Even though we are almost only two weeks off Oracle’s OpenWorld conference in San Francisco - Oracle is pushing the gas pedal. Yesterday Oracle announced its Sparc M8 chip / architecture – today it was Chairman and CTO Larry Ellison’s turn: New pricing.
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The press release can be found here. So, let’s dissect in usual fashion:
MyPOV – Good to see Oracle expanding its BYOL program. That lowers the hurdle for customers to move to the Oracle cloud – and helps against the competition. That is – in Oracle’s eyes most prominently AWS – so they are mentioned here… Oracle has gone at length that its IaaS Gen2 is cost effective – now it is getting aggressive on the pricing side. Always good to see vendors living up to their announcements.
MyPOV – The real simplification comes here. And while pre-pay programs exist for IaaS since a while, they are usually tied to dedicated products and services. Having the portability across products and services is important for customers, especially in early phases of their cloud journey. Over time their footprint solidifies – but given where most Oracle customers are now, this move is a significant reduction in complexity. The option to use the credits for Oracle Cloud at Customers is a differentiation to pure public cloud based IaaS vendors. It caters well to customers who are still cloud concerned, who are in geographies where Oracle’s IaaS Gen 2 may not be yet, or where data residency requires in country operation of IT.
For more on the event - check out the Storify embedded below.
Future of Work / HCM / SaaS research:
Also worth a look for the full picture
And if you want to read more of my findings on Oracle technology - I suggest:
The press release can be found here. So, let’s dissect in usual fashion:
At a live event today, Oracle Executive Chairman of the Board and CTO Larry Ellison announced new programs that lower costs by delivering increased automation and flexibility, and enable customers to get more value from their existing Oracle software investments. The new Oracle Cloud programs include Bring Your Own License to PaaS and Universal Credits.MyPOV – Nice summary. Pricing simplification has been on Ellison’s mind since a long time. In his view easier pricing accelerates sales processes, something he really wants. This move reminded me of Ellison pushing through a single global price list, published on its website, connected with the Oracle Store in the dot com era. It was revolutionary then – today it was visionary.
“We are completely transforming the way all companies buy and use cloud by providing flexibility and choice,” said Ellison. “Today, we combined the lowest prices with the highest performance and more automation to deliver a lower total cost of ownership for our customers.”MyPOV – Rationale is key to Oracle and Ellison – and his presentation was more about how automation of the Oracle database processes allows Oracle to lower prices and compete with the competition. He even said at one point that Oracle would make cost a SLA item…
While organizations are eager to move to the cloud, many have not due to obstacles that have forced them to choose between flexibility and lower costs. They have been challenged by the complexity of the cloud and the inability to rebalance spend across different services. Organizations have also been constrained by limited visibility and control over cloud spend. Until now, they have been unable to fully leverage their on-premises software investments in the cloud, having been limited to IaaS services or sacrificing key database features at the PaaS layer. Oracle’s new cloud programs address customers’ cloud adoption challenges by improving and simplifying the way they purchase and consume cloud services.MyPOV – Always good to see simplification. In a more complex and accelerated environment enterprises need all the simplification they need. And while pricing complexity is one problem, product fit and evaluation is even bigger. But Oracle is right – once enterprises have established the services they want - / need – budget risk is one of the main pre-occupations of CxOs. Though the ‘horror’ stories of early cloud days of enterprises burning through a month’s budget in few days because someone didn’t turn something off – are over – it remains a concern till today. But price is only half the equation – product / service selection remains a challenge.
Bring Your Own License to Oracle Database PaaS: Delivering Increased Value Through License Mobility
Currently, customers can bring their on-premises licenses to Oracle IaaS. Today, Oracle is expanding the offering by enabling customers to reuse their existing software licenses for Oracle PaaS, including Oracle Database, Oracle Middleware, Oracle Analytics, and others. Customers with existing on-premises licenses can leverage that investment to use Oracle Database Cloud at a fraction of the old PaaS price. Running Oracle Database on Oracle IaaS is faster and offers more features than Amazon, delivering the industry’s lowest total cost of ownership. Additionally, customers can further reduce management and operational costs required for on-premises maintenance by taking advantage of this PaaS automation.
