Mark Hurd, Oracle's president, said that the lines between private and public cloud services will become blurry and the pricing models attached to them will also meld licensing and subscription.
Hurd, who made the comments on a conference call reiterating Oracle's cloud strategy, touted a series of releases, betas and vertical offerings. The overall message: Oracle is committed to the cloud and "hiring right now."
The conference call didn't offer much new information, but there will be new compute, storage and social cloud services in the first half. The mantra for Oracle is that it's offering a broad selection of platform as a service, infrastructure as a service and software as a service.
Among the key points:
- Oracle Executive Vice President Thomas Kurian said the company has launched new releases of ERP, sales and marketing, human resources, talent management and customer service in the cloud.
- On the platform as a service front, Oracle has database and Java as a service and releases of social relationship management and monitoring on tap.
- Storage, messaging and compute as a service are in beta.
- Oracle has two data centers in Europe and two in Asia Pacific for international demand and data requirements.
- Executives were upbeat on Oracle's infrastructure as a service for private clouds. The service, announced Jan. 15, revolves around engineered systems that use a subscription model. In a nutshell, customers use systems for capacity on demand and can provision up and down. Oracle sets up the systems, uses its best practices and runs the machines as if it were its cloud.
That final nugget gets to Hurd's major point. Subscription and licensing pricing models will blend together. Indeed, Oracle's infrastructure as a service on premise works like this (CoD is capacity on demand):
As for the illustration, Oracle outlined the following on its offering:
As an example, a traditional purchase of an Oracle Exadata X3-2 Engineered System that is priced at $1,000,000 would cost a total of $1,360,000 over three years when hardware support costs (12% per year) are included. Most of these costs would be incurred at the time of system acquisition. Under Oracle IaaS, the same system would cost $1,080,000 over three years if no CoD CPUs are used, and would be paid monthly instead of all upfront. Over 3 years, this provides a 20% savings even without including the time value of money. If CoD CPUs are used in the last month of each quarter (four months per year) to speed up quarter close jobs, the Oracle IaaS cost over three years is $1,320,000 which is still lower than the purchase fee (again ignoring the additional time value of money benefits).
Bottom line: No matter what you label Oracle's model regarding the cloud the game is still the same: Collect maintenance and support.