After stunning the world over the past two years by hammering his way into the seemingly impenetrable Hyperscalers Club, and then shocking the nonbelievers last quarter with RPO growth of 44% to $98 billion, Larry Ellison is now on the verge of rocking the cloud industry once more by promising that every Oracle customer can have the full Oracle Cloud in that customer’s data center.
Is that the roadmap to the future? Or is it crazy?
Before you answer that, consider three key points:
- Ellison has always — always — chosen the road less traveled and has resolutely defied conventional wisdom and the traditional way of doing things. So the fact that no one else is talking about this should not be a surprise–and Ellison’s track record shows that his contrarian (crazy??) ideas have almost always been right.
- Ellison has not only blasted his way into the Hyperscalers Club, but he’s also established Oracle as the Kool Kid in the group, with rivals Microsoft and Google Cloud agreeing to form unprecedented multicloud partnerships with Oracle to drive better business outcomes for mutual customers. And, I would not be shocked if we find out this week at Oracle CloudWorld that Amazon has agreed to a similar deal with Oracle.
- The outlandish financial results that Oracle Cloud Infrastructure has been racking up — the 44% RPO growth to $98 billion, plus Ellison’s projection that OCI revenue growth will exceed 50% for at least the next few years — are more than anything an unimpeachable indication that customers are buying what Ellison and Oracle are selling. And remember — those customers have plenty of other choices, particularly in the form of three of the world’s wealthiest and most-powerful corporations: Microsoft, Google, and Amazon.
So — still think Ellison’s vision sounds crazy? If so, perhaps Ellison in his own words can convince you. If not, well, good luck.
During Oracle’s fiscal-Q4 earnings call three months ago, a financial analyst asked Ellison this question: “Can you talk about the innovation roadmap for OCI and your AI services in particular and why we should expect Oracle to keep on winning not just today but over the next several years to come in this market?”
Ellison gave a fairly long answer, but here’s the excerpt that offered a glimpse into his chicken-in-every-pot vision for the future of the cloud:
“We’ve talked for a while about our ability to build very small data centers, one you could put in a ship or a submarine or how a full Oracle Cloud we will soon have in six standard half-racks to go into a conventional data center so virtually any one of our customers could choose to have the full Oracle Cloud in their data center, with every service in the Cloud,” Ellison said (emphasis added).
And later in the call, Ellison reiterated his belief that in the not-too-distant future, businesses will have complete clouds in their own facilities:
“Every medium-size on-premise customer that Oracle has could have a private full Oracle Cloud where they have no neighbors — they are the only user of that Oracle Cloud — and we could install that in their existing data center. Nobody else can do that.”
But while those excerpts might lead you to believe that Ellison thinks the future of cloud data centers is strictly Small Is Beautiful and Smaller Is Beautifuller, Ellison also described how Oracle is racing to build the world’s largest data centers — or, what he called “AI data centers.” And this next extended excerpt is from my June 17 analysis headlined “Larry Ellison’s AI Vision: An Oracle Cloud Data Center for Every Customer (and Submarines)“:
“So we talk about the fact that we can start very small and that’s a huge difference between us and our competitors,” Ellison said. “What we haven’t talked so much about is we’re also building the largest data centers in the world…. We’re building a 70-megawatt data center where we can park eight Boeing 747s [each 232 feet long] nose-to-tail in this huge AI-training data center.”
Not content with a 70-megawatt that he said would be the world’s largest “AI data center,” Ellison tripled down on that vision by declaring that “We’re also building a 200-megawatt datacenter…. We’re now bringing 200-megawatt data centers online, so we are literally building the smallest, most portable, most affordable cloud data centers all the way up to 200-megawatt data centers.”
But the irrepressible Ellison was only getting warmed up.
“This AI race is going to go on for a long time. It’s not a matter of just simply getting ahead in AI, but you also have to keep your models current, and that’s going to take larger and larger data centers, and some of the data centers we have that we’re planning are actually even bigger. Some are getting very close to — dare I say it — a gigawatt, which is enough for a pretty good-sized city or for one enormous AI-training cloud data center,” Ellison said.
“No one else can span this range.”
Ask Cloud Wars AI Agent about this analysis
Final Thought
Here’s Ellison on his vision for Oracle’s go-small approach: “Nobody else can do that.”
Here’s Ellison on Oracle’s go-very-large approach: “No one else can span this range.”
That striving for massive competitive differentiation oriented around what customers will need in the future is precisely why I believe that this week at CloudWorld, Ellison’s keynote will center on this new vision of the cloud wherein customers will no longer need to be tethered to hyperscaler data centers, but will instead be able to be their own cloud provider, with the technology supplied by Oracle.
Because Ellison has always been motivated to do what others believe is impossible, and to deliver to customers what no one else can offer.
And, just as a side note, Larry Ellison turned 80 years young last month — clearly, he’s still crazy after all these years.
The AI Ecosystem Q2 2024 Report compiles the innovations, funding, and products highlighted in AI Ecosystem Reports from the second quarter of 2024. Download now for perspectives on the companies, innovations, and solutions shaping the future of AI.
