Oracle Seems Delusional About the Cloud

Oracle Open World (OOW) is here and, what else is new, we keep hearing the rhetoric message that they are better, faster and more scalable than everybody else. Yesterday, however, Oracle too its message a step further and, while unveiling a new group of cloud technologies, proclaimed that “Amazon lead was over” a message that took by surprise to even the most hard core Oracle fan boys.

Other than making for a good headline in The Wall Street Journal, Oracle’s statements seems completely out of context. Oracle is certainly capable of capturing a meaningful market share in the cloud space. However, Ellison’s statement about Amazon still seems ridiculous. Without getting passionate about the topic, let’s try to present a pragmatic analysis of the market share and advantages of Oracle Cloud offering and you can drive your own conclusions from there.

AWS is not the Right Target

Logically speaking, focus on competing with AWS seems like the wrong objective for Oracle. Currently, AWS controls over 30% of the market and Oracle barely appears on the charts trailing not only Microsoft, IBM and Google Cloud but also the offerings from companies like Pivotal or HP. The right goals for Oracle Cloud should be, first, to establish a solid #5 position in the market and, after that, focus on competing with Google and IBM for the #3 spot. Both IBM and Google are really focused on the enterprise cloud market which makes them a viable target for Oracle Cloud. If after achieving those goals, AWS and Azure haven’t been able to consolidate their market leadership position, then Oracle can focus on competing with those cloud offerings.

Putting aside the current state of the market, let’s try to analyze the pros and cons of Oracle Cloud

Five Challenges for Oracle Cloud

— Large Gap on Basic Capabilities: Currently, there is still a large gap between Oracle Cloud and the cloud market leaders on basic capabilities such as storage, compute, database support, etc.

— No Traction in the Consumer Market: Cloud platforms such as Google Cloud, AWS and Azure have developed meaningful traction within the consumer market. Oracle Cloud is solely focused on the enterprise which makes it extremely difficult to displace the aforementioned players.

— Lack of Emerging Technology Services: Oracle Cloud doesn’t include relevant services in emerging technology areas such as machine learning, IOT, artificial intelligence, blockchain or other areas that will drive innovation in the next decade of cloud platforms.

— Small Developer Community: Oracle Cloud’s developer community is relatively small compared to the equivalent in the cloud market leaders.

— Missing Unique Technology Offerings: Bluemix’s Watson, Google Cloud’s BigQuery, Azure’s Service Bus are some examples of unique cloud services that have helped to attrack developer and customers to those cloud platforms. Currently, Oracle Cloud is still missing that unique technology offering and will increase the relevance of its cloud offering.

Five Strengths of Oracle Cloud

— SaaS Offering: Oracle’s large SaaS portfolio is likely to indirectly influence the adoption of Oracle Cloud.

— Enterprise Sales Mastery: Oracle can leverage its extensive sales organization to efficiently position Oracle Cloud in large enterprises.

— Partner Community: Oracle’s large system integrator partner community could be a strong asset to accelerate the implementation of Oracle Cloud.

— Oracle DB and Weblogic Migrations: There are many enterprises that could take advantage of Oracle Cloud to port their existing Oracle DB or Weblogic solutions to a cloud infrastructure.

— Cloud Solutions in Regulated Industries: Oracle’s strong presence in regulated markets such as finance, defense or public sector can result in a unique position to drive the adoption of solutions powered by Oracle Cloud.

CEO of IntoTheBlock, Chief Scientist at Invector Labs, I write The Sequence Newsletter, Guest lecturer at Columbia University, Angel Investor, Author, Speaker.

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