Oracle unveils "on premise IaaS"

News Jane McCallion Jan 23, 2013
Cloud  connected to server
Cloud connected to server

Tech titan claims new service is one of a kind, but some industry watchers remain sceptical

Oracle claims its new private cloud offering could save companies up to 20 per cent on the cost of purchasing the same level of infrastructure and service.

Oracle IaaS is being billed as an on-premise cloud solution. Oracle Engineered Systems, including Exadata, Exalogic, Exalytics and SPARC SuperCluster, are installed in the customer’s datacentre on a minimum three-year contract, and remain the property of Oracle during that time.

“Oracle is the only company that can help you build a first-class infrastructure cloud behind your firewall that is pure [operational expenditure], easier to use, set up and maintain,” said Mark Hurd, president of Oracle.

The contract includes support from Oracle and capacity on demand [CoD] pricing.

Juan Loaiza, senior vice president of systems technology at Oracle, said the product keeps CPU capacity at 75 per cent most of the time, but can be increased to 100 per cent as needed.

“When a customer deploys a purchased system, he has to size that system for the maximum possible workload...and add a margin of safety on top of that. The result is that [they are paying for] peak processing capacity that will rarely or perhaps never be used,” Loaiza said.

He gave the example of a retailer, who will only use peak capacity during the sales. With Oracle IaaS, they only need pay for 100 per cent capacity during the months that they need it, and remain at 75 per cent capacity when they do not, Loaiza added.

The company claims that over a three-year period, with both the hardware and Platinum support services package taken into account, customers will save approximately 20 per cent of what they would spend on purchasing a system. However it admitted the cost savings are largely cancelled out after five years.

Martin Hingley, CEO of analyst ITCandor, seemed unconvinced by the proposition, and poured scorn on the touted cost benefits.

“This looks more like rental or leasing, but with the advantage of CoD,” Hingley said.

“Oracle makes most of its money through software, so there is little to be saved as long as the companies don't have many excess licenses already.

“I don't think there will be any savings on services - a bug bear for many Orcale/Sun customers – as it is compulsory to take PlatinumPlus and Platinum for these systems,” he added.