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Oracle Corp. was a latecomer in the race to cloud dominance, with Amazon Web Services Inc., Microsoft and Alphabet Inc. owning the spotlight. But the database giant is strengthening its cloud position, most recently launching a string of updates to its Autonomous Data Warehouse offering.
It appears Oracle has made a breakthrough with the investment community, since last month Barron’s declared Oracle a cloud giant, and the company’s stock shot up 18% over nine trading days.
What’s more, the company’s third-quarter 2021 earnings demonstrated consumption revenue for Oracle’s Cloud Infrastructure and Autonomous Database Warehouse had grown at 139% and 64%, respectively. And although the on-premises legacy side of the business is a headwind to overall growth figures, products such as Oracle’s Fusion ERP, Human Capital Management and NetSuite are showing 20%-plus growth. The company also revealed plans to raise its capital expenditure sequentially by a hefty 50% in the coming quarter.
As the newest release of the Autonomous Database Warehouse hits the headlines, Dave Vellante, host of theCUBE, SiliconANGLE Media’s livestreaming studio, and David Floyer, chief technology officer at SiliconANGLE’s sister market research firm Wikibon, dug into Oracle’s cloud strategy and compared the company’s prospects against other prominent cloud database vendors.
“The industry’s first and only self-driving cloud data warehouse” is how Andrew Mendelsohn, executive vice president of Oracle database server technologies, described the new release of Oracle’s ADW.
“The whole strategy is unique in its breadth,” Floyer said, pointing to the broadness of the platform’s ways to view data and self-provision, as well as its overall functionality as the source of its power.
Vellante’s takeaways of ADW are “faster, simpler loads, simplified transforms, autonomous machine learning models, which can facilitate citizen data science, and then faster time to insights.” And Floyer also sees a dramatic improvement in the user interface as the key change. This, along with the introduction of Python with spatial databases, are of strategic importance because it shows Oracle is focusing on end-user capabilities.
“It is really important that you reach out to the developer as they are, and what tools they want to use,” Floyer stated. “Don’t try to exclude other people; be a platform and an ecosystem for the end users.”
The autonomy of the ADW is possible thanks to Oracle’s bid to own the entire database stack, according to Floyer. The company has the hardware base, with the Exadata database machine, all the way up to the data warehouse itself, with online transaction processing and inference databases, and even through the application stack with Oracle Fusion Applications.
“Oracle is trying to democratize the use of data warehouses,” Floyer said. “It is pushing out to the lines of business, and it’s simplifying things. Business lines can manage their own data and not rely on an IT person from headquarters to help them.”
There’s one area where Oracle’s dominance is unquestioned: mission-critical operational databases.
“Your crown jewels, the most expensive and the most valuable applications … the ones that have got to take a beating … those types of applications are where Oracle really shines,” Floyer said.
It’s also an area where AWS is weak because of the constraints of running large, mission-critical systems on its services, he added. AWS recommends that customers change how they write applications, move to Aurora and use microservices to link everything together, according to Floyer. But that approach makes the customer responsible for testing and maintenance, and overhead can grow exponentially.
“AWS, in my opinion, needs to have a move towards a tier-one database of its own, and it’s not in that position at the moment,” Floyer said, and that gives Oracle the advantage.
Contrasting AWS’ “right tool for the right job” approach with Oracle’s “Swiss Army knife” convergence of all functions into a single database, Vellante sees AWS’ approach as a viable one. It’s a great option for programmers “looking for a cheap database that will do the job for a particular project,” Floyer agreed. But as companies scale up their data resources, expenses and time increase, affecting administration costs.
“The challenge as you have more and more data and as you’re building up your data warehouse in your data lakes is that you do not want to have to move data from one place to another place,” he said. “Oracle’s approach means that all data movement happens internally. It’s Oracle that’s doing that work for you, and as you grow, that becomes very, very important [in terms of] cost-saving,” Floyer said.
Snowflake Inc. is taking a radically different take on data warehousing. “It’s not just trying to compete with data lakes, it’s not trying to take Oracle head on,” Vellante said. “It’s trying to create this data cloud notion to facilitate data sharing, put data in the hands of business owners and providing better access to data product builders.”
But, disruptive as it is, Snowflake is still building out its features and has chosen not to try and tackle mature database functions such as complex joins and sophisticated workload management, according to Floyer.
Vellante defends the startup, whose founders came from an Oracle background. “They know how hard it is to do things like facilitate complex joins and do complex workload management,” he said. “So they said, ‘Let’s just simplify. We’ll put it in the cloud, and it will spin up separate virtual data warehouses when needed… and we’ll take advantage of the cloud’s infinite resources,’” he said, describing Snowflake’s approach as a “different philosophy.”
“Put it up and make it available to whoever needs it and make it so simple that it can be shared across the country and across the world,” Floyer said. “I think it’s a very powerful vision indeed.”
However, no matter how innovative Snowflake’s data cloud is, the bottom line is that the company needs to mature before it can truly challenge Oracle’s stronghold.
Oracle’s cloud strategy is different and fundamentally tied to its software franchise, and its vertically integrated hardware and software stack. While not the only contender, the company has a dominant position in mission-critical workloads, it owns a public cloud and its large customer base somewhat insulates it from the disruption that cloud has brought to many on-premises enterprise technology players.
“There are platforms with a certain critical application or key parts of the infrastructure, which I think can differentiate themselves from the Azures or the AWS,’” he said. “And Oracle owns one of those.”
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