Larry Ellison Knocks AWS Over Outage: Oracle’s Cloud ‘Never, Ever Goes Down’
Wade Tyler Millward
‘Our strategy is to build a large number of smaller, less expensive data centers,’ Oracle Chief Technology Officer and Co-Founder Larry Ellison says. ‘We think that improves reliability dramatically. We won‘t have this giant data center going down. It reduces the blast radius of what happens when things go down. Less goes down.’
Oracle Chief Technology Officer and Co-Founder Larry Ellison took swipes at Amazon Web Services just days after network issues caused a vast array of AWS-powered websites and services to become inaccessible, saying that a customer told him that Oracle’s cloud “never, ever goes down.”
During Austin, Texas-based Oracle’s earnings call Thursday for the second quarter of fiscal year 2022, Ellison outlined “fundamental differences” in how Oracle and Seattle-based Amazon approach data center construction – saying that Oracle’s strategy prevents major outages.
“One of the fundamental differences in our strategy versus their strategy – they are building a small number of very, very large data centers,” Ellison said during the call. “Our strategy is to build a large number of smaller, less expensive data centers. We think that improves reliability dramatically. We won‘t have this giant data center going down. It reduces the blast radius of what happens when things go down. Less goes down.”
Ellison said that one customer in particular – only described as a large telecommunications company that uses Oracle, Google, Amazon and Microsoft’s clouds – complimented Oracle’s cloud resiliency in a note.
“The note basically said, ‘The one thing we’ve noticed about Oracle’s cloud is that it never, ever goes down – We can’t say that about any of the other clouds,’” Ellison said. “We think this is a critical differentiator – availability.”
However, in March an article from Security Report noted a global Oracle Cloud outage that lasted about two hours – not as long as the Tuesday AWS outage.
Coming For Microsoft
On the earnings call Thursday, Ellison went on to describe how he sees Oracle’s cloud offerings besting the competition, even though most reports put AWS first in terms of market share, followed by Microsoft and followed by Google.
“We think we have a bunch of differentiators and we‘ll be able to compete very, very effectively with security, reliability, combination of apps and infrastructure, autonomy, and a bunch of other other things the other guys just will not be able to do,” Ellison said.
On the call, Oracle CEO Safra Catz referenced a Gartner report this year that put Oracle’s cloud offerings ahead of Google in terms of technical ability.
“We actually passed Google this year, and are higher than where Microsoft – who has been in this longer than us – was a year ago,” Catz said. “But in addition, that scorecard doesn‘t even measure the capabilities we have in handling very large databases, which of course, we do uniquely of all the other hyper scalers. It’s all very interesting, but we have things in addition to application in the infrastructure world that they can not handle.”
Amazon, SAP Targeted
Ellison also took the time to criticize Amazon’s database offerings, longtime competitor SAP and younger upstart Workday.
“Our version of MySQL is much better than Amazon’s version – much faster,” Ellison said on the call. “I mean, more than 10 times faster because of HeatWave. We have this query optimizer they don’t have at all.”
Ellison labeled SAP and Workday his company’s biggest competitors. He continued his line of attack on SAP cloud products, saying they are not “true cloud” products and saying that SAP too infrequently updates its cloud products.
“They bought some edge products around the cloud, but they didn‘t actually rebuild their software for the cloud. That’s the same old 35 year old software they’ve been installing forever,” he said. “Their goal is simply to hold on to their installed base. But they are losing customers to us.”
Ellison said FedEx and the Petronas gas company are examples of SAP customers Oracle has recently taken. “We‘re taking customers from SAP’s install base,” he said. “They’re still holding on to more of their base than we’re taking, but we’re making inroads.”
Ellison said that Workday has done well in human capital management (HCM) but not in enterprise resource planning (ERP). “Try to go out and find live Workday ERP customers. Try to find any. So we‘re winning almost everything in cloud ERP. Ninety eight percent of the time we beat Workday,” he said.
The Oracle co-founder did pay Microsoft a compliment during the call, saying that the company has been able to convert on-premises customers to cloud customers before Oracle. “A lot of companies like Microsoft did a great job of moving their entire Microsoft Office install base into the cloud to dramatically increase the size of their cloud business,” Ellison said. “Unfortunately, we didn‘t have the same option or opportunity.”
But Oracle’s large on-premises customer base is actually an opportunity more than a hindrance, Ellison said.
Oracle has 7,500 customers in on-premises ERP and only 1,000 of them have moved to Fusion Cloud ERP, presenting an opportunity for migration.
What’s more, Fusion has 8,500 customers, only 1,000 of them from the on-premises business, Ellison said. Adding in new customers from Oracle subsidiary NetSuite, Ellison estimated a total of 35,500 cloud ERP customers new to Oracle.
“Whether it‘s a small company like Infor or a large company like SAP, or a variety of other companies, the vast majority of our cloud ERP customers are not coming from our install base. They’re coming from someone else’s install base,” he said. “Eighty-five percent of them that we currently have are from someone else’s install base. “
“We are not on our way to building a $20 billion cloud ERP business in five years – I think it‘s going to be a lot bigger than that,” he said.
Ron Zapar, CEO of Naperville, Ill.-based Oracle partner Re-Quest, told CRN in an interview that he hears more demand from Oracle on-premises customers to move workloads to the cloud.
“People have let the early warriors fight the battle, and now they feel like it (OCI) is a little bit more mainstream,” Zapar said. “We’re seeing everything from Oracle Database workloads, traditional things like backup and DR (disaster recovery), which we’ve kind of always done. But we’re seeing a lot more people look at it to do IAS, moving application workloads to the cloud. We have one customer right now that we’re working with that’s virtualizing their entire data center in the Oracle Cloud.”
Zapar said provisioning and implementing Oracle’s cloud products continues to simplify over time, and he looks forward to more investment in simplifying deployment in the new year. He would also like to see more training and certification resources for Oracle partners, he said.
Hurd Lawsuit Hurt Oracle
Despite the usual tough talk from Oracle’s executives, the company reported a net loss of $1.25 billion for the quarter, blaming a one-time payment related to “a 10-year old dispute surrounding former CEO Mark Hurd‘s employment,” according to a company statement.
Hewlett-Packard Co. sued Oracle in 2010 to try to stop the company from hiring Mark Hurd after HP dismissed Hurd following a sexual harassment investigation. Hurd served as president and then co-CEO of Oracle alongside Catz. He died in 2019 at age 62.
Oracle reported $10.4 billion in total quarterly revenue, up 6 percent year over year. Cloud services and license support revenues increased 6 percent to $7.6 billion, according to the company. Cloud license and on-premises license revenues increased 13 percent to $1.2 billion.
The company reported 22 percent growth in its infrastructure and applications cloud businesses, approaching $11 billion in annualized revenue.
Oracle’s stock traded at $98 in after-hours trading Thursday, up about 10 percent from $89.14 at market open.