Could Oracle Cloud Trump Amazon Web Services?

OK, we all read or heard it recently in one form or another.  Oracle has told Amazon that it’s “game on” for leadership in the “commodity” Infrastructure as a Service (“IaaS”) market.  In other words, “we’ll beat you on price”.  Lots have folks have called the declaration crazy - Oracle can’t compete with Amazon on the basis of commodity pricing and never will.  Funny thing is, I think Oracle could actually pull it off.  Before you call the loony bin to have me hauled off, let me set some context and provide an explanation.

Context

I’m obviously an advocate of Oracle technology.  At the same time, I’m a big fan and user of Amazon Web Services.  Love ‘em both.  But I do think that their different approaches to providing cloud services could be a difference-maker.

Explanation

In July 2013, David Strauss wrote a very detailed comparison of Containers versus VMs for the Linux Journal.  Rather than plagiarizing or rewriting, I’ll just boil it down:  in today’s world, containers are require less overhead than VMs, scale better, are lower cost and are easier to use.

With the 12c database, Oracle’s made a serious commitment to the container approach.  I suspect we’ll seem them leverage the container concept throughout their IaaS offerings.  AWS, on the other hand, sells and rents VMs (EC2 AMIs, for example).  Containers = lower cost, quicker provisioning, easier administration, lower overhead.  If Oracle continues to adhere to the container architecture, unless Amazon makes some technology changes, big advantage Oracle.

Containers v. VMs is a difference that significantly impacts the business model.  So, yeah, the technology matters.  And that’s why I think Oracle Cloud could trump AWS…even on the basis of commodity pricing, assuming Oracle is willing to accept the paper-thin margins that go with commodity pricing (and they might, with the strategy of up-selling IaaS customers to higher-margin Platform as a Service offerings).  It’ll be interesting to see how Amazon (and Rackspace and Microsoft Azure and all the other IaaS players) respond to the challenge.

As always, comments and concerns about my sanity are welcome.