Oracle is gunning for AWS with new infrastructure offering
computerworld.com
computerworld.com
AWS isn't merely about the compute. EC2 is just part of a larger ecosystem of infrastructure services that has been built out by amazon over the past 10 years. If Oracle thinks they can beat that, then more power to them but I'm not quite convinced.
I'm happy that there's more competition but Oracle's offering seems more like empty words rather than concrete competition.
Maybe they'll now stop pouring resources into the Google lawsuit and actually pursue building new useful products.
So it's a question whether they think they need to beat AWS on price or not. AWS pricing certainly makes it very clear that Amazon have no interest or need to compete on price - a lot of the cloud market is extremely price insensitive.
It's a curious effect that seems to be largely down to businesses not used to paying as close attention to the long term opex costs of cloud infrastructure vs capex spend on servers etc.. E.g. I have had clients who paid more just for bandwidth with AWS than their whole infrastructure cost after migrating them elsewhere (AWS bandwidth is easily anywhere from 5x to 50x as expensive as elsewhere depending on location)
Manpower and a Stable network is anywhere from 100x to 1000x as expensive as just hosting on AWS.
I've not ever seen any non-AWS setups where manpower or network stability contributed anywhere remotely enough to operations to eat up the cost advantage over hosting elsewhere.
There are good reasons to use AWS, if you can leverage their various services, and hosting isn't a large part of your cost, but price is not it.
I've done the datacenter thing many times and there are so many pieces to the costs of running your own that most people don't include. The biggest one is just plain agility. Predictable workloads can benefit from self-hosted, but then again you can get much better prices at AWS when your loads are predictable as well if you're willing to commit.
- List Prices are cheaper [-1]
- Google Sustained Use Discounts are like RIs but applied automatically and without commitments (up to 30% off if you use a VM for 100% of a month) [0]
- Preemptible VMs are a fixed 70-80% off, rather than the uncertain and highly variable Spot Instance Market [1]
- Custom Machine Types offer you the ability to set your own CPU/RAM [2]
- Both Google and Microsoft offer per-minute pricing
- VM sizing recommendations will give you a message when you can save money[3]
In the end, Google Cloud can be 40% cheaper than AWS[4]
[-1] https://cloud.google.com/compute/pricing
[0] https://cloud.google.com/compute/pricing#sustained_use
[1] https://cloud.google.com/compute/docs/instances/preemptible
[2] https://cloud.google.com/custom-machine-types/
[3] https://cloudplatform.googleblog.com/2016/09/six-Google-Clou...
[4] http://www.zdnet.com/article/what-google-says-to-aws-price-c...
(disc: work @ Google Cloud)
They have a huge suite of offerings, good reputation, huge amount of third party tooling, and the services themselves are somewhat sticky.
By that I mean, I could probably switch over to your cheaper cloud service. It would mean having my engineers go through and build stuff to fill in the gaps or transition away from things that are very AWS specific.
Or I could just pay a bit more money and keep developing features as AWS isn't too expensive and does what I need.
Moving to cheaper services quickly becomes a big deal for people with low margins and high infrastructure costs, though, where moving to cheaper infrastructure can make the difference between being able to match competitors on price or not.
The key is to understand your hosting needs well enough to know whether or not you can afford to build a dependency on AWS specific services.
They will drop their publicly listed prices once smaller customers gets comfortable enough with cloud services to start seriously shopping around, not before. Larger customers will already negotiate (e.g. I know of one AWS customer with ~75% discount over the listed prices)
> The only place I have a gripe on AWS pricing is bandwidth. I keep waiting for the announcement that bandwidth is being cut in half next month and it hasn't happened.
AWS bandwidth pricing is 5x-50x higher than the providers I usually use. E.g. for the cost of 1TB of transfer at AWS you can rent a server for a month + multiple TB of transfer elsewhere. Cutting it in half would still leave them ridiculously expensive for bandwidth.
> I've done the datacenter thing many times and there are so many pieces to the costs of running your own that most people don't include. The biggest one is just plain agility. Predictable workloads can benefit from self-hosted, but then again you can get much better prices at AWS when your loads are predictable as well if you're willing to commit.
