As the tech giant snatches up cloud companies to offer a branded Oracle cloud solution, observers ask whether or not this approach will fly? Companies that have thrived in the cloud recognize that it’s more than a way to deliver applications. It’s an approach that means freedom to try out new things, quickly discard things that aren’t working, and iterate on things that are–it means agility. Will they get this with Oracle? We can only respond by looking at history.
The cloud gives flexibility, Oracle gives audits
You won’t find too many Oracle customers willing to testify to the flexibility and freedom they’re getting, but you will find a lot of complaining about its heavy-handed tactics. As Robert Sheldon has noted in TechTarget, Oracle’s licensing policies are “…notoriously vague and confusing. One misstep and you can end up owing thousands of dollars in audit fees.” He even goes so far as to suggest that: “Oracle makes it easy to goof up in a number of ways, and the company is happy to reap the benefits of your pain.” His lengthy list of things that can get you in trouble includes: lack of licensing inventory; not knowing what’s installed where; metric misunderstanding; indiscriminate virtualization (a particularly confusing one); mismanaged fault tolerance; and indiscriminate implementations.
The law firm Scott & Scott runs an entire blog dedicated to Oracle auditing, where they noted that Oracle likes to “surprise customers with licensing fees associated with product options that the company never actually used” which may have been inadvertently enabled at some point. If you’re wondering whether or not Oracle is going to ease up on its policing of cloud customers, consider how easy it is to turn features on and off in the cloud–why would they ease up on a great new revenue stream?
Oracle employs a kind of “death and taxes” philosophy to auditing in which no one is immune. PC World recently reported an incident in which Oracle hit the candy company Mars with an audit that required 233,089 pages of documentation at its own expense. Think about that the next time you bite into a Milky Way bar.
Why is Oracle just now getting cloud religion?
In The Force Awakens, when asked to explain the actions of a mysterious alien character, Han Solo said, “I don’t know, but it ain’t good.” Observations regarding Oracle cloud motives may rightly elicit a similar response. Is Oracle–quite possibly the last major solutions company to get cloud religion–simply an aging hipster of the tech industry? A holdover from a previous IT generation attempting to “get with the program”? If only that were the case…
Julie Bort of Business Insider suspects otherwise. Her report on “ugly tactics” suggests that Oracle hit a customer with a huge audit, and then hinted that it could make the threat disappear if it bought credits for cloud services. Oracle, she reports, is paying salespeople huge incentives to sign new cloud contracts for a slew of services and features that they may or may not need.
If Bort is right, Oracle’s sudden interest in the cloud isn’t just an aging hipster’s attempt to be cool–they’re trying to “buy cool” so that they can dictate to the rest of us what “cool” means. Analyst Patrick Moorhead pointed to out IDG’s Katherine Noyes that, “It’s not in the company’s best interests to change anything, as they have a captive customer audience. It’s hard to leave Oracle once you get it installed.” This, he says, is what’s driving their cloud acquisition strategy.
Analyst Frank Salvo said as much in a Computerworld interview: “As Oracle’s traditional business in software licenses is under pressure, it needs to quickly ramp up cloud subscriptions to make up the difference. It’s much easier to buy those customers than it is to grow them organically with cloud apps newly developed internally. Oracle’s IaaS offerings are simply to ensure that it owns the whole stack, from cloud infrastructure to applications.”
Those who fail to learn from history are doomed to repeat it
Can we deduce from all of this that Oracle will be just as heavy-handed in the cloud as it is on-premise? We’d be fools not to. Oracle wants to control the experience, which is antithetical to the cloud. It’s not really “cloud computing” in any sense, other than that you’re running applications on Oracle’s computers and not your own. While there could be some OPEX/CAPEX benefits to using such a proprietary cloud service, there certainly won’t be flexibility, freedom, or agility.
For those who are already locked into the Faustian bargain, Oracle cloud services may not be a bad idea–if you have to spend eternity with the devil, you might as well bring ice cubes. This, however, is exactly why many companies aren’t going to go for it. Oracle’s cloud strategy, according to John Rymer of Forrester, is “no slam dunk, largely because of customers’ past experiences with those vendors.”
For the up-and-coming players–the next generation of innovative companies born in the cloud–the next strategic move is definitely NOT to get in bed with Oracle. Will companies at the crucial juncture at which they’re outgrowing MySQL, and need a new level of database scalability, go for it? Some will, but those who understand what cloud computing really means will be able to quickly discern the difference between what Oracle is offering and the true benefits of the cloud. I’m confident that if they know their database options, they’ll avoid the Oracle trap like the plague.
And as for the Oracle cloud strategy itself? Shifting the complicated licensing and provisioning topology schemes to the cloud is precisely opposite the ‘promise of the cloud’, i.e. agility. Is it possible to buy an enterprise-class, scale-out, fully ACID relational database which can add/drop nodes on-demand, and avoid all licensing headaches? If Oracle really wanted to be ‘with the times’, here’s an example they can follow…