MyPOV – Good to see Oracle expanding its BYOL program. That lowers the hurdle for customers to move to the Oracle cloud – and helps against the competition. That is – in Oracle’s eyes most prominently AWS – so they are mentioned here… Oracle has gone at length that its IaaS Gen2 is cost effective – now it is getting aggressive on the pricing side. Always good to see vendors living up to their announcements.
Universal Credits: Flexible Buying and Consumption Choices for Oracle’s PaaS and IaaS Services
Oracle is introducing Universal Credits, the industry’s most flexible buying and consumption model for cloud services. With Universal Credits, customers have one simple contract that provides unlimited access to all current and future Oracle PaaS and IaaS services, spanning Oracle Cloud and Oracle Cloud at Customer. Customers gain on-demand access to all services plus the benefit of the lower cost of pre-paid services. Additionally, they have the flexibility to upgrade, expand or move services across datacenters based on their requirements. With Universal Credits, customers gain the ability to switch the PaaS or IaaS services they are using without having to notify Oracle. Customers also benefit from using new services with their existing set of cloud credits when made available.
MyPOV – The real simplification comes here. And while pre-pay programs exist for IaaS since a while, they are usually tied to dedicated products and services. Having the portability across products and services is important for customers, especially in early phases of their cloud journey. Over time their footprint solidifies – but given where most Oracle customers are now, this move is a significant reduction in complexity. The option to use the credits for Oracle Cloud at Customers is a differentiation to pure public cloud based IaaS vendors. It caters well to customers who are still cloud concerned, who are in geographies where Oracle’s IaaS Gen 2 may not be yet, or where data residency requires in country operation of IT.
Behind the scenes it means – Oracle must have a lot of capacity. The dedicated service / product pre pay helps IaaS vendors to plan capacity and build out of their IaaS capacity. When customers can switch with little notice, an IaaS vendor must be confident to have enough capacity. Theoretically too much demand can create wait lists – but that would be bad for business… but an area to watch going forward.
Looking behind the scenes – we can assume a few things: Oracle is confident IaaS Gen 2 works. It just has poured another 2B in CAPEX in Q1 2018. First time Oracle has spent 2B+ CAPEX quarters in recent years (or at all – I did not go back). All these investments need load to get justified. If pricing held customers up – it has been simplified. And the move gives the Oracle sales force the instant chance to have a cloud conversation with customers – given the BYOL option – and the public cloud and cloud at customer options. The executives in 500 Oracle Parkway are making it was easy as possible to sales force and customers to move to cloud and generate cloud revenues. That Oracle is under pressure to show cloud growth (like all major enterprise vendors) is no surprise, and the last earnings call has not lowered pressure, despite good results.
For the industry, its key to watch how well Oracle can move customers to cloud (or cloud at customer). For Oracle competitors, massive potential could disappear. As Constellation estimates that 30-40% of on premise systems are either Oracle systems, or systems so closely connected to an Oracle system – this is a key development to watch – to determine the overall move of the on-premise load to public cloud (the other one is the VMware / AWS partnership). If Oracle succeeds with this – we may see a fast move of almost all enterprise load to the cloud. The reasons are – when a year of server refresh goes missing, most of on premises IT becomes – very expensive. So expensive that the board s and CEOs are asking how fast the rest can move… Stay tuned. It’s going to be a crucial fall.
Overall MyPOV
Always good to see simplification. Customers who are uncertain on which products and services they can consume can now start budgeting for instance for trials and proof of concept. BYOL is powerful for customers ready to move to cloud. So overall a good move by Oracle.Looking behind the scenes – we can assume a few things: Oracle is confident IaaS Gen 2 works. It just has poured another 2B in CAPEX in Q1 2018. First time Oracle has spent 2B+ CAPEX quarters in recent years (or at all – I did not go back). All these investments need load to get justified. If pricing held customers up – it has been simplified. And the move gives the Oracle sales force the instant chance to have a cloud conversation with customers – given the BYOL option – and the public cloud and cloud at customer options. The executives in 500 Oracle Parkway are making it was easy as possible to sales force and customers to move to cloud and generate cloud revenues. That Oracle is under pressure to show cloud growth (like all major enterprise vendors) is no surprise, and the last earnings call has not lowered pressure, despite good results.