I do the datacenter thing every day, and I also do AWS and other cloud providers every day, and when I move customers to dedicated hosting they typically cut their total infrastructure costs to 1/2 or 1/3 vs AWS costs after considering reserved instances and maintenance costs. For many of them, if they were large enough to get serious attention from Amazon they might have been able to negotiate deals that'd make it cost effective to stay, but I've also had more extreme examples, like a customer that cut their hosting cost to 1/10th.
The agility argument doesn't fly with me - I manage multiple systems that are hybrid mixes of dedicated predictable loads on self-owned or leased hardware, coupled with cloud resources that are "tied in" via VPNs as needed.
With well designed systems, the very availability of cloud makes dedicated hosting cheaper even if you never or rarely use it: Where we before often had to plan for 50% to 100% overcapacity on dedicated hardware to handle spikes (and might still have to just accept that some spikes would slow things down), we can now plan on almost no overcapacity and spin up on-demand instances to take spikes (we need only sufficient overcapacity to react and for additional capacity to come online), or even to shave off the top peaks of daily traffic.
And not a single one of them has anything close to the wide and growing offering that AWS presents.
> AWS bandwidth pricing is 5x-50x higher than the providers I usually use. E.g. for the cost of 1TB of transfer at AWS you can rent a server for a month + multiple TB of transfer elsewhere. Cutting it in half would still leave them ridiculously expensive for bandwidth.
But that bandwidth is usually capped in speed and is dedicated to only that instance. No provider like this can handle all of their clients using 80% of their allotted bandwidth. AWS's bandwidth may be expensive, but it is as elastic as you can get and you are never over-provisioning. It's also negotiable just like anything else.
> but I've also had more extreme examples, like a customer that cut their hosting cost to 1/10th.
I'd be interested to hear particulars of this. Obviously it is your edge case, but I find it hard to believe that somebody can cut their costs that much unless they were way over-provisioned on AWS or they are not really counting all of the costs. I have never seen a DC that didn't have more management overhead to run than a full cloud offering.
I don't think that's an accurate statement. Google Cloud and Azure have broad offerings, and in many cases eclipse AWS (ex: Big Data, ML, pricing, BI, NoSQL, Hadoop/Spark, containers, and even things like load balancers and persistent storage).
And that's why it is sometimes worthwhile using AWS. But most people don't use any of the advanced features of AWS.
> But that bandwidth is usually capped in speed and is dedicated to only that instance. No provider like this can handle all of their clients using 80% of their allotted bandwidth
You are jumping to conclusions that I'm only talking about "all inclusive" server rental deals. That's not the case.
You can buy bandwidth at a committed information rate charged based on a 5 minute 95th percentile billing which will typically end up at ~10% of AWS cost with ease unless you have extremely high/lasting spikes in a vast number of data centres from a large number of providers.
Much less if you take advantage of peering or buy limited transit (e.g. if you're in the UK, and most of your traffic is within the UK, you can cut your cost drastically once you reach any kind of volume by getting peering agreements in place for most of your UK bandwidth use, pay a low cost for Europe-only transit, and pay a higher cost for a much lower amount of worldwide transit; it has a management overhead so it doesn't pay until your bandwidth bill starts growing, which is why most people will start off by taking "only" straight unrestricted transit at a higher cost per Mbps/Gbps)
You can also pay per GB/TB and end up paying far less than AWS.
E.g. at Hetzner, you pay per TB over a minimum limit, just like with AWS. For Hetzner, the current overage rate is €1.17 per TB. I have no reason to assume that they're losing on money on that - they'be be able to hand most of that off via peering agreements.
> I'd be interested to hear particulars of this. Obviously it is your edge case, but I find it hard to believe that somebody can cut their costs that much unless they were way over-provisioned on AWS or they are not really counting all of the costs. I have never seen a DC that didn't have more management overhead to run than a full cloud offering.
