Larry Ellison: Oracle's going to WAR against Amazon cloud prices

Oracle technology chief Larry Ellison is embarking on a journey Microsoft couldn’t complete: beating Amazon’s cloud services on price.

Oracle’s former CEO is reported to have kicked off a price war by committing his database firm to undercutting AWS on storage.

“We are prepared to compete with Amazon.com on price,” Ellison said the once arch-cloud skeptic, on the occasion of the expansion of Oracle cloud storage services.

“This is a really big deal,” he added.

Ellison’s commitment came as he expanded the Oracle Cloud Platform, with a hefty slant geared towards data. Oracle’s database cloud now includes Archive Storage Cloud Service, which Oracle boasted provides long-term storage “at the lowest price in the industry.”

“Our new archive storage service goes head-to-head with Amazon Glacier and it’s one tenth of their price,” according to Ellison.

Other features added to Oracle Cloud Platform are its database machine Exadata available as a service, Big Data Cloud and Big Data SQL Cloud Service, Oracle Integration Cloud Service Mobile Cloud Service and Process Cloud Service.

AWS's Glacier storage starts at $0.0100 per GB. Then you add to this uploads and transfers to different AWS regions and out of AWS to the “internet”. Upload and retrieval requests start at $0.050 per 1,000 requests and transfers between regions at $0.020 per GB.

Oracle charges for storage plus data transfer: $0.026 a month per GB for the first TB and free for the first GB per month, going up to $0.120 per GB a month.

The idea, presumably, is to add some low-grade, market-expansion rocket fuel to the Oracle cloud and Oracle’s business.

Revenue for the database giant for Q4 saw a year-on-year decline, as did income: the only growth for a firm making and selling software and servers was on cloud. Software accounts for the lion’s share of Oracle’s business, making up 73.1 per cent of sales.

Taking on AWS on price is a rocky proposition.

Microsoft has tried with Azure to undercut AWS. It failed because Amazon cut AWS prices 48 times during the eight years of its cloud service’s life. Redmond has been forced to resort to offering packages of offers instead.

As I wrote here, it’s been like BA trying to beat EasyJet on ticket prices. And Oracle is in the same blue-chip class as Microsoft.

For all that, AWS remains, according to Gartner and industry mindset, the cloud leader determined by volume of data, number of customers, features and momentum. ®

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