Oracle Head Larry Ellison Talks A Big Game Against Amazon Web Services
Larry Ellison, Oracle’s executive chairman, said Sunday during the company’s annual customer conference in San Francisco that he considers Amazon to be Oracle’s number one competitor when it comes to the business of selling computing capacity on demand, also known as cloud computing.
Amazon Web Services is currently considered the leader in cloud computing, according to many technology analysts and observers. A recent Gartner report said that Amazon’s S3 cloud storage service holds more than double the amount of customer data than the next seven cloud service providers in total.
Ellison has been stepping up the rhetoric against Amazon (AMZN) over the past year, as Oracle (OCLCF) attempts to make a big business selling computing resources on demand, which technology analysts also refer to as Infrastructure-as-a-service (IaaS).
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In its latest earnings report, Oracle said it brought in $171 million in sales, a 7% year-over-year increase. Amazon, however, reported in its latest earnings that it’s IaaS business landed $2.89 billion in revenue, a 58% year-over-year bump.
Ellison took many opportunities to boast about Oracle’s new cloud services, like one called Cloud@Customer that lets customers run Oracle’s cloud computing infrastructure services within their own so-called on-premise data center infrastructure.
When it comes to selling cloud software services, he said, Oracle competes with Workday (WDAY) and Salesforce, and not its longtime historical rival SAP (SAP). Additionally, when it comes to selling computing capacity on demand, Oracle’s number one competitor is Amazon, not IBM (IBM) or EMC, two other legacy enterprise companies.
“This is breathtaking change,” Ellison said, in regard to how the rise of cloud computing has altered the enterprise technology landscape and introduced “a whole new set of competitors.”
Ellison acknowledged that Amazon “is a pioneer” when it comes to selling cloud computing resources on demand. He compared the business of selling computing on demand to that of how utility companies sell gas and electricity.
Still, Oracle faces stiff competition in the cloud computing business.
Although Ellison detailed some of his company’s cloud computing technology and explained what would happen if one of Oracle’s data centers were to go offline (the underlying infrastructure is so reliant that customers shouldn’t “even know about it,” he said), he did not reveal specific plans on how Oracle would be building out data centers across the world, or which new locations it’s scouting. It should be noted that Amazon, Microsoft, and Google also boast of similar so-called fault-tolerant data center architecture.
The business of selling computing capacity on demand requires a lot of spending on data center infrastructure, with cloud providers like Amazon, Microsoft, and Google all spending billions of dollars a year. Oracle said in its latest quarter that it spent $299 million on capital expenditures relating to data centers.
Ellison said that Oracle’s cloud computing strategy takes into account the idea that customers want to use a mix of their own data centers, as well as those from providers, an idea that some refer to as a “hybrid cloud,” which Microsoft has also claimed it supports.
He took a shot at one of Amazon’s database services, saying that it only works on Amazon’s cloud service and that “if you try to run it on someplace else, it just doesn’t work.”
Ellison also claimed that Oracle would sell its cloud services cheaper than Amazon, underscoring the competition among cloud computing providers when it comes to pricing for their services.
“If you aren’t wiling to pay less, you can’t place the order,” Ellison joked to the crowd.
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And like the spiraling number of companies that have been debuting artificial intelligence and related data-crunching services, as well as so-called chatbots, Ellison talked about Oracle’s own versions of the trendy technologies.
Also on Sunday—and likely not a coincidence—Oracle rival Salesforce (CRM) unveiled more details on its Salesforce Einstein artificial intelligence technology. The developments will supposedly imbue Salesforce’s marketing, sales, and other cloud software tools with more advanced data crunching capabilities.