Comment by toyg | Hacker News Reader

Comment by toyg | Hacker News Reader

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> why Oracle is trying to take on Amazon, despite being years late to the party. I believe it's a defensive move

Ellison is all about the money. When "the cloud" started, he quietly bankrolled a bunch of companies spearheading the space, so he didn't have to risk his cash-cow. Once the space was proven, he's steered the whole company - and he didn't do it yesterday, he's done it about 6 years ago. You're seeing results today because Oracle is large, it takes a while to release stuff that has almost been rewritten from scratch to fit the new paradigm, and it takes even more to sell it to Oracle's very conservative userbase.

If it succeeds, the subscription model will make Oracle even more money than before. However, they are effectively rewriting from scratch a large number of their products; this is why they are very limited. It will take another 5 years before they can reach feature-parity with on-premise solutions, assuming on-prem doesn't get anything new in the meantime. Performance is also pretty dismal for some cloud products at the moment.

Oracle selling higher-end products as a service makes total sense, and I agree, the subscription model has potential to make them a good deal of money. What I'm getting at, however, is why are they so aggressively taking on Amazon in the IaaS space? That's the part which doesn't make sense on the surface--they show up late and then attempt to compete on price. Since when has Oracle competed on price?

The conclusion I come to is that Amazon must be eating away at their customer base. Once a customer starts to move some of their IT into AWS, and it goes well, that puts Oracle on the defensive--not a spot they like to be in.

I doubt Oracle really wants to be in the IaaS business just for the sake of IaaS. They want to focus on higher-margin services. The IaaS part must be a defensive move to keep customers away from AWS and within the Oracle ecosystem.

There's another thing that is specific to IaaS: auditability. Part and parcel of Oracle's business model is sending goons to count your servers running this or that appserver, and invariably telling you are not paying enough in licenses. A serious cloud-based architecture that can scale up and down at will (which is what you would deploy on AWS) is fundamentally non-auditable, because it can be scaled down to minimal levels when auditors land. But if you're running on Oracle's servers...

Not sure about auditability. If anything, IaaS is more auditable since everything is traceable.

Additionally, AWS will provide partner ISVs with detailed reports on how customers used their products over a given billing period.

That being said, this transparency might be an issue for Oracle as it limits their usual predatory sales/auditing practices.

They are not taking on AWS but they are talking about taking on AWS and to show that they are serious they invest some money.

Since they are now a "serious" cloud player with whom one has already ties they get invited to tenders that threaten the status quo.

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