Oracle CloudWorld 2022: Alloy is an innovative way to expand cloud services

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Summary

Oracle CloudWorld 2022 came back to life in Las Vegas after a two-year pandemic-driven hiatus. The conference was a grand production, with 13,000 attendees and 1,200 educational sessions.

Several Omdia analysts attended the conference with varying interests in Oracle’s technologies and evolution as a cloud service provider (CSP). They have also shared their insights on what Oracle’s evolution and new announcements mean to the market. Links to the reports by Omdia analysts Maxine Holt, Bradley Shimmin, and Mila D’Antonio can be found in the Further reading section.

Oracle Cloud Infrastructure (OCI) data center solutions are evolving

Of particular interest to this analyst is Oracle’s cloud service delivery infrastructure. The major infrastructure announcement at CloudWorld was Oracle Alloy, which allows any qualified company to become a CSP based on Oracle’s cloud data center infrastructure and services. Before we look at Alloy in detail, it is important to understand the evolution that brought Oracle to this point.

Amazon was the first to launch cloud services in 2006, with Google and Microsoft following in 2009. Oracle made its cloud services debut in 2016 with one region and five services, and it now has 40 regions and over 100 cloud services. The company refers to Oracle Cloud Infrastructure (OCI) as Gen 2, which refers to the purpose-built design that supports moving existing workloads to the cloud as well as building cloud native applications. Oracle has done a remarkable job positioning itself as a contender, considering the company’s comparatively short tenure offering cloud services.

In the Omdia Universe: Selecting a Cloud Service Provider, 2021–22 report, Omdia ranked Oracle in the Leader category alongside Amazon, Google, IBM, and Microsoft. Oracle’s overall score exceeded IBM’s score, essentially ranking it in fourth place among the field.

From a data center infrastructure standpoint, Oracle now operates 40 cloud regions globally. While the number of regions and their distribution across continents are impressive, evaluating CSPs based on their regions is a complete “apples and onions” comparison. The number of regions, zones, edge locations, points of presence (PoPs), etc. that CSPs have is part of their bragging rights. In the end, it is an exercise in architecture comparison as it relates to each customer’s needs. Nonetheless, Oracle has been improving its capabilities for geographic distribution and resiliency with its own architecture solutions.

Oracle’s answer to AWS Outposts and the litany of other private cloud solutions is OCI Dedicated Region Cloud@Customer (DRCC), which was announced in July 2020. For the sake of comparison, AWS Outposts was announced in December 2019. Oracle thus demonstrated an impressive time to market with OCI DRCC, no matter how it came about.

At the first announcement of OCI DRCC in 2020, the price tag was $500,000 per month for the dedicated private cloud infrastructure, which (based on an illustration) appeared to include two dozen or more racks. In June 2021, Oracle announced a smaller and cheaper version of OCI DRCC with a minimum spend commitment of $1m per year. This version includes 12 racks with an initial IT load of 18kW, according to Oracle staff at CloudWorld. At 18kW, that would be 1.5kW per rack, which is well below the arguable industry average of roughly 6kW per rack. This suggests that the entry-level OCI DRCC is a minimum configuration that would have room to expand and could impact the minimum spend price.

All that said, a rather more reasonable entry point will open up a broad spectrum of potential clients. The entry-level OCI DRCC may not exactly be a loss leader, but it has the potential to deliver sales like one.

Vodafone OCI Dedicated Region Cloud@Customer adoption

At CloudWorld, Oracle facilitated a 1:1 meeting with a handful of industry analysts and Scott Petty, chief digital and information officer of Vodafone, one of the largest telecom companies in the world. Vodafone splits its CSP usage roughly one-third each between AWS Outposts, Google Cloud Platform (GCP), and OCI. As just one indication of scale, Vodafone manages some 6,000 databases and related applications.

Inside Vodafone’s three main European Union (EU) data centers, it has installed three 24-rack OCI DRCC deployments. Vodafone will provide the space, power, and cooling, and Oracle will manage everything else. The plan is to move several thousand databases and related applications to Oracle’s OCI DRCC infrastructure.

Vodafone’s Petty supports the cost, scale, speed-to-market, and other benefits of a centralized and standard cloud computing platform and believes that instead of assembling your own platforms for your core services, you should use the central platform, where automation and security are built in. It is a classic “build once, deploy everywhere” approach. This method lets business unit leaders focus more on seizing revenue opportunities in their local markets and less on IT maintenance and updates.

According to Pedro Sardo, director of IT operations, infrastructure, and technology at Vodafone, “We run high-transaction systems that must be highly available, and we have confidence that OCI can do this.”

