The week that reshaped the Cloud: The analysts' verdict

26th Jun 2013

It's been the week in which the Cloud competitive landscape has shifted - possibly forever. 

Oracle has chummed up with Microsoft and with with the former enemies now pledging co-operation and unison. 

Lots of questions remain, but what's been the analyst reaction so far?

Techmarketview's Angela Eager is intrigued by Oracle's decision to certify its databases on Microsoft's Azure platform. "These two are not a natural pairing, competing as they do in the database and middleware markets as well as on the Cloud platform front," she notes.

"But after two poor quarters and a late start with its own Cloud platform, Oracle needs to build its Cloud presence and revenue. With this agreement Oracle is hoping to take advantage of the reach of Azure and tap into the Windows OS and SQL Server customer bases. 

"With SAP customers potentially replacing Oracle databases with SAP Hana, Oracle needs an alternative revenue opportunity. It is also an additional Cloud -based route to market for Oracle, who has a similar agreement for Amazon Web Services.

Eager is equally taken aback by a nine year technology tie-up between and Oracle. "It is a radical shift for both suppliers and will have repercussions throughout the market," she predicts. "The bottom line is that Cloud s need to interoperate and suppliers need to make that happen in order to move adoption to the next level.  
"There is also a lot of defensive positioning going on here. If the application and software providers don’t deliver Cloud integration, the SI’s will. Software providers risk being outmanoeuvred in their own space."
But she adds: "One of the other big questions is whether these two vendors and their big-ego’d CEO’s can maintain the nine-year relationship they have signed up for."
Constellation Research's Holger Mueller reckons it's all about pragmatism.  "Oracle gets a design and marquee win - the largest SaaS vendor in the market," he states. "And a potential reseller or joint sales engagement partnership at SAP customers, where is very successful at selling into. At the same time Oracle is the database of choice in all large Cloud s, but one (Google). 
" can put away some key technology decisions, they are taken for the next 9 years and likely longer. And it gets an Cloud ERP option to counter enterprise scale arguments in competitive engagements with SAP. Personally I would expect the account manager to have the roadmap for the joint CRM and Oracle Fusion App in every slide deck when competing with SAP. "
Forrester's James Staten is more interested in how Oracle's stance has changed." While we can all argue about Oracle's statements made in last week's quarterly earnings call about being the biggest Cloud company or having $1B in Cloud revenue, it is clearly no longer up for debate as to whether Oracle is embracing the move to Cloud ," he argues.
"The company is clearly making key moves to Cloud -enable its portfolio. Combine today's moves with its SaaS acquisitions, investments in Cloud companies and its own platform as a service, and the picture clearly emerges of a company moving aggressively into Cloud .  I guess CEO Ellison no longer feels Cloud is yesterday's business as usual."
He adds that the Microsoft alliance is a pragmatic strategy. "Certainly Oracle would prefer that customers build and deploy their own Fusion applications on the Oracle Public Cloud , but the company is wisely acknowledging the market momentum behind AWS and Windows Azure and ensuring Oracle presence where its customers are going," he notes.
"These moves are also necessary to combat the widespread use of open source alternatives to Oracle's middleware and database products on these new deployment platforms." 
Meanwhile Constellation Research's Ray Wang has been pondering whether Oracle's Cloud strategy is genius or revisionist history.
He observes: "Over the past decade, Oracle has emerged as the laggard in the Cloud market.  VC’s had advised their startups not to build on Oracle to avoid the cost overhead and legacy database technology. Yet Larry Ellison remains the rare master of Sun Tzu’s Art of War strategies. 
"In this latest effort, he shows his determination to serve as the arms dealer for Cloud infrastructure.  Announcements on partnerships with Amazon,  Dell, now Microsoft and with and NetSuite show his determination to remain relevant in the Cloud , though very late to the party."

He adds: "For the overall Cloud market this forms a positive development as amongst the dedicated Cloud stack vendors – AWS, Google, Microsoft and Oracle – this forms a level of reuse and commonality that previously has not been thought to be possible. Java applications now run on all of the four aforementioned Cloud stacks."

And as for Oracle's new found fondness to partner with its rivals, Wang concludes: "The Cloud sure makes strange bedfellows, and is the real driver and winner."


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