Oracle co-founder Larry Ellison displayed some of his famous swagger following the release of the company’s earnings report on Tuesday.
Ellison, who is also Oracle’s chief technology officer, said he isn’t worried about Amazon and Microsoft’s recent attempts to lure away Oracle’s database customers. “A lot of people have come after us in databases,” Ellison told Wall Street analysts according to a report in Fortune magazine. “We’re very comfortable defending our leading position in the database market.”
That may be, but bravado can’t hide the fact that Oracle appears vulnerable in certain areas. In the company’s third quarter, sales for on-premises software decreased 11 percent from the same period last year. That category makes up 70 percent of Oracle’s total revenue. Against that backdrop, Amazon and Microsoft have little doubt that they think Oracle’s database customers are ripe for the picking.
On Tuesday, hours before Oracle’s earnings report, Amazon announced that Amazon Web Services Database Migration Service (DMS) is out of beta. Testing on the service, which is designed to make it easier to migrate large databases to AWS cloud or other databases, began in October. In just the testing phase, Amazon said it transferred 1,000 databases.
Microsoft also took a shot at Oracle last week by launching an Oracle-to-SQL Server exchange program. To promote the offering, Microsoft, took out a full-page ad in the Wall Street Journal. The ad wasn’t subtle.
“Now is the time to move your Oracle databases to SQL Server with free licenses,” read Microsoft’s ad.
Research shows that cloud computing is white hot, and the time for Amazon and Microsoft to pounce is now.
Last month, a survey by International Data Corp (IDC). revealed that 58 percent of companies are using public or private cloud for more than one or two small applications. That’s a 24-percent jump from 14 months ago. IDC says the companies are attracted to the cloud because they want to improve “resource utilization and staff productivity.”
Translation: they want to save money.
But migrating to AWS or Microsoft’s Azure clouds isn’t easy no matter what those companies say, according to Ellison. “If you want to move to an Amazon database,” Ellison said, according to Business Insider, “and they have a couple, you have to rewrite your app. That’s a huge barrier.”
For that reason and others, Ellison says Oracle still has the advantage over rivals. Not only does it have over 350,000 customers already running Oracle database, but Oracle has its own cloud. In Oracle’s “platform as a service,” category which is where cloud revenue falls, sales are up 61 percent.
So, the challenge for Amazon and Microsoft, not surprisingly, is to convince Oracle database customers that a move to AWS and Azure is painless.