With customer demand booming for Oracle cloud services and particularly for AI inferencing and training, Oracle CEO Safra Catz underscored her company’s highly differentiated capabilities by vowing that Oracle will offer customers more cloud regions than Microsoft, Google Cloud, and Amazon combined.
Catz’s forecast reveals the increasing heterogeneity on the infrastructure side of the Cloud Wars and the inevitable breakdown of the outdated and clumsy idea that “the hyperscalers” are an amorphous blob indistinguishable in capabilities, mindset, and technology.
For the past 18 months, Oracle has been making the case that here in the early days of the AI Revolution, what the business world needs is lots and lots of small and mid-sized data centers — in every country and every major city in the world, according to chairman Larry Ellison — rather than the model embraced by Microsoft, Google Cloud, and AWS of small numbers of very large data centers.
Customers benefit from this approach, says Oracle, because it gives them a wider range of choices of deployment options, including Cloud@Customer and Dedicated Cloud Regions; more flexibility in configuring sovereign clouds and data management; and more consistency in cloud services across the globe since Oracle offers all of its cloud services in all of its regions, a practice its competitors cannot always match.
Catz revealed the strategic significance Oracle places on its leadership in cloud-region presence by raising that topic early in her prepared remarks on the company’s fiscal-Q3 earnings call last week.
“Speaking of data centers, we marked a milestone this quarter as we crossed into triple digits with our 101st cloud region coming online,” Catz said.
“So now it’s just a matter of time before we have more cloud regions than all of our competitors combined, reflecting the strategic advantage of our Gen2 architecture, which offers our customers the most flexibility from a delivery standpoint.”
Catz then brought up the related issue of energy requirements for Oracle’s ambitious data-center buildout, and her description of the relentless increases in future energy capacity offers a powerful reflection of two vital elements:
- the booming customer demand that Oracle sees for its cloud-infrastructure services and technologies, and
- the prodigious expertise in physical-facility construction that this “software” company has had to amass in a very short time.
“The growth of our power capacity under contract is even higher than the growth in the number of data centers,” Catz said, “and we expect that our available power capacity will double this calendar year.
“And triple by the end of next fiscal year.”
In light of those trendlines, Catz said, Oracle is distinguishing itself from Microsoft, Google Cloud, and AWS on the strength of its proven ability to handle AI inferencing and training more rapidly and less expensively than its competitors.
“As we bring more capacity online, our revenues will clearly accelerate what we are seeing in the market, and that is that we are the destination of choice for both AI training and inferencing,” Catz said.
“This is due to the fact that our Gen 2 cloud is faster and therefore cheaper than our competitors, and also due to our ultra high-speed networking engineering that we started decades ago and that is now highly relevant for AI.”
Final Thought
It was not that long ago that more than a few “experts” derided Oracle’s plans for becoming a true competitor in cloud infrastructure for various reasons rooted in linear thinking and an insipid belief that the past dictates the future. Among them:
- Oracle is after all “just a software company” and doesn’t understand hardware;
- Oracle is a “legacy” on-prem company that does not and will never “get” the cloud;
- Oracle is “late to the cloud” and would never be able to catch AWS and Google Cloud and Microsoft; and
- Larry Ellison has finally met his match and should ride off into the sunset.
My big takeaway from all this is that for both tech vendors and their customers, all things are possible in the Cloud Wars.
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