​Should Amazon and Microsoft be worried? Is Oracle becoming a cloud force to be reckoned with?

“A category of developers love AWS, but enterprise developers don’t necessarily love it."

Credit: Oracle

Amazon Web Services (AWS) is a far cry away from being suited to the needs of enterprise developers, according to one of its more junior cloud competitors.

That’s the view of industry rival Oracle, in particular the tech giant’s Senior Vice President of Cloud Development, Peter Magnusson, who believes AWS offerings fail to define the enterprise space.

So much so that Magnusson - who previously held top engineering roles at both Google and Snapchat - believes Oracle’s biggest competitor lies in Redmond, in the form of Microsoft and its Azure offering.

But as reported by CIO six months ago, AWS continues to be “800 lbs. gorilla in the IaaS market”, boasting more than 10 times more cloud IaaS compute capacity in use than the aggregate total of the other 14 providers Gartner studied - including Microsoft and Google.

Yet when quizzed by Fortune regarding the state of the market at Oracle CloudWorld event earlier this month, Magnusson claimed that big businesses needed more than AWS.

“A category of developers love AWS, but enterprise developers don’t necessarily love it,” he told Fortune.

Magnusson’s comments follow Oracle’s plans to hit the cloud space hard in 2016, as the company reaches critical mass with its Software-as-a-Service business.

In truth, the crowding of the cloud platform and services market reflects the fact that cloud deployment is moving to the front burner for most organisations.

As such, most analyst firms are in agreement that anywhere between 30-50 percent of enterprises will increase cloud spend in 2016.

“Against that backdrop,” adds Tony Baer, Research Analyst, Ovum, “Oracle’s cloud business has displayed important strength, especially with its software- and data-as-a-service (SaaS and DaaS) businesses that have grown in less than a couple of years from having a handful of clients to several thousand clients.

“More to the point, Oracle’s functional strengths in having a mix of SaaS, platform-as-a-service (PaaS), and DaaS businesses are distinguishing it from better known players like Amazon and Microsoft, and from rivals such as Salesforce.com and SAP, whose mix of cloud offerings is more similar.”

For Baer, the strength of the Oracle Public Cloud is that the “depth and breadth” of its enterprise resource planning (ERP) and customer relationship management (CRM) applications are in the same league as SAP, but go beyond SAP with a PaaS offering built around its extensive middleware portfolio, and a recently introduced DaaS offering that provides personalised marketing data.

“The combination of enterprise applications and middleware are what differentiate the Oracle Public Cloud from each of its rivals,” Baer adds.

“That differentiation would be nothing more than curiosity if the offerings have scant market presence.”

Crucially, Baer believes that is where Oracle’s recent growth becomes relevant; from a standing start a couple years ago, the SaaS offerings have grown rapidly.

“Also, much of the business is from small-to-midsize enterprises that weren’t part of the traditional Oracle customer base; in other words, much of the business is greenfield,” he adds.

Ironically, Baer thinks Oracle’s challenge may be the pace at which its current enterprise applications installed base is ready to migrate to cloud.

Consequently, the key will be with application upgrades.

“Here, the advantages of the cloud are more than obvious: the vendor does it transparently and the upgrades are more frequent, which, if you eliminate the headaches of upgrade, should be a good thing,” Baer explains.

“The problem with upgrades is dealing with customisations; with Oracle’s cloud applications, it is taking the classic design pattern of modular architecture to modern practice by abstracting changes through application platform interfaces (APIs), which is now termed as “personalisation.”

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