A senior VP at Oracle says that its unexpected Microsoft alliance is a step towards breaking Amazon’s control of the cloud (ORCL, MSFT, AMZN)
Category : entrepreneur
A top Oracle executive said Monday that the tech giant’s new alliance with Microsoft, announced in June, will turn the one-time bitter rivals into stronger competitors against Amazon Web Services, their common cloud foe.
Clay Magouyrk, an Oracle senior vice president, says the tech behemoths remain competitors, but the alliance simply makes so much business sense.
“Do they love us? Do we love them? We’re still competitors,” he told Business Insider at Oracle OpenWorld which opened in San Francisco on Monday. “So why would we get together? Because we think the value to us and our customers is just huge.”
The alliance allows businesses to seamlessly set up and run their networks on both Microsoft Azure or Oracle’s cloud infrastructure. This makes it easier for clients to pick and choose different offerings from both companies.
Magouyrk says the partnership points to a future where cloud computing is headed — a so-called multicloud world, where businesses will be able to move easily from one cloud platform to another. It’s a world that’s entirely different from the one now dominated and being pushed by Amazon Web Services, Magouyrk said, where customers are essentially locked-in after making drastic changes to their software to take full advantage of the platform.
“AWS still has this idea that everyone is going to adapt to them,” he said. It’s a model, he said, where Amazon is essentially saying, “‘Hey, we know how to do cloud and if you will just rewrite all of your stuff to do it our way, then you will be cloudy and life will be good.'”
From Amazon Web Services to Oracle Cloud
Magouyrk is familiar with the Amazon way, and the company’s unexpected and impressive rise as the dominant player in the cloud. He was one of the engineers who helped build Amazon Web Services, which outmaneuvered the traditional enterprise tech giants, including Oracle, IBM and Hewlett-Packard, to dominate the new trend in corporate tech.
Today, Amazon has about 33% of the nearly $100 billion cloud infrastructure market, followed by Microsoft with 16% and Google with 8%. Oracle remains a very minor player in that market. But it the third-place player in the cloud software market, also known as software-as-a-service, behind Microsoft and Salesforce, according to Gartner.
Magouyrk left Amazon to join Oracle in 2014. He has grown critical of Amazon’s strategy, and he thinks Oracle, which remains a major provider of enterprise software and database systems, has a huge advantage in what he sees as a long game in the cloud: its huge customer base.
Founded in 1977, Oracle now has more than 400,00 corporate customers in 175 countries. Many of them still run private data centers, while exploring moving all or part of their networks to the cloud. Oracle’s making a bet that their own customers will move to the Oracle cloud.
“I think it’s very easy to underestimate the value and the stickiness of the Oracle customer base,” Magouyrk said. “Oracle has an incredibly loyal and valuable and dedicated customer base. That’s the reason Oracle has this chance in cloud infrastructure.”
‘The idea that everything can run in one cloud is not true’
But the future he envisions is one where different cloud platforms compete and interoperate. Magouyrk was recruited to Oracle by Don Johnson, who leads Oracle cloud infrastructure development, and who was also a veteran of Amazon Web Services.
Magouyrk says that he and Johnson didn’t come to Oracle with the intention of copying their former employer’s business model, but rather, to explore a more modern way of thinking about cloud computing.
“We didn’t come here to build an AWS,” Magouyrk said.
Amazon’s rapid rise to success in the cloud has largely been attributed to its ability, starting from its earliest days, to attract startups and small and medium sized businesses who did not have existing servers or data centers to worry about. While AWS has certainly had its share of success with larger customers, Oracle has a long history with most of the very biggest companies in the world.
Magouyrk points to a bigger opportunity in the enterprise world, including Oracle customers who have yet to make the migration to the cloud.
“The fact is the pie keeps getting bigger,” he said. “For me to succeed, I don’t have to take customers from AWS. We’re all taking customers from this on-premise world into the cloud. That’s where I focus my energy.”
That’s also where the Microsoft partnership comes in, he says. In Oracle’s view, he says, it’s a step towards a more hopeful future where it’s just that easy to shunt software between clouds.
“The idea that everything can run in one cloud is just not true,” he said. “Cloud infrastructure companies are going to have to enable interoperability between them. Obviously, they will still be competitors, in the same way energy companies and telecommunications companies are competitors. But customers demand interoperability.”
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