SAN FRANCISCO—Oracle Executive Chairman and CTO Larry Ellison was asked at a recent meeting with financial analysts if the company should “step on the gas” and invest more in things like building new cloud data centers, given the huge business opportunity in the next five years.
During the past year, Oracle added 12 new cloud data center regions, and its goal is to have 36 such regions by the end of next year. Each region refers to one or more availability domains in a geographic area, with each domain containing an independent data center, based on second-generation Oracle Cloud Infrastructure, linked together with low-latency, high-bandwidth interconnects.
Larry Ellison, Oracle’s chairman and CTO, told financial analysts that data center build-out, infrastructure investments, and select partnerships are key to Oracle's growth strategy.
Oracle“We’re growing as fast as we can, other than building data centers that are empty,” Ellison said at the company’s September 19 meeting with financial analysts in San Francisco at the end of Oracle OpenWorld. “…We’re building all the [data center] regions out, and as those regions grow, based on demand, we can get hardware there in very short order.”
For example, the company recently soft-launched a data center in Mumbai, India, and when demand started outpacing forecasts—even before the official opening—Oracle shipped more hardware to expand it. Because Oracle manufactures its own hardware, Ellison said, it doesn’t need to stockpile servers in a data center far ahead of when they’ll be used by cloud customers.
“We have a very different model than anybody else,” Ellison said, contrasting Oracle’s direct hardware inventory model with the way that most automobiles get sold. “We don’t believe in shipping SUVs to dealers. We believe in the Tesla model—someone orders an SUV, build an SUV.”
Here are a few other key observations from that meeting about Oracle’s cloud infrastructure strategy and how its unique approach fuels the company’s business:
• Oracle is the only company that offers a full suite of enterprise cloud applications and cloud infrastructure, Ellison said, from financial, HR, and sales apps to compute resources and advanced database technology. “We think the fact that we're in the infrastructure business gives us a huge advantage in the enterprise applications business,” he said.
Big companies that buy cloud applications often want to build capabilities around those apps, creating what are called extensions. Oracle provides a complete development platform to build those extensions, plus the infrastructure (including Oracle Autonomous Database, Oracle Autonomous Linux, high-availability compute capacity, and storage) to run the extensions.
Oracle
• Oracle believes that, with its Gen 2 Cloud Infrastructure, it now offers a better version of what first mover Amazon Web Services provides in terms of pure cloud infrastructure. “So we expect to have a highly differentiated business from AWS, because we develop a lot of software,” Ellison said.
What makes Oracle Gen 2 Cloud Infrastructure truly second generation, he said, is its application of machine learning to create autonomous systems. When asked when Amazon’s database capabilities could catch up to Oracle’s, Ellison pointed to Oracle Autonomous Database, which automatically configures, tunes, patches, and upgrades itself without system downtime. “When does Amazon catch up to that?” he said. “Certainly not in the next decade.”
• Oracle Cloud Infrastructure is optimized for both open source and Oracle Database workloads. “We think we have to deliver open source technology in an easier-to-consume, more performant, more reliable, more economic way than our cloud competitors,” Ellison said.
He noted that Oracle is the steward of MySQL, the open source relational database, but it’s not stopping there. Customers can run other databases, including Microsoft SQL Server and MongoDB, on its Oracle Cloud Infrastructure, and Oracle supports the most popular development languages, from Java (for which it’s also the steward) to Ruby. It aims to provide a better experience than any cloud in running open source workloads. “We have to do that, or we're missing a huge opportunity,” Ellison said, “… because people are going to be using a lot of these technologies around our applications, around the Oracle Database, around all these other things.”
• Oracle will build the equivalent of a cloud data center for the sole use of some of its biggest customers. Some companies want to keep their data within their physical control, in a building that only they use, Ellison noted. In such cases, Oracle would build a data center—a cloud region—that’s architecturally identical to one of its existing Gen 2 cloud regions, and configure and manage it for them, just like it would for any public cloud service.
“If they want to stay ‘on prem’ or in their data center, they can stay in their data center. We’ll build a complete region for them,” he said. “…That’s another avenue of growth.”
• New partnerships with Microsoft and VMware are critical to letting companies move workloads to the cloud. “We have to be a full platform,” Ellison said. “Someone has to be able to run their business—all of it—run their IT—all of it—on our cloud.”
If a company can get cloud resources to run Oracle and Microsoft workloads, plus tools that let them lift and shift VMware workloads without changes or re-testing, that would represent a huge amount of its business computing environment. Oracle also supports open source, cloud-native applications companies are building themselves. And finally, it offers Oracle Autonomous Linux, which can run Red Hat Enterprise Linux applications with no changes.
The goal is to run Oracle workloads better than anyone else, Ellison said, and to offer a full enterprise IT platform—“connect up with Microsoft, connect up with VMware, have a compatible replacement for Red Hat, run all the open source stuff—and we’re pretty much there.”
