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Ch-ch-ch-changes at Oracle’s Cloud Group

January 26, 2017, 3:21 PM UTC

Peter Magnusson, the engineering exec who joined Oracle with considerable hoopla in 2014 to direct that company’s push into public cloud services, is no longer guiding that work, several sources close to the database giant confirmed.

Now, Don Johnson, a former Amazon Web Services senior engineer, who also joined Oracle in 2014, is leading Oracle’s strategy in this area. Johnson, according to his LinkedIn profile was promoted from vice president to senior vice president of cloud earlier this month.

Both Magnusson and Oracle(ORCL) declined comment for this story.

The news comes a week after Oracle president Thomas Kurian and co-chief executive Mark Hurd updated the world about Oracle’s progress in cloud, announcing a range of services including a cloud-based load balancer and the availability of its database from Oracle-hosted bare-metal servers.

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Oracle is late to the world of public cloud, where Amazon (AMZN) Web Services (AWS) blazed the trail starting in 2006. In this model, a single company aggregates masses of servers, storage, and networking and offers those resources to customers, most of whom want to reduce spending on data centers.



In 2009, Oracle co-founder and now chief technology officer Larry Ellison famously disparaged this model. Flash forward to December 2016, when Oracle claimed huge adoption for its cloud services during its second-quarter earnings call. The bulk of $1.1 billion in total cloud revenue reported by the software giant came from cloud-delivered versions of Oracle’s business software, not Amazon-like cloud infrastructure services. That’s important because most modern application development is moving to the latter model.

That’s probably why Magnusson’s arrival at Oracle was heralded three years ago. He had worked at Google (GOOG) on Google App Engine for application development and deployment. He left there for a six-month stint at Snapchat. From there he joined Oracle, which was ramping up hiring for cloud, offering big money to recruit talent from other cloud providers.

Forrester (FORR) analyst John Rymer said Oracle is doing well selling its key business applications online, and that its $9.3 billion purchase of NetSuite, last year will help with that initiative. NetSuite offers online software that helps companies with accounting, inventory, and other related business processes.

But it is still playing catchup in public cloud.

For the quarter ended Nov. 30, 2016, Oracle reported revenue of $878 million from two cloud categories known as Software as a Service and Platform as a Service. (Those are the techie descriptions for software applications and software development tools delivered from Oracle data centers.) Revenue for AWS-like public cloud infrastructure services was $175 million for the quarter, up 2% from the year-ago period.

For more on Oracle, watch: [fortune-brightcove videoid=5053957563001]

By contrast, AWS in October reported third-quarter revenue of $3.2 billion. Amazon will announce its first-quarter numbers later Thursday.

Critics say it will be hard for Oracle to match the multiple billions of dollars that Amazon, Microsoft (MSFT), and Google (GOOG) are pouring into infrastructure services annually. In an interview with Fortune a year ago Magnusson said Oracle could easily field enough cloud data center capacity to deal with 99.9% of the Fortune 500 workloads it needed to handle.

And last week, Oracle said it’s bringing three new cloud data center regions online now, with more to come.

Date: (01/26/2017 12:05 p.m.) This story was updated to add a reference to Magnusson’s interview last year.

Date: (01/27/2017 11:19 a.m.) This story was updated to reflect that Magnusson had no comment.