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Why Oracle Thinks Autonomous IT Can Ultimately Win the Cloud War

Paul Way
Senior Principle Marketing Director, Cloud Platform

Cloud providers today spend a lot of time rattling off key differentiators for their platforms, each jostling to sway buyers in a market that experts believe will reach $266 billion in revenue by 2021 (IDC, Worldwide Semiannual Public Cloud Services Spending Guide, July 2017).

For the most part, cloud providers frequently tout performance and cost advantages—certainly two top-of-mind factors in the decision-making process for most buyers. Unfortunately, providers have now flooded the market with a dizzying stream of benchmarks and comparisons, burying decision makers with piles of often conflicting and confusing apples-to-oranges data that provides no clear picture of just how the various platforms actually stack up.

More recently, discussions around differentiation have shifted, with providers hyping their talents in a spate of new, emerging cloud technologies—such as artificial intelligence and machine learning—that some claim could fundamentally alter how companies interact with technology, resulting in lower costs, productivity increases, and tighter security. Early reviews, however, suggest that many providers haven’t yet developed the expertise or the vision to deliver any tangible, meaningful results.

Off in Redwood City, CA, however, Larry Ellison, Oracle executive chairman, CTO, and one of Silicon Valley’s first and arguably most enduring visionaries, is methodically building a new conversation around what his company sees as perhaps the most important development in cloud computing today—autonomous technology. While the concept incorporates each of the aforementioned differentiators (speed, cost, emerging technologies), Ellison sees the concept of autonomy as much more than the sum of those parts. For Oracle, it represents the merging of several critical cloud advancements into an entirely new level of efficiency that finally attaches tangible—perhaps revolutionary—definition to the oft-used but mostly misunderstood notion of “digital transformation.”

Defining Autonomy

Similar to the concept of the autonomous car, Oracle believes big portions of the IT organization will ultimately run themselves. Unlike the automotive industry, though, where manufacturers like Tesla envision building cars without steering wheels, IT organizations will likely never operate completely on their own. Recent developments in its product portfolio reveal that, like autonomous vehicles, Oracle ultimately imagines several levels of autonomy for IT, similar to the National Highway Traffic Safety Administration's (NHTSA) levels of autonomous driving.

How Oracle Views Autonomy

For Oracle, the autonomous enterprise goes beyond automation, in which machines respond to an action with an automated reaction. In an automated enterprise, certain tasks become automated, but the full process still requires humans to complete it. Think of cars that can automatically change lanes but still require drivers to get to the final destination. Artificial intelligence and machine learning often make automated tasks possible.

Combining multiple automated tasks can lead to semi-autonomous technology, but true autonomy occurs when humans become removed from the process. That’s exactly where Ellison’s grand vision is headed—in a way only his company can execute. Oracle has arguably the widest and deepest portfolio of products across SaaS, PaaS, and IaaS, and it’s now beginning to embed AI and machine learning throughout. This competitive advantage allows Oracle to extend automation across more and more functions and technologies throughout the enterprise, resulting in semi-autonomous—and now almost completely autonomous—products and processes that require little or no human intervention.                 

Amid a backdrop of increasing security breaches, numerous high-profile outages, and the subsequent damages to both revenue and brand reputation (Hi, Equifax!), Oracle’s autonomous vision couldn’t come to fruition at a more opportune moment. For Oracle, this emerging focus on autonomous products and the autonomous enterprise isn’t a marketing campaign. In fact, in many ways, it’s the payoff on a bet the company began placing a decade ago and that ultimately pulls together many of the pieces it’s quietly built (and bought) in recent years to make it a serious player in the cloud space.

Building the Pieces

While some providers grabbed early headlines by launching cloud infrastructure businesses, largely around compute and storage, Oracle quietly began its cloud journey a decade ago by rewriting its entire on-premises software portfolio for the cloud a decade ago. It was a significant, albeit often overlooked, strategic move for Oracle, considering that Ellison has insisted for years that the company that rules the SaaS market (and particularly ERP) will ultimately win the battle for cloud supremacy. Oracle hammered that point home with several important acquisitions in the space (Siebel, PeopleSoft, and, more recently, NetSuite), and now owns leadership positions in a wide range of SaaS categories.

Ellison quickly moved to replicate his SaaS success in the emerging market for PaaS products, including cloud databases, the category that launched his company 40 years ago and that Oracle continues to dominate in overwhelming fashion. PaaS is critical as the cloud market unfolds, with many analysts noting the category stands to see the most significant increase in spending in all of cloud in the coming years. For its part, Oracle has established beachheads in several other key PaaS markets beyond database, including analytics, integration, mobility, security, and systems management. More recently, at OpenWorld 2017, the company launched its second-generation IaaS portfolio with cost and speed comparisons that shocked both audiences and competitors.

