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September 19, 2016updated 21 Sep 2016 2:46pm

Ellison ignites an Oracle vs AWS cloud war

New data centres said to offer twice as many cores as Amazon.

By James Nunns

Oracle’s never been shy in believing that it could directly take on and beat Amazon Web Services, and now it is looking to undercut its competitor on price with a second-generation infrastructure offering.

Larry Ellison, executive chairman and CTO of Oracle, kicked off the company’s annual conference OpenWorld in San Francisco with the release of more than 20 products for the Oracle Cloud Platform and application services, as well as Oracle Database 12c Release 2.

Ellison made sure to let the audience know that the new releases were aimed at positioning Oracle as the leader in the cloud market. The CTO said: “Amazon’s lead is over. Amazon is going to have serious competition going forward. And we’re very proud of our second generation of Infrastructure as a Service.

“We’re going to be focusing on it and aggressively featuring it not only during Oracle OpenWorld but for the remainder of this fiscal year and next fiscal year and the year after that.”

Ellison played up the number of SaaS applications the company has as well as highlighting a number of other areas where he feels the company has the edge.

Oracle recently reported in its Q1 2017 financial results that its cloud efforts had brought in $969m in revenue, while SaaS and PaaS grew at 77% on the quarter and made up $798m.

By comparison, AWS, which is considered the market leader by numerous analyst firms, reported net sales of $2.9bn in Q2, and operating income at $718m.

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AWS is believed to hold a 31% market share, three times the size of its nearest competitor Microsoft, according to Synergy Research.

What is clear from Oracle is that it is doubling down on trying to become the go-to cloud company. Ellison said that Big Red would start delivering its software in the cloud first before it then goes to on-premise.

It also isn’t just on the application side where Oracle thinks it has got the edge over AWS. On the data centre front Ellison said: “Our new second-generation datacenters offer twice as many cores as Amazon, twice as much memory as Amazon, four times as much storage as Amazon, and more than 10 times the I/O capacity of Amazon. But you have to be willing to pay less.  If you’re not willing to pay less, you can’t place the order.”

In November 2015 Amazon CTO Werner Vogels revealed that the company would be building and opening new regions in 2016 and 2017.

On paper Oracle looks as though it could significantly compete against AWS. Oracle has the benefit of owning its own hardware company and so it can control the price margins as much, if not more than AWS can.

Oracle also has the benefit of having established itself as a giant of the enterprise software market, its database is still the dominant market leader according to Gartner, and it also operates across all three tiers of the cloud.

AWS meanwhile has struggled slightly to display its hybrid cloud and private cloud capabilities. Both are available, but it is seen as much more of a public cloud company than anything else. Oracle wants to be THE cloud company that dominates the market across all tiers.

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