Oracle to announce cloud infrastructure service at OpenWorld, Ellison says

CEO Larry Ellison revealed the company's plans for a new IaaS (infrastructure as a service) offering during the company's earnings call

Oracle will announce a new IaaS (infrastructure-as-a-service) offering at the upcoming Oracle OpenWorld conference in San Francisco, CEO Larry Ellison said on Thursday.

The service will provide customers with access to secure, virtualized compute power hosted in an Oracle data center, Ellison said. Oracle will also sell software for customers to build "identical services" in their own data centers, allowing them to move workloads back and forth between the public and private clouds, he said.

ANALYSIS: IaaS making slow headway

Ellison made his remarks during a conference call to discuss Oracle's quarterly earnings.

The new service means Oracle will be able to provide "all three tiers of cloud computing," Ellison said, spanning applications, a PaaS (platform as a service) in the form of a Java development platform and database, and now an infrastructure offering that could put it into competition with Amazon Web Services, which Ellison has praised in the past.

The public-private cloud aspects of the service mean it will also rival services and products from IBM, Hewlett-Packard and others.

Ellison didn't provide any details about the service, including pricing or availability. OpenWorld runs Sept. 30 to Oct. 4 in San Francisco.

The Oracle chief also confirmed the expectation that Oracle will announce the next version of its flagship database, 12c, at OpenWorld.

"There are some very exciting, specific features for the cloud," Ellison said, including "pluggable databases which allow multiple tenants to securely co-exist in the same database."

Database 12c won't be released until "December, January, February of next year," Ellison said.

Earlier Thursday, Oracle reported that net income for the quarter ended Aug. 31 rose 11 percent to US$2 billion, but that revenue fell 2 percent to $8.2 billion. The period was marked by some strength in software but a sharp drop in hardware revenue.

New software license sales and cloud subscription revenues rose 5 percent to $1.6 billion, Oracle said.

But revenue from hardware systems fell 24 percent to $779 million. Oracle has been de-emphasizing its efforts to sell commodity servers in favor of higher-margin "engineered systems" that combine Oracle software with servers, networking and storage gear.

In a statement, Oracle President Mark Hurd claimed that sales of Oracle's Exadata, Exalogic, Exalytics and other engineered systems more than doubled. "For the full year, we expect to double engineered systems sales to well over $1 billion. Oracle's new cloud business is also approaching a $1 billion annual run rate. These two businesses will drive Oracle's growth for years to come," he said.

The company sold three times as many Exalogic application server machines as it did in the same quarter last year, Hurd said during the conference call, without giving any actual figures. Oracle's newer Exalytics analytics platform had a "strong ramp," he said.

As for other hardware, Oracle has "the hottest Unix box in the industry" with its Sparc T Series servers, he said. The platform experienced double-digit growth in the quarter, according to Hurd.

Oracle's software sales were helped by acquisitions in the past year, such as of applications vendors Taleo and RightNow.

Software growth "was little better than we expected," Hurd said. "We think we have the people and the services to win a lot of business in the cloud."

For the most part, customers purchasing Oracle's next-generation Fusion Applications are choosing cloud-based deployments, and the bulk of sales are for HCM (human capital management) software, Ellison said.

Oracle had "very strong HCM wins in the quarter" for Fusion, Hurd said. "We're seeing the same ramp now on the [customer relationship management] side."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com.

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