The cost of cloud computing is coming down, but it remains an expensive proposition. Oracle Corp. thinks it can build a better model, starting with an effort to establish services-as-a-service for customers who want to run Oracle software on-premises.
Many vendors, including Oracle and Microsoft Corp., already offer SaaS — usually for their software and tools — in one form or another. However, SaaS generally requires a monthly fee or cloud-hosting charge from the customer. Oracle is offering managed services that, in effect, are a mix of SaaS and on-premises software.
Why? The company argues that the performance and reliability of Oracle SaaS solutions are usually unmatched, but that as end users and application developers migrate to cloud platforms, their perception of these solutions will change.
“We look at the cloud world,” said Christopher Henzel, an Oracle senior vice president, in an interview with CNBC. “The things that they (consumers and developers) pay for every month are, ‘Why do I need to pay someone else [for] one more thing to do?’”
Oracle is saying that to make it easier to move from the cloud to on-premises, the best solution is to pair its SaaS offerings with “portability” options — things like backup options for cloud-stored files or more comprehensive disaster recovery features.
The company believes this will allow it to provide customers with a degree of pure compliance that would be tough to match if they were selling cloud solutions across all vendors’ platforms — for example, both customers and vendors could remain one and the same.
“This is nothing new,” said Rob Enderle, principal analyst at the Enderle Group. “We’ve been doing this since 2000” when some of this concept was first used.
“We basically see the idea of on-premises;, it’s something we’ve always thought of as being a nontrivial cost, and so whenever an enterprise buys into an on-premises database or on-premises application, it’s on the assumption that if you want to move it later, you’ll incur a price for moving it,” he explained.
However, he added, Oracle’s approach to improving performance and reliability should allow it to secure customers for some time to come. “Most people have been spending three to five years to make their cloud services at least the same as what you get from on-premises,” he said.
“What I think Oracle has done is in fact set out to eliminate that static view and now you have [Oracle] trying to be the in-between between the cloud and on-premises.”