Oracle Cloud Infrastructure Is Growing Up And Gaining Customers

By Patrick Moorhead - January 16, 2021

When you think of cloud providers, Oracle is probably not the first company that comes to mind. I must admit I was a skeptic of Oracle Cloud V1.0, but with Oracle's second-generation cloud, announced at Oracle OpenWorld back in 2018, I see many improvements that deserve a closer look. 

Oracle has been on a bit of a roll as of late. The company that I thought was cloud-challenged is now winning cloud deals left and right. I believe its Dedicated Region Cloud@Customer (here) is the easiest hybrid cloud solution to understand and it won business from Zoom and 8x8. 

Oracle Cloud Infrastructure is an entirely new infrastructure developed from the ground up with no resemblance to its predecessor. The design goals were better performance, pricing, and—above all else—security. I believe Oracle Cloud V2 is a significant improvement, more competitive, and has netted Oracle, several high-profile customers like McDonald’s, Nissan and Zoom.


Hybrid cloud  

For many customers, the public cloud is not a panacea. The fact remains that some customers, for one reason or another, for example, heavily regulated industries such as financial services and insurance companies, have data that cannot move to the public cloud. Others need the lower latency capabilities. For these folks, the hybrid cloud option with full public cloud capability in the data center is most appealing.

Oracle addresses this need with what it calls Oracle Dedicated Region Cloud@Customer, which essentially enables customers to replace on-premises data centers with a cloud deployment model. 

Oracle is delivering the public cloud experience into customer data centers with no change in pricing or capabilities. Dedicated Region Cloud@Customer includes full management capabilities and access to new features and functions when available in Oracle's public cloud. It provides strong customer data isolation, including all API operations, which remain local to customer data centers and I believe provide the highest security levels. 

Additionally, Oracle Dedicated Region Cloud@Customer is certified to run Oracle Cloud applications seamlessly, including Oracle Fusion Cloud Applications (Cloud ERP, Cloud HCM, Cloud SCM, and Cloud CX), making it a completely integrated cloud experience on-premises. 

For those looking for public cloud service capability but with the compliance, latency, and co-location benefits of on-premises, