Oracle and Cloud Computing: Database Helps, But Challenges Remain

In part three of a series on Oracle's position in the cloud computing market, we take a look at how the vendor's database will affect its efforts. Part one, "Oracle Embraces Cloud Computing, the New Consumption Model," examined the evolution of the company's stance on the cloud. Part two, "Oracle Positioned to Succeed in the Cloud Computing Market," explored how the vendor's hardware and software offerings influence its cloud computing push.

Hockey and cloud computing may not seem an obvious pairing, but Brian Babineau, VP of research and analyst services at Enterprise Strategy Group, is able to tie the two together. The company "knows where the puck is going," , according to Babineau.

"One thing people forget is Oracle continues to make efforts to make its database available and accessible to the masses in any consumption model they want," he says. "That drives more SaaS applications built on Oracle, whether Oracle builds them themselves or someone else does it. That means more custom apps, more integration work through the Oracle database platform."

He says this gives Oracle an advantage.

"Because they own that database and they know how to make it run and develop for it optimally, they can start putting applications at integration points that others just don't have the luxury of," he says. "Salesforce doesn't own database technology, for instance--they have to go get it from somewhere else. IBM is probably the other vendor that could claim that, yet they don't own business applications. As far as being able to enhance that database and prepare for cloud types of development and for apps to be delivered as software-as-a-service, the underlying foundational architecture has a distinct advantage."

One significant challenge Oracle has to overcome, though, is convincing new customers it can deliver the application functionality it's known for via the SaaS model without dampening the user experience. Nobody wants to adopt cloud computing if it means giving up functionality, Babineau explains, and no one wants to run apps if it gets exponentially expensive.

"Oracle's challenge is to communicate to customers that it can give these applications via the cloud without sacrificing any feature functionalities or user experience. That's the hurdle that comes next."

In general, it's still quite early to call, cautions Charles King, principal analyst at Pund-IT.

"There was one Oracle executive that was quoted as saying that while the company is coming into the game sort of late, that we're only in the third inning," he remarks. "I agree--this is still very much the early days of cloud services market development. The fact is, the cloud market, if not in an emerging state, is certainly in a state where the vast majority of growth is ahead of us."

From a strategic standpoint, he adds, Oracle is positioning cloud services to initially appeal to its customer base, while at the same time attempting to undercut competitors.

"Given its solution stack and its overall success in the marketplace, Oracle should be pretty well positioned to succeed here, particularly among its existing customer base," he says. "Whether or not they can really move further into the mainstream market is a question to me."

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