The News: Oracle today announced Oracle Dedicated Region Cloud@Customer, the industry’s first fully-managed cloud region that brings all of Oracle’s second-generation cloud services, including Autonomous Database and Oracle SaaS applications, to customer datacenters, starting at only $500K a month. Read the full announcement here.
Analyst Take: Today Oracle Cloud made a significant announcement with the rollout of its Dedicated Region Cloud@Customer. This was one announcement that essentially built off of another announcement of adding Autonomous Database capabilities to its Exadata Cloud@Customer Offering.
I want to use this research note to discuss briefly both announcements and provide some perspective on how this impacts Oracle and the overall cloud landscape.
A Path to Cloud On Premises as Exadata Cloud@Customer adds Autonomous Database
Over the past three years, Oracle has offered its Exadata Cloud@Customer offering, but with today’s announcement, the company is able to expand to add the capabilities of its latest database platform. The company is touting that the Oracle Autonomous Database on Exadata Cloud@Customer offers the simplest and fastest transition to cloud, with migrations being done in about a week–an impressive timeline for what is usually considered a significant overhaul that can often take months. This expedited transformation is enabled because of the “Autonomous Capabilities” that allows for existing applications in a datacenter to connect and run without requiring any application changes —with the important caveat for many companies in challenging regulatory, compliance and/or data sovereignty environments where during such a transition the data can never leave the customer’s datacenter.
Beyond the simplicity that the company has focused on since the Exadata Cloud@Customer inception, the tying to its Autonomous Database capabilities appears to also mean lower costs. We have heard CEO Larry Ellison tout the possibility to modernize and cut costs by up to half–A significant number that should garner the attention of CIOs and CFOs respectively.
Oracle’s Dedicated Region Cloud@Customers Adds The Rest of the Cloud Stack
But as I mentioned, the addition of Autonomous Database capabilities to the Exadata Cloud@Customer was only part of what Oracle focused on today. For many companies looking for a more complete cloud experience, but not necessarily a migration out of an on-premises datacenter, Oracle has appeared to address the fully managed, on-prem space with the announcement of its Dedicated region Cloud@Customer offering. The idea here is to support growing enterprise adoption of public clouds looking for the benefit of the pay-as-you-go economics, scale, and agility of cloud computing, but without sacrificing or compromising the continued needs for on-prem, which isn’t going anywhere anytime soon. Oracle’s new offering claims to offer its entire cloud services stack, autonomous database and SaaS applications, fully managed, on-prem. This new offering appears to be very complete for the larger enterprise looking for a public/private cloud partnership with no compromises.
Upon review of the announcement, it appears these regions will act like full Oracle Cloud Zones and will receive real time access to services the same way Oracle’s public cloud customers would gain access. Some of the benefits that I see include much of what has driven interest in hybrid architectures including keeping customer data isolated to provide robust security, the ability for current Oracle customers to run their SaaS products such as ERP, CX or HCM locally in a certified environment and of course the consumption based economics, which has been a consistent focal point of cloud adoption.
Overall Impressions of the Oracle Dedicated Region Cloud@Customer Announcement
Since the onset of the company’s second generation cloud offering, Oracle has become more competitive, but has still faced significant headwinds to winning broader IaaS market share from its largest cloud competitors. However, over the past few months, we have watched as Oracle has seen a few significant customer wins including Covid-19’s and the work from home boom’s most prolific player, Zoom.
The new Dedicated Region Cloud@Customer announcement is going to be important for Oracle. It will enable the company to meet the customer where they are with their migrations to hybrid. We have seen more data egress and repatriotizing workloads to meet modernized architectures toward hybrid and multi-cloud and what a lot of customers, especially in compliance riddled industries are seeking is cloud experience, but not necessarily being in the cloud.
At $6 Million a year as an entry point, this won’t be an offering for every company, but for large enterprises, which is an area where Oracle has significant market penetration, this will be an offer that many of its customers will take interest in. Over the next 4 quarters, it will be important to take stock on the wins for Dedicated Region Cloud@Customer. Oracle is showing its ambitions in Cloud, but will continue to face mounting pressure from established cloud leaders including AWS and Azure. Having said that, I believe the new offering and its ability to run not only its entire second generation cloud services, but also its autonomous linux as well as its SaaS solution on-prem will certainly open some doors for customers that Oracle couldn’t make headway with in the past–perhaps most immediately those customers that already work closely with Oracle.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.
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Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
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