Full suite of infrastructure solutions

CSPs are keen to make it easy to adopt their cloud, help customers migrate workloads, provide the resiliency to keep those workloads available, and offer service options that help customers protect those workloads and the data from failure or loss. Achieving these goals is not a simple task, but Oracle has developed a reasonable suite of solutions to assist.

Beyond Oracle’s public cloud regions, it offers OCI DRCC for on-premises (or in colocation) private cloud. OCI DRCC’s lower cost entry point makes adding more private cloud regions or using a second OCI DRCC for failover and disaster recovery an easy pill to swallow.

Oracle Roving Edge Infrastructure was announced in February 2021, and it offers a ruggedized hardware solution that brings core infrastructure services to the edge with Roving Edge Devices (REDs)—ruggedized, portable, scalable server nodes. REDs provide access to Oracle services at remote edge locations and are scalable—from a small, single self-contained server to a larger cluster of 15–30 nodes delivered in a prefabricated enclosure, providing rack space, power, and HVAC.

In Oracle’s quest to help customers move their workloads, in October 2022, it announced Oracle Cloud Migrations, which joins the existing set of migration tools to move workloads to OCI. The service expands the range of migration tools and services with native support to move virtual machines (VMs) from on-premises environments and other clouds to OCI.

In March 2022, Oracle announced the beta version of OCI Full Stack Disaster Recovery, which is based on the Oracle Maximum Availability Architecture (MAA). MAA manages the transition of infrastructure, platforms, and applications between OCI regions from anywhere around the globe, including OCI DRRC deployments.

Oracle Alloy announcement

Oracle Alloy was announced at CloudWorld on October 18, 2022. In a nutshell, Oracle is handing over the OCI keys to select partners and organizations that qualify to white label Oracle cloud services and sell them. More importantly, Alloy can be operated in a partner’s own data center under its full control to assure data control or sovereignty needs.

Alloy offers the same 100+ services available in OCI’s public cloud. It allows a partner or customer to build their own cloud services and brand and customize those services to meet the unique needs of their customers or the industries they serve. Alloy customers also control commercial terms and customer relationships.

Alloy customers can introduce their cloud services with an already integrated hardware and software platform in their own data centers. This capability enables them to enter new markets using their own hardware infrastructure. They can also use Oracle’s OCI DRRC hardware infrastructure offering under the same minimum spend terms as other OCI DRRC customers.

Wrap-up details from CloudWorld

Oracle reached a milestone recently, with non-Oracle workloads consuming more of OCI than Oracle workloads. This is quite an accomplishment that will help lure in new customers for non-Oracle workloads, considering OCI’s positioning in the market as being best for Oracle applications and databases.

Doug Kehring, Oracle executive vice president of Corporate Operations, discussed how the company has been working to rebuild its partner ecosystem. Historically, Oracle would compete with partners, which does not facilitate good relationship building. Looking at how the rest of the industry is benefiting from partner relationships, this is a big culture and operational change and is clearly welcome among Oracle’s partner community. The company also sponsored a Partner Summit at CloudWorld, a further showing of its commitment to the cause.

Deeper partnering with customers was also front and center at the conference. A number of sessions covered how Oracle is partnering with customers to create better solutions for them and, as a result, better cloud solutions for their industry.

Partnering with other cloud providers is also on the agenda. Oracle and Microsoft announced a partnership in July 2022 that gives Azure customers direct access to Oracle databases on OCI, including no data ingress or egress fees over this connection. With Oracle’s newfound realization that there is more success to be had by facilitating customers’ need for multicloud access, Omdia expects a broader set of partnerships in the future.

It is worth wrapping up by reiterating that Oracle does not charge for data ingress or egress with the Azure interconnects. The company also has substantially lower network traffic fees in general, which is a big advantage for its position in the market. At CloudWorld, the company facilitated multiple opportunities for analysts to interact with OCI customers who voiced the importance of Oracle’s fee policies. In a hybrid and multicloud world that is fraught with exorbitant data egress fee horror stories, this is a competitive advantage that allows Oracle to capture revenue share without having to capture 100% share of wallet.

Appendix

Further reading

Omdia’s Universe: Selecting a Cloud Service Provider, 2021–22 (October 2021)

“Oracle CloudWorld highlights how CX will drive industry growth” (November 2022)

“Oracle has been busy: A review of Oracle CloudWorld 2022” (November 2022)

“Oracle CloudWorld 2022: Oracle redefines home field advantage with MySQL HeatWave” (November 2022)

“A softer, gentler, and more human Oracle: Who would have thought it?” (December 2019)

Author

Alan Howard, Principal Analyst, Cloud & Data Center Research Practice

[email protected]