For the industry, its key to watch how well Oracle can move customers to cloud (or cloud at customer). For Oracle competitors, massive potential could disappear. As Constellation estimates that 30-40% of on premise systems are either Oracle systems, or systems so closely connected to an Oracle system – this is a key development to watch – to determine the overall move of the on-premise load to public cloud (the other one is the VMware / AWS partnership). If Oracle succeeds with this – we may see a fast move of almost all enterprise load to the cloud. The reasons are – when a year of server refresh goes missing, most of on premises IT becomes – very expensive. So expensive that the board s and CEOs are asking how fast the rest can move… Stay tuned. It’s going to be a crucial fall.
For more on the event - check out the Storify embedded below.
Recent blog posts on Oracle:
- Summer 2017 News Analysis - Oracle invests in IaaS (or at least CAPEX) - read here
- News Analysis - Oracle empties the barrel - Revolver style (6) Cloud News Analyses - read here
- Musings - Does Oracle and Accenture make sense - or never ever! - read here
- Progress Report - Oracle HCM Analyst Summit 2017 - Oracle HCM stronger and stronger - read here
- Event Report - Oracle OpenWorld - the HCM perspective - Almost no news, but wait... - read here.
- First Take - Early Oracle OpenWorld 2016 Keynotes - read here
- Event Preview - Oracle OpenWorld 2016 - What to expect, what to watch for ... will IaaS start Clicking? - read here
- Market Move - Oracle acquires NetSuite - Oddly consolidation means more options for customers - read here
- News Analysis - Oracle Unveils Suite of Breakthrough Services.. or short: Oracle Cloud Machine - read here
- Progress Report - Oracle Cloud - More ready than ever, now needs adoption - read here
- Event Report - Oracle Openworld 2015 - Top 3 Takeaways, Top 3 Positives & Concerns - read here
- News Analysis - Quick Take on all 22 press releases of Oracle OpenWorld Day #1 - #3 - read here
- First Take - Oracle OpenWorld - Day 1 Keynote - Top 3 Takeaways - read here
- Event Preview - Oracle Openworld - watch here
Future of Work / HCM / SaaS research:
- Event Report - Oracle HCM World - Innovation around the Core - read here
- Event Report - Oracle HCM World - Full Steam ahead, a Learning surprise and potential growth challenges - read here
- First Take - Oracle HCM World Day #1 Keynote - off to a good start - read here
- Progress Report - Oracle HCM gathers momentum - now it needs to build on that - read here
- Oracle pushes modern HR - there is more than technology - read here. (Takeaways from the recent HCMWorld conference).
- Why Applications Unlimited is good a good strategy for Oracle customers and Oracle - read here.
Also worth a look for the full picture
- Event Report - Oracle PaaS Event - 6 PaaS Services become available, many more announced - read here
- Progress Report - Oracle Cloud makes progress - but key work remains in the cellar - read here
- News Analysis - Oracle discovers the power of the two socket server - or: A pivot that wasn't one - TCO still rules - read here
- Market Move - Oracle buys Datalogix - moves more into DaaS - read here
- Event Report - Oracle Openworld - Oracle's vision and remaining work become clear - they are both big - read here
- Constellation Research Video Takeaways of Oracle Openworld 2014 - watch here
- Is it all coming together for Oracle in 2014? Read here.
- From the fences - Oracle AR Meeting takeaways - read here (this was the last analyst meeting in spring 2013)
- Takeaways from Oracle CloudWorld LA - read here (this was one of the first cloud world events overall, in January 2013)
And if you want to read more of my findings on Oracle technology - I suggest:
- Progress Report - Good cloud progress at Oracle and a two step program - read here.
- Oracle integrates products to create its Foundation for Cloud Applications - read here.
- Java grows up to the enterprise - read here.
- 1st take - Oracle in memory option for its database - very organic - read here.
- Oracle 12c makes the database elastic - read here.
- How the cloud can make the unlikeliest bedfellows - read here.
- Act I - Oracle and Microsoft partner for the cloud - read here.
- Act II - The cloud changes everything - Oracle and Salesforce.com - read here.
- Act III - The cloud changes everything - Oracle and Netsuite with a touch of Deloitte - read here.