At the OpenWorld conference in San Francisco Larry Ellison proclaimed “Amazon’s lead is over”, referring to Amazon’s sprouting cloud computing infrastructure known as AWS. Throwing down the gauntlet, Oracle’s CEO went to elaborate that “Amazon’s going to have serious competition going forward”. Oracle is launching Oracle Dense Cloud IO bare metal cloud server platform that includes 36 CPU cores, 512GB of D-RAM, and 28.8TB of SSD storage, all that computing power at a flat rate of $5.40 an hour.
There is no doubt that Oracle is capable to squeeze out Amazon out of a few lucrative segments of the cloud computing market and steal some market share. Oracle and its leadership have all it takes for aggressive market move – reputation, resources, technology and better connections in government markets. Yet Oracles lacks one thing that ultimately made Amazon so successful in the cloud space. Amazon is a developer-community oriented company with a focus on individual user, SOHO and SME segments. Amazon is keen to keep its pricing model flat and simple and its open-end infrastructure, user-friendly and accessible for an average computer literate Joe. On the other hand Oracle has a long tradition of complex and ambiguous licensing agreements, focus on large government/corporate customers and closed-end systems. Winning the market from downstairs may prove more difficult than Larry Ellison perceives and Amazon is already there with lock, stock and barrel.
There is an another aspect of Oracle gunning for Amazon, in doing so Oracle will inevitably cannibalize its own highly lucrative markets. Shares of Oracle (ORCL) went down almost 5%,after the company reported fiscal Q1 revenue and profit that missed analysts’ expectations. Forecasts for this quarter are lower as well and there is no growth in the traditional license software business’s revenues. In the long run Oracle is on losing streak in this game.