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Oracle CTO Larry Ellison Details Two-Layer Cloud Strategy To Undercut AWS Prices

Ellison previewed new flexible billing models for cloud consumption to bolster performance and automation advances he claims will make customers' cloud bills 50 percent cheaper than using Amazon.

Oracle founder and CTO Larry Ellison on Tuesday shared the software giant's strategy to attack the public cloud market through services that deliver cost benefits and more-flexible consumption plans.

At an event held at Oracle's Redwood Shores, Calif. headquarters, Ellison described discrete strategies for the IaaS and PaaS layers of the cloud stack, both designed to undercut the prices of rival cloud providers.

As an Infrastructure-as-a-Service provider, Oracle plans to match AWS list prices for compute and storage, but deliver infrastructure that speeds up the execution of workloads, reducing overall cost, he said.

[Related: Oracle Illuminates Plan To Compete In Public Cloud With New Data Centers, Bare Metal Servers]

"Because Oracle's infrastructure is so much faster than Amazon, your bill will drop by half," Ellison pledged.

Moving up the stack to Platform-as-a-Service, encompassing Oracle database, analytics and middleware services, the push has been to develop advanced automation software that allows customers to slash labor costs—the primary expense in running a database—while also removing the risk of human error.

While the approaches are very different at those two layers, Ellison said the goal is the same: "to reach a point where we can guarantee if you move a workload from Amazon to Oracle, your bill will drop by 50 percent. "

Ellison promised more details in two weeks' time at the company's annual OpenWorld conference that starts Oct. 1.

Bolstering both pricing strategies will be the introduction of new billing models meant to ease purchasing decisions for cloud services.

Oracle allows customers to transfer their existing database licenses to IaaS environments, either from a rival like AWS, or Oracle's own offering.

But because labor costs "are what you really have to drive out of your data center," Ellison said, as well as the human error factor, Oracle's leadership sees its PaaS offerings as ultimately a better deal than infrastructure.


For customers struggling with the TCO (total cost of ownership) equation, however, trying to compare the list price of IaaS to the automation savings gained from PaaS, Oracle will make it easier to experiment by allowing database licenses to transfer to its platform services.

Those customers will only have to pay the incremental difference for the hosted infrastructure and automation software costs. They can even select those PaaS services to run on specialized Exadata machines for better performance and reliability.

That offering extends to the Cloud at Customer portfolio through which Oracle sets up a cloud server behind the customer's firewall, then rents virtual machines just as it would from its own cloud data centers.

To further ease the process of procuring cloud services, Oracle will streamline its contract for pre-purchased consumption through introduction of "universal credits."

Those types of credits can be applied across the board for IaaS and PaaS services in all cloud regions, Ellison said.

"You don’t have to tell us, don’t have to figure out what you're going to consume in advance. Just use any of our cloud services on demand," Ellison said.

"The actual business terms are very simple," Ellison added. The amount of spending determines the discount across all services, and customers can use the one contract to "try anything new."

Universal credits will be available on September 25, he said, with plans for annual or monthly commitments.

"My expectation is other cloud suppliers will move to this kind of contracting vehicle," Ellison said. "But they're not there yet."

Ellison also previewed a "self-driving" database Oracle will unveil at OpenWorld, one that tunes itself while running, backs up, patches and updates automatically.

For customers that run that autonomous software, Oracle will offer a 99.995 uptime SLA (service-level agreement), which translates to 30 minutes of acceptable downtime per year for maintenance.

The "system never breaks," Ellison said. "There's nothing close in the cloud industry."

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