They moved EC2 instances to Hetzner instances of roughly same speed. That's all there was too it - Hetzner server prices are low, and their bandwidth prices are as mentioned about €1.17 per TB above a limit per instance that's large enough that they've yet to exceed them, and that's the thing that's making the biggest difference (I've actually in the past cut peoples AWS bills by putting boxes at Hetzner and elsewhere purely as caches in front of their AWS setups because of the huge bandwidth differential - for people who spend much on bandwidth, it can pay for the extra servers many times over)
My experience is that we had no problems meeting similar bandwidth levels per machine as they did at AWS. Management is roughly the same complexity. They ended up using "bare metal" dedicated servers (Hetzner also offers VPSs) so they have access to IPMI to manage reboots etc. as necessary, and Hetzners rescue system lets them reimage the servers at will, so after investing a few k on scripting server installs it's as automated as their AWS setup was. They pay a very minimal extra overhead in an encrypted VPN between instances (and with current setup would pay for bandwidth for that if they exceed the included bandwidth allotment), though you can avoid this with some extra complexity (you can pay Hetzner some small fee and get servers wired up to a private network).
The cost difference includes the per-hour costs paid to keep either service running - the latter setup has actually cost them less in time spent managing it.
Exactly. The idea that Oracle can catch up based on pricing & machine specs ("36 CPU cores, 512GB of D-RAM") is really naive.
My current position on this is that IaaS is pretty much over. Aliyun & AWS seem like they're going to dominate. Microsoft & Google & others fight for the rest. Maybe, just maybe, Oracle will catch up with the 'small' players, but I doubt Microsoft++ or Google will be sitting on their hands wondering how much DRAM Oracle is going to wow us all with next.
Sure, but having a compelling story about compute and having a massive advantage in knowledge of how to sell to the exact kinds of enterprises that haven't already made their big transition to the cloud yet isn't a bad combination to have if you want to establish a nice firm place in cloud. from which you can expand and develop what you need to bite off other parts of the market.
They aren't going to follow the same path as AWS, both because they aren't, as a corporation, oriented toward that path and because the low-hanging fruit you can pick up along that path has already been picked up by AWS.
AWS got a lot of startups and tech savvy companies (like Netflix). If I were Oracle I would target existing customers, who generally are not the tech savvy darlings (think Procter & Gamble, health companies, food companies, banks...) who can now tell their board their on-site Oracle licences have been moved to the cloud.
It's a market Oracle is uniquely qualified to pursue because they already have the sales operation and contacts in place. Now whether they are able to execute is why we are eating the popcorn and watching. The inside sales model is the 20th century sales model after all.
Oracle allows licensing on VMware on a hypervisor level. When VMware allowed you to vMotion between hosts in a vSphere HA cluster, Oracle would require that you license all the hosts in the cluster because the Oracle VMs might land on any of those hosts in a failover situation. When cross-cluster vMotion came with 5.1, the customer was told that they must license every host attached to that vCenter instance, forcing the customer to purchase and implement another vCenter strictly for Oracle.
And now, with vSphere 6, comes cross-vCenter vMotion. You can guess where that conversation with Oracle went. Customer bought an Oracle Enterprise license, which is presumably what the sales rep had in mind the whole time.
Microsoft has a lot of the same kind of sales operation and contacts, and they have a suite of cloud infrastructure that's on par with AWS.
You mean what IBM is doing/has done? Oracle doesn't know how to sell to those people, it knows how to EXTORT those people. Most people I know hate Oracle with a passion as a business, and only continue to do business with them out of obligation.
Don't rule out the power of acquisitions (see: Firebase/Google, Parse/Facebook). Word on the street is that they're also throwing silly mounds of cash at cloud talent.
Seems like a bunch of people around seattle are getting the mounds of cash.
I also know enough about the project to know it is a serious and daring effort and there is every reason to be proud of it.
The development cluster alone is something very special to be part of.
Hope you are enjoying it
Also, Larry Ellison has a history of overselling whatever Oracle's doing, so I doubt the product will be as good as he says in any case.
http://www.businessinsider.com/terminator-genisys-cyberdyne-...
