Insights From Oracle OpenWorld and the Private Cloud Controversy

Oct 10, 2012

Oracle OpenWorld kicked off in its usual exciting fashion with Larry Ellison’s keynote address that focused on announcing new, generational-leaps in technology such as the new Exadata version 3, which boasts the following specs:

  • Same price as Exadata 2
  • 20x more write performance
  • 33%more data throughput
  • 4 TB DRAM, 22 TB PCI Flash

In short, this powerhouse product can run an enterprise’s entire database in memory, providing unprecedented performance for those looking at database consolidation and/or big data.

Oracle also announced version 12c of its database engine, the ‘C is for Cloud,’ which among many other features adds native multi-tenancy to the product.

Though the most controversial announcement made by Larry was that Oracle is now in the IaaS Cloud business.  By reasoning that Oracle already has the best PaaS Cloud for developing database applications on the world’s number one database, and they have a robust SaaS offering which boasts the most complete suite of applications, Larry stated that IaaS is a logical next step.

Larry further clarified that Oracle now offers both public and private IaaS Cloud solutions, which are the ExaSuite of products and its core public cloud offering that boasts high performance, secure, reliable infrastructure with OS, VM, compute and storage services.

This public cloud offering serves as an extension to the Oracle cloud that resides behind firewalls, where Oracle owns and manages the infrastructure, as well as the virtualized and storage services.

Many of the industry pundits quickly denounced the new private cloud offering. Some even proclaimed that Larry did not understand the cloud, or that he did not fully “get” cloud computing.

Many industry trade magazine articles and literally thousands of tweets also disparaged the strategy, Oracle and Larry Ellison himself.  Forbes Magazine even went so far as to name it the “Dumbest Idea of 2013″.

I beg to differ and actually agree with Larry.  Of course, the private cloud is not truly the cloud.  I even argue this point in my book: “Get Your Head in the Cloud: Unraveling the Mystery for Public Sector.”  But let’s face it … public cloud use is growing at a rapid pace, especially for SaaS.  For example, the Departments of Transportation, Interior and others are moving their email to the cloud.  And, every government agency is now in the process of building their own private cloud solutions.

Will public cloud use continue to grow? Absolutely.  Will many of the private IaaS clouds that are being built today morph themselves over time to a private-public hybrid model?  You bet.

However, for the time being, the private cloud is alive and well in the federal sector.  In addition, most hardware vendors have, or are developing, similar pay-per-use hardware models to meet customers’ demand for it.

I believe that Larry gets the cloud.  Clearly, he wants to maximize his short-term sales, while waiting for customers to realize the value of public cloud models from one vendor — Oracle.

I would not bet against this strategy.

As always, thank you for reading and I welcome all thoughts and feedback

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