Oracle Buys Ravello to Strengthen its Cloud Story


Oracle went to battle with Hewlett-Packard last year after it tried to stop making software for devices using its rival's Intel Itanium server chip. Oracle lost the suit—and HP is seeking a reported $4 billion in damages. Documents unearthed during the litigation process revealed Oracle EVP Keith Block's distrust in president Mark Hurd's hardware plan for the company, pertaining to its 2010 acquisition of Sun Microsystems. (Block eventually resigned.) But the mess didn't keep the tech giant from having a successful 2012. Oracle's software business propelled sales, helping profits rise 16.8% to $10 billion. -- C.L.
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This is interesting: Oracle has confirmed that it is buying Ravello Systems, a company that specializes in making it easy (well, easier) to move workloads from one environment to another, say workloads running KVM or VMware virtualization on-premises to Amazon or Google public clouds.

Given that Oracle (ORCL)is late to the public cloud game, acquiring a tool set that makes it simpler to vacuum up existing on-premises workloads to its cloud infrastructure seems pretty much a no-brainer.

For example, Ravello’s Direct Upload, announced at AWS Re:Invent in 2014, claims to clone a customer’s entire VMware (VMW) vCenter environment on Amazon (AMZN) Web Services or Google (GOOG) Cloud Platform. AWS, Google Cloud Platform, and Azure are the three big public clouds—meaning that they pool huge numbers of servers, storage, and networking that are then shared by multiple customers. Oracle (ORCL) wants to break into that triumvirate.

Those on-site VMware installations are the mother lode of opportunity for cloud providers, as evidenced by Monday’s IBM (IBM) and VMware announcement about “one-button” migrations from vSphere to IBM SoftLayer, running a full complement of VMware NSX networking and other technology.

No terms of the Ravello deal were disclosed, but one observer who claimed knowledge of it put the price at about $500 million while Israeli newspaper Ha’aretz reported it to be in the $400 million to $450 million range. Ravello is based in Palo Alto, Calif. but maintains a research center in Israel.

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This is an arena where nearly every tech player—Cisco (CSCO), IBM, Hewlett-Packard Enterprise (HPE), VMware, and Microsoft (MSFT) (basically everyone but Amazon) cite huge demand for hybrid cloud. In this model, customers can keep running some work in-house and other work in a public cloud.

As noted, Oracle is late to the public cloud market, which Amazon kicked off in 2006, since co-founder and chief technology officer Larry Ellison’s view on cloud has, um, evolved over the past few years. But the company now appears to be getting its act together, as evidenced by this purchase and others. Ravello employees will become part of the Oracle Public Cloud team headed by Google App Engine veteran Peter Magnusson.

A few months ago Magnusson told Fortune that Oracle is focused on competing with Microsoft Azure for enterprise-class workloads. He does not view Amazon Web Services, the market leader in public cloud, as a viable alternative for big businesses—the Fortune 500 banks, insurance companies, and pharmaceutical companies governed by strict compliance and regulatory requirements.

Suffice it to say from follow-ups and comments about that story, he is in the minority there.

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In a post to the Ravello web site, chief executive Rami Tamir wrote:

Rest assured, Ravello’s service will continue “as is.” In the coming months, we will be working to continue enhancing our value to you and we are looking forward to developing new products and services enabled by this combination.

But his next statement was all about Oracle Public Cloud so you have to wonder if an Oracle-owned Ravello will continue to funnel customers’ on-site work to Google and AWS public clouds rather than Oracle’s public cloud.


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