The subquery is optional.
I just got the page about this Sev-2 Sun Microsystems comment on HN, and I am working this ticket. If you haven't already, please see our docs on Why Sun Microsystems Failed[1]. If I don't hear back from you, I will mark this ticket as closed. Thank you for only remembering Sun Microsystems with kindness, and have a great day!
Don't get me wrong, Sun was a great company, but like all companies, it wasn't all sunshine and rainbows. You've said as much yourself before.
I wished to point out that there was a time that Sun wasn't as beloved, and to indicate some of the reasons that we don't talk about some of Sun's less savory actions so much on HN.
If, as an ex-Sun employee, you find this insulting (and the trace elements of sarcasm indicate that this may be so), than I will inform you that it certainly wasn't meant to be so, although I now see why it may come off that way.
Thank you for responding to my ticket, and have a great day!
If you depend on their proprietary software, you deserve what you get.
Oracle might be stupid, but they're not dumb.
For those Fortune 500 companies who've made the shift to cloud services Amazon currently fills the role that Oracle does in data storage. I'm sure there's plenty of Fortune 500 CIOs who are still hesitant to embrace the cloud in general, but If there's a CIO out there who's moving some services to the cloud going with Oracle over Amazon just because its Oracle then they're out of their element.
1.) Amazon has a much higher bar for hiring talent, than Oracle does.
2.) Amazon is internally use to being frugal, and so pricing wars are not going to hurt them. Oracle is use to charging a arm and a leg for their products.
3.) Amazon shareholders are already use to the company not being profitable, where as Oracle shareholders are not.
I knew some Oracle engineers back in the day. They were sharp. I hope they made their millions and got the heck out of that place.
The people who sign the cheques and listen to their salespeople.
I never got to hear the Oracle rep's side of the phone conversation, but everyone within 50 feet of the CIO's office got to hear his.
"Fine! You want to fuck me on these licenses! Go right ahead! And then I'll turn around and fuck you by throwing you out of our datacenter!"
Organisations do not realise the risk they face with closed source software. You are basically at the mercy of your vendor.
I believe any a CTO/CIO worth their salt would require motivation on why to use proprietary software vs open source. Is there absolutely no alternative?
As an engineer, I like to think of this primarily social problem like trying to focus a huge, distributed system architecture upon as few languages and platforms as possible. With most enterprises having grown through dozens, maybe hundreds of mergers they have a huge zoo of different stuff to support culturally. You could try integration approaches like message buses and such, but there's a lot of people overhead involved there and it gets really ugly when everyone disagrees upon the message bus (and in sufficiently large groups, conflict is inevitable).
Really if your worried about becoming attached to a particular technology, you should choose from the beginning to build a heterogeneous environment, and require all your in house development to adhere. In the beginning it might be painful to assure that your software stack runs on two different databases/OSs/ec, but once the abstractions are built up it will likely result in a more stable environment, and ease porting to a third should one of your original choices die.
This then raises issues of compatibility with your customer's environments. The configuration matrix that you'd need to test is tedious (read: costly) in traditional software releases compared to SaaS where you're free to make a lot of decisions independent of your customer and not everything can be automated (anyone that's deployed automated tests against TN3270 terminals with a lukewarm IQ QA department is right to challenge this). Then there's longevity. What happens when your biggest paying customer wants you to stay on IE 8 until 2025 (not an exaggeration)? Want to create yet another customer-specific branch? Eventually you wind up needing a test environment that matches exactly what that customer has and paying contractors to maintain that dead-end tech stack and doing that for every customer. That is quite common and also quite costly but not needing much talent, so the washed up maintenance engineers go here at less than mediocre compensation to cut costs. That's zombie software for you - the soul and spirit of engineers are gone and its corpse is animated by money by a cruel master that cares little for its past life.
They may be used to being frugal, but that is not at all reflected in AWS pricing, which is ridiculously high across the board.
