Skip to main content

Oracle takes on Amazon with new cloud offering

Database management firm Oracle has said that its new cloud service will match the price being offered by Amazon Web Services (AWS).

While Oracle traditionally builds software and hardware to help companies manage their data in-house, it confirmed the new competitive pricing strategy for its cloud offering at its OpenWorld conference.

Read more: Larry Ellison steps down as Oracle CEO, replaced by Mark Hurd and Safra Catz (opens in new tab)

Chairman Larry Ellison said Oracle's cloud platform will "have the same pricing as Amazon or any other infrastructure provider."

Ellison has also announced that he would be leaving the day-to-day running of the company as it transitions to more of a cloud-focus. He confirmed the new platform would include analytics, mobile, identity and social features.

The launch of its own cloud software intensifies competition between Oracle and Amazon, who have seen their own Web Services cloud platform become popular with a number of businesses. Oracle's switch to cloud services could also see the business improve efficiencies by running everything itself.

While the market's move towards cloud products has hit Oracle's finances, Ellison's successor as CEO, Safra Catz, believes the company is now in a good position to benefit from the migration.

"As the movement to the cloud grows, we expect this transition will affect our revenue to the positive," she said. "These customers will essentially replace their software-support payments with a cloud subscription, which will mean substantially more revenue to Oracle."

Brent Thill, an industry analyst at UBS, added that Oracle still needs to reassure investors of its new business model.

"The new software license has been stunted because it is going to recurring and to cloud. Oracle needs to get in front of investors and say if the majority of our business went to subscription, here's what it would look like and here's the margin structure."

Read more: KPMG's Oracle collaboration brings finance and tax services to the cloud (opens in new tab)

Alongside its new cloud platform, Oracle also introduced hardware products for flash storage and data recovery and its M7 microprocessor to speed up database software.

Barclay has been writing about technology for a decade, starting out as a freelancer with IT Pro Portal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.