From Pieces to a Vision

The slow, methodical burn of Ellison’s strategy was initially viewed by some as an unwillingness to commit to the cloud. But with each innovation the company has unveiled recently, it’s increasingly apparent that Ellison’s insistence that he’d been following a carefully plotted strategy all along (as he’s so masterfully done throughout his career) rings true after all. The strategy has put Oracle in an enviable competitive position. Providers that began offering low-cost infrastructure in the cloud, such as AWS, initially grabbed headlines and market share, but they’ve largely ignored other key layers of the full cloud stack, notably SaaS and PaaS. In much the same way, providers who similarly made waves by launching SaaS offerings (Salesforce, Workday) now find themselves out of the conversation for PaaS and IaaS. Meanwhile, Ellison and Oracle managed to build dominant positions and deep technical expertise throughout SaaS, PaaS, and IaaS, with integrations between layers that deliver cost and efficiency benefits their competitors simply can’t. It’s hardly surprising then that, while Oracle currently holds relatively modest overall cloud market share, its competitors have clearly taken notice by increasing their attacks in an attempt to quell the threat.                       

With its new focus on autonomy, Oracle appears to be flexing its muscles even further by combining its unique competitive differentiators with what’s become one of the company’s most important initiatives in years—establishing its dominance in a portfolio of emerging technologies that includes machine learning, IoT, blockchain, human interface, and more. Many believe these new technologies could completely redesign how people work and live. Ellison and company have embedded not only automation into each layer but have now begun delivering levels of autonomy within their products that other providers are in no position to match.

Oracle’s push to autonomy began in late 2016 when the company announced it was developing “adaptive intelligence” applications. The first adaptive intelligence app, for CX, launched in 2017, allowing companies to combine their own data with Oracle’s extensive third-party Data Cloud (itself a big competitive differentiator) then apply the company’s decision science and machine learning technologies to optimize outcomes. Later that year, Oracle launched similar adaptive intelligence capabilities for ERP, HCM, and SCM apps.

The Autonomous Database

More recently, though, Oracle kicked things into high gear when it introduced an entirely new category of database technology—the product that launched the company 40 years ago and continues to have dominant market share across the globe. The new database category, dubbed autonomous databases, was announced in late 2017 with the first product launch (an autonomous data warehouse cloud service) rolling out in the spring of 2018, offering strong indications of just how dramatically Oracle hopes to redefine the relationship between companies and their systems.

Oracle’s autonomous data warehouse cloud represents a radical shift in how cloud databases are run and maintained—not to mention how much they cost. For all intents and purposes, the database runs itself, automatically and continuously patching, tuning, backing up, and upgrading on its own with virtually no downtime (Oracle says downtime will be less than 2.5 minutes per month). And with little human intervention, the product virtually eliminates human error, with dramatic implications for not only security breaches and outages, but costs as well. At Oracle’s last OpenWorld conference in October 2017, Ellison ran live workloads comparing Oracle’s database on its own cloud and AWS, versus AWS databases on its own cloud. Oracle’s speed and cost advantage proved so dramatic that the company now guarantees customers running its database on Oracle Cloud will halve their current AWS bills.

Beyond the Database

But Oracle’s plans go much further. Oracle views autonomy as a means of delivering on what it believes will be the ultimate competitive advantage. Steve Daheb, senior vice president of Oracle’s Cloud Business Group, says: “Keep in mind that developments in cloud technologies are still in the early stages. The majority of enterprise workloads aren’t yet in the public cloud. To this point, companies have largely adopted cloud as a way to reduce costs, which is always important. But as the market develops, we don’t think buying decisions will come down to just that. Very quickly, it’ll be a matter of trust. Who can I trust to support my whole environment, not just their own apps or infrastructure? Who can I trust to make these pieces interact seamlessly? Who’s going to keep us secure? Autonomous technology does all those things and more.” Daheb added the stakes couldn’t be higher: “If you get that decision wrong, you could be bankrupt. It’s that serious.” In the near term, Oracle has announced plans to launch other autonomous services, including Autonomous Database Express Cloud Service and Autonomous NoSQL Database Cloud Service.

Building the kind of autonomy Oracle envisions isn’t simple. It requires a skillset, a level of expertise, and a vision that few—if any—cloud providers have. Oracle’s competitors can certainly build automation into their products—and many already do. But with glaring gaps in their cloud portfolios, they can’t build—and likely can’t execute—a vision as grand as Oracle’s, where automation fuels autonomy across multiple integrated layers throughout a company’s IT operations. At a company the size of Oracle, pulling off the kind of long-game strategy required to get to this stage may well end up being one of the company’s most remarkable achievements. Like chess moves, Oracle’s pieces have come together to suggest an ambitious blueprint for how the company can lead a new era of cloud computing.

Just as Larry Ellison planned all along.

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