I make a lot of my income cutting peoples infrastructure costs by optimising their setups, and a lot of it involves moving people off AWS (I also move people onto AWS when they have needs that are actually best met there - there are lots of AWS services I love, but they are expensive) to save money. I can generally price my services at a few months worth of their savings.
Competing with AWS on price isn't the hard part. The challenge is the amount of people that either don't care, or think that AWS is cheap without having done realistic comparisons.
But for Oracle, those are exactly the type of customers they have built their entire business around selling to.
1. What's constraining AWS's growth capacity? Isn't it simply a matter of stamping out AZs and DCs?
2. Why would Amazone create a pricing structure which encourages new entrants into the field? Contrast local retail in which defunct firms continue to sit on, and extend, real-estate leases, strictly to prevent other companies from growing into the market they've abandoned. See Dominicks / Anderson grocery stores in the Chicago area, in which seventy-two stores are being leased, at a cost of ~$1m/year, each, to prevent competitors from occupying the space:
http://www.chicagotribune.com/business/ct-vacant-dominicks-s...
(This works in part because rent is only a small part of the operational cost of a grocery store: electric power, labour, maintenance, and of course, groceries, are required if you're actually utilising the space.)
Because the primary entrant threats were not going to be dissuaded by low price competition. Specifically Microsoft and Google. Both are hyper cash and income rich and under no circumstances did they want to cede the cloud computing universe to Amazon. Fundamentally it's the exact same reason AWS stopped trying to compete so intensely on price cuts quite a while back now.
Put another way, if you're going up against Google, Microsoft, IBM, Oracle - speaking hypothetically it's better to own 1/3 of the market and print significant operating income, than to own 1/2 of the market and barely make money. That operating income is responsible for roughly doubling the value of Amazon's share price (the stock took off like a rocket after it became clear AWS was going to be a cash-cow).
But their margins should be large enough, and have been for so many years, that they should have been able to take that into account and adjust expansion accordingly.
I'm more inclined to think that they have simply decided to milk it while they can. I rarely meet people who have any clue what their infrastructure choices actually cost them and what they would pay elsewhere, and I regularly have conversations about how much people believe they'd save by moving to/from provider X where it transpires that said person hasn't even tried costing it out but are certain they'll save money. I also regularly talk to IT departments that have no kind of budget or forecasting in place for their hosting requirements. The state of budgeting for server infrastructure is simply shocking. In that kind of environment, if you price based on actual cost, rather than based on whether or not people believe you're expensive, you're leaving money on the table.
Do they? Isn't it all just rolling the dice on algorithm trivia at this point?
> Amazon is internally use to being frugal, and so pricing wars are not going to hurt them.
eye roll.
> Oracle is use to charging a arm and a leg for their products.
Doesn't mean they don't know how to price a product like this.
> Amazon shareholders are already use to the company not being profitable, where as Oracle shareholders are not
Who says oracle is going to blow all their profits?
But then, it's Sun's technology, not Oracle's...
For example, I'd prefer to run Debian instead of RHEL, but since the stack I have to support uses Oracle and Websphere, my hands are tied.
Here you go: https://gaiustech.wordpress.com/2013/06/26/howto-install-ora...
Evil empire comments aside more cloud infrastructure competition is good for us all.
Oracle has been poaching the core EC2 team from Amazon for years now, in Seattle there are farewell parties every week for another person leaving EC2 to work at Oracle
* Since they seem to be targeting a hybrid approach, how flexible will they be at building and customizing network tunnels to multiple data centers and branch offices?
* Will they allow you to host webservers there, or will you have to figure out how to network to another data center - and will it run Java, or can you get Apache or Docker? IIS with License Mobility?
* What will they do about human error creating routing loops or erroneous BGP broadcasts, when they expand or perform maintenance?
* How will they mitigate both external DDoS and compromised machine attacks from inside?
Running a multi-data center MSP is no easy feat. It will be interesting to see what solutions are developed by Oracle's offering to the above problems.
Yes. I used to work at a major networking company in Seattle, and Oracle has recruited many good people from there, and is paying them nose-ruining salaries. I think their cloud may have many problems, but I doubt networking infrastructure will be one of them.
I'm surprised people still aren't aware of the massive talent transfer from AWS to Oracle.
This is much larger than just compute. A constant stream of principles and SDE3s have been moving for well over a year. Most of the senior engineers on my team have moved with 60% raises. I'm just waiting for their non-competes to expire.
This is like looking at any other marketshare debate. Amazon/Google may win the majority of users, but MS and Oracle are going to get the ones with deep pockets. They don't need me and my piddly weekend project, or most startups. They'll make a mint off a handful of lucrative government contracts, and contracts with the defense contractors that go Oracle because the gov't has pushed it.
http://www.theatlantic.com/technology/archive/2014/07/the-de...
The moral of the story is: AWS is all public cloud, but if you're the CIA and give them $600MM... you can have a private cloud too!
But Google are quick studies, have a vast amount of already-paid-for infrastructure and software, and as much cash as the others.
Amazon and other large players have made fundamental innovations in how they construct custom X86 servers, Virtual servers & custom layer 2/3 networks at large scale. They don't just rack together Dell/HP servers & connect them with Cisco switches/routers, then slap a webui on top of it. That would just be putting lipstick on a pig. It doesn't matter if its a large pig with 64 Cpu cores.
Does hubris lead to sales if you have Oracle-like customers?
There were lasers.
There was dry ice.
Vanessa Mae was playing the electric violin.
A director on stage bellowed we will bring $competitor TO THEIR KNEES!
Everyone was on their feet cheering, I've been to metal gigs that were less intense. Oracle takes sales very, very seriously.
bluster: check hubris: check realism: nope
I would have expected that someone who takes marketing very, very seriously tries to sound realistic, not overoptimistic or full of that which makes plants grow.
Saying "oracle's database rocks" and asking for a stiff price has a certain touch of realism. I can see how a good salesforce can do that with success. My question is along the lines of: Can a good salesforce use bluster as a main tool to sell something shitty, such as oracle's IaaS offering? How does that sales process work?
Well, yes, obviously and consistently. The sales process starts on the golf course/opera/football private box
from elsewhere:
> Bare IaaS still has its place for now, and at that point the major factors are hardware, uptime/reliability, and cost. Lots of companies either can't utilize SaaS/PaaS offerings from most cloud providers (regulatory requirements those providers don't comply with, etc...), or just have legacy products that aren't near EOL yet.
The quote they use doesn't sound like he has "little doubt"
> "In terms of market leadership, I think Oracle will have to produce much faster growth rates to really get ahead of Amazon or even Microsoft in IaaS, and analysts will be watching its spend on data-centers to track this," he said.
(I heavily use Lambda)
They offer quite an extraordinary breadth of managed services, whether it be queuing/messaging/Notifications (Kinesis, SQS, SNS), to databases (RDS, Aurora, Redshift), cluster based computing (EMR), object storage (S3), quite fine grained access control (IAM), monitoring (cloudwatch), infrastructure as code (cloudformation)....
The list goes on, I don't see this Oracle offering much more than just being a bit of a cheaper version of EC2
I'm trying to figure out if we can get our enterprise customers to trust their private cloud tech and then deploy our products within it.
It's a long shot, but I have trouble saying no to sales people before there's money involved.
What will ultimately determine it's success is adoption and not the technology potential itself. Let's see what happens it'll be interesting to observe the impact of this.
Otherwise they're competing on niche or price, and that's not going to stop the gorilla.
PS: It just passed through my mind: some corp. should be able to compete with Google (mainly on search engine and ads), before they become "too powerful".
Basically, this is a new product from a new team comprised of a bunch of ex-Amazon engineers in Seattle, among others.
"..Oracle has been using very aggressive tactics to sell its current cloud platform. The company's sales team has resorted to the "nuclear option" of threatening a costly and expensive audit of other Oracle software products, then offering to skip the audit if the customer agrees to add cloud services."
This will work well for them.
http://www.businessinsider.com/oracle-hires-nebula-employees...
The naming was always confusing because both companies were based within a mile of each other, never mind the product overlap.