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Oracle Cloud Launches IaaS War Vs Amazon Web Services

Oracle (ORCL) Cloud is launching second-generation Infrastructure as a Service (IaaS) to aggressively counter Amazon Web Services, according to Chairman Larry Ellison.

“We’re very excited about the rollout of our generation 2 infrastructure as a service data centers,” Ellison told Wall Street analysts during an earnings call Thursday.

“These new data centers give us the significant cost and performance advantage over Amazon Web Services,” he added. “Plus, our new bare metal offering makes it possible for our customers to lift and shift their entire existing corporate infrastructure, data and applications without any changes whatsoever and move it to the Oracle Public Cloud. You just can’t do that with Amazon Web Services.”

Oracle OpenWorld 2016: Lift and Shift

The Oracle “lift and shift” strategy will take center stage at the Oracle OpenWorld 2016 conference in San Francisco. Lift and shift allows customers to upgrade an entire on-premises network, database and applications from an on-premises deployment to an Oracle cloud installation, Ellison asserts. “So for the first time, we have this big technology advantage in the infrastructure as a service,” he says. “We expect this will enable Oracle to accelerate our infrastructure as a service business to the same high growth rates that we’re currently experiencing in both SaaS and PaaS.”

Oracle’s cloud revenues were $969 million in Q1 2017, up 59% from Q1 2016, according to fiscal results shared yesterday. The bulk of the cloud revenues involved SaaS and PaaS ($798 million). Still, Wall Street was disappointed with Oracle’s overall revenue forecast and company shares were down overnight.

Oracle vs AWS Cloud Competition

Amid Ellison’s IaaS optimism, Oracle faces heightened competition from Amazon on the database front. Partners and customers moved more than 1,000 databases to AWS from January through mid-March 2016. In some cases, the migrations involved dumping Oracle’s databases for Amazon’s Aurora alternative. The secret to the migration success: The AWS Database Migration Service — a “fully managed service” that Amazon has been previewing to partners and customers this year.

Still, Ellison predicts partners and customers will embrace multiple cloud services. “The bigger opportunity is when you buy PaaS and infrastructure as a service together,” he asserts. “[That’s] where you’re either writing brand-new, net new custom applications, or you’re lifting and shifting an existing custom application to our infrastructure as a service and then moving the database associated with that application to our PaaS.”

It all sounds promising. But overall, Amazon and Microsoft continue to lead the overall IaaS cloud market.

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