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For the second part of our cloud service provider comparison, we’ll continue our discussion of “secondary” cloud providers with two longtime tech industry giants: IBM vs Oracle.
We always talk about the “big three” cloud providers: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). We’ve covered Azure vs AWS and Google vs AWS, and most recently, the rise of Alibaba as the next biggest cloud provider. But what about the rest? IBM and Oracle have solidified themselves in the technology world, but will their offerings bring them success in the public cloud? And if so, does one of them have a better chance?
IBM
- At the end of June 2017, IBM made waves when it outperformed Amazon in total cloud computing revenue at $15.1 billion to $14.5 billion over a year-long period
- However, Amazon is still way ahead when it comes to the IaaS market
- For 2016, Amazon had the highest IaaS revenue, followed by Microsoft, Alibaba, and Google, respectively. IBM did not make the top 5.
- Alibaba had the highest IaaS growth rate, followed by Google, Microsoft, and Amazon, respectively.
- IBM was the fourth biggest cloud provider – before Alibaba took over
- In Q1 of 2017, Synergy rankings showed that IBM has 4 percent of the public cloud market share, just behind Alibaba’s 5 percent
- AWS had 44 percent, Azure – 11 percent, and Google Cloud – 6 percent
The reality that Alibaba knocked IBM out of fourth place in the ongoing saga of the cloud wars is a bit unsettling, but remember that the enterprise cloud is still just beginning. After all, the term “cloud computing” was only coined just a few years ago, in 2006. As we look forward, IBM and Amazon just released their own television ad campaigns, and the differences in their messaging are an indication of how each provider plans to move forward.
As enterprises continue their shift to the cloud, TV ads tell us a lot about a provider’s purpose, overall message, and target audience. In the IBM ad, “The Cloud for Enterprise, Yours,” the cloud is presented not as a cloud at all, but as an entity “built for your business, designed for your data, and secure to the core.” This messaging opens an otherwise confusing, sometimes difficult to understand service for business leaders, to something tangible, something that makes sense, something that was built for their enterprise. That type of message goes a long way with people who don’t know the first thing about cloud computing.
On the other hand, Amazon’s ad targets a different audience entirely: “the builders” – developers, programmers, and architects who already have a full understanding and reliance on AWS for their building needs. In contrast to IBM, whose ad is all about how their cloud is helping businesses through the power of data and innovation, blockchain, and more, Amazon went straight for the technical experts who know exactly what they’re doing, no explanation necessary. The ad was also perfectly timed for the arrival of AWS re:Invent in Las Vegas this past week (ParkMyCloud was there as a sponsor!), gearing up their technical followers for the big event.
IBM positioned itself as a cloud provider for business leaders as the shift to the cloud only gets bigger. Amazon positioned itself as a haven for technical experts, the people writing code and continuously managing applications and other processes. It will take some time before we see the results of how this messaging plays out, but it certainly says something about who each provider wants to impress. And while pretty much everyone agrees that Amazon is currently leading the cloud, the numbers don’t lie – let’s not forget that IBM outperformed them in overall cloud revenue.
Oracle
- Oracle’s cloud business is still ramping up, particularly in terms of IaaS
- In fiscal Q1 of 2018, growth was at 51 percent, down from a 60 percent average in the last four quarters
- Q4 for fiscal 2017 was at 58 percent
- Since last quarter, shares have gone down by 10 percent
If things weren’t looking good for Oracle before, they may have just taken a turn for the worst. This past week AWS re:Invent, we witnessed CEO Andy Jassy make quite a dig at Oracle during his keynote speech. There was a cartoon involved, featuring Oracle founder Larry Ellison, and the message was clear: AWS is taking business away from Oracle.
Oracle’s success largely comes from its database business, which is still their biggest revenue producer as many companies use their databases to run critical parts of their operations. AWS decided to take them head on with a database on their own, directly targeting their enterprise customers. After AWS launched Aurora, in competition with Oracle’s SQL database, they efficiently started peeling away longtime Oracle customers. Oracle’s response? Build their own cloud, competing directly with the biggest and most successful cloud provider thus far, AWS.
But in spite of their current position, we can’t rule out Oracle just yet. For customers who still rely on Oracle’s database or other software, the cloud is a welcome offering and probably an easier option. And in an attempt to make things harder for AWS, Oracle made some changes to its licensing, and doubled the cost of using its database on AWS in hopes that customers who already use Oracle’s database will find their cloud a cheaper, more appealing option. However, this also backfired to some degree as customers using AWS cloud in conjunction with Oracle’s database did not appreciate the spike in price. Ultimately, the decision could prove itself to be more beneficial to AWS customers, prompting them to switch their database instead of their cloud provider.
And this brings us back to re:Invent, where Andy Jassy announced a new, serverless database service – Aurora Serverless. Again, this new offering is in direct competition with Oracle’s database, and once it goes live, only time will tell if Oracle can take the heat.
IBM vs Oracle: The Takeaway
IBM vs Oracle – does either of them stand a chance against the bigger, more well known cloud providers? So far, it’s looking pretty good for IBM. They have their sights set on huge success with the introduction of Watson, the AI supercomputer that generated a lot of buzz when it won Jeopardy. They’ve also taken a new approach with their TV ad campaign, setting themselves apart from Amazon with an entirely different audience, wooing business leaders as the best choice in terms of business and innovation strategy. And of course, they’ve taken the lead in cloud computing revenue, which is nothing to scoff at.
On the other hand, Oracle is struggling to find its place, and Amazon is calling them out. With the announcement of Aurora Serverless, we’ll be looking to see how this new offering impacts Oracle as it takes a direct hit to it’s flagship product – their database business. If Oracle wants to keep up and hold it’s own against other cloud providers, they might be wise to take a note from IBM and innovate with a new approach entirely.
In the ongoing battle for the ultimate cloud provider, Amazon’s lead is certainly not a guarantee. Not only are Google and Azure coming in strong, but Alibaba is well on its way, and other secondary providers like IBM and Oracle are working on innovations and improvements to secure their place in the ranks.
In the end, we always find it helpful to come back to one of our favorite Andy Jassy quotes regarding the cloud battle:
“There won’t be just one successful player. There won’t be 30 because scale really matters here in regards to cost structure, as well as the breadth of services, but there are going to be multiple successful players, and who those are I think is still to be written.”
As we continue making comparisons between cloud providers, keeping up to date with ongoing advancements and innovations behind their offerings, we welcome you to participate! Please share any thoughts or feedback in the comment section, we’d love to hear your take!
Source: B2C
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