is not yet generally understood.

EMA Perspective

For those unconvinced about Oracle Cloud, Oracle is not only on track, but it offers customers a well-architected approach for cloud transition.  Oracle is working simultaneously hard on all three fronts of cloud, IaaS, PaaS, and SaaS, and developing a portfolio and approaches that help its customers move towards the benefits of the cloud without trading in the benefits of on-premise.  Oracle still needs to do work inspiring the long tail of the developer community and getting the word out in general, and somehow needs to stick to the goal of making it simple for customers even though Oracle brings so much technology to bear.  For those of you, however, that simply couldn’t utter “Oracle” in the same breath as “AWS, Azure, Salesforce,” the time has come to take a deeper breath, for Oracle Cloud has broken the surface.