The traditional Oracle marketing playbook is to draw a bead on the leader in any category and try to talk themselves into a rivalry. In what has become an annual event, they’re trumpeting yet again that they’re serious about their IaaS offering (and also distracting from their latest earnings disappointment).
I’m sure we’ll hear Oracle loudly and brazenly proclaim itself the leader in cloud in every imaginable dimension next week at OpenWorld. An Oracle recruiter recently wrote with a straight face: “we’re the only company delivering the most compelling services at every layer of the cloud” (I struggled to find a single factual statement in the unsolicited message). As with candidate Trump, the fundamental question about Oracle is do they really believe their delusional statements or are they just completely uninhibited by any need for basis in fact?
While Oracle has purchased a bunch of SaaS revenue, they are nowhere in cloud infrastructure (and falling further and further behind). They’re not even listed in the most recent Gartner Cloud Infrastructure Magic Quadrant. This is likely catastrophic for Oracle as the immense gravitational pull of the cloud infrastructure layer is already eating into their database and application platform franchises. I expect they will end up a SaaS company that also aggressively milks its legacy on-premises business for as long as possible (customers will look back fondly at today’s modest prices for Oracle software maintenance).
To play in cloud infrastructure, especially to serve Oracle’s enterprise customer base, requires a vast infrastructure investment in a global footprint of datacenters and networks, which in turn requires many billions of dollars in capital expenditures. When we compare Oracle’s expenditures over the last twelve months with the companies they claim to be competing with, it is hard to discern any commitment to building out a competitive infrastructure:
But it gets worse when you consider that Oracle is trying to catch up with companies that have invested tens of billions of dollars in their infrastructures for a decade or more. Shouldn’t Oracle need to outspend them if it wants to claim it is catching up? Now these numbers are not pure cloud infrastructure spend as the Amazon numbers include distribution centers and Google’s probably the odd space elevator, but they do demonstrate that the three big cloud players are operating at a fundamentally different level when it comes to infrastructure.
You’d think Oracle could at least point to rapidly increasing levels of infrastructure spend as a sign it is serious. But their year-to-year capex spending is actually down:
Even if Oracle has a extremely compelling offering (a big if given how early they are on the cloud learning curve and their desire to repurpose/host their existing non-cloud technologies), they have no capacity to deliver it.
So Oracle, do us all a favor and limit your cloud pronouncements at OpenWorld to detailing your future capex budget. Spare us the rest of the marketing hyperbole, because as the last several years of Oracle’s cloud rhetoric has shown, you can’t build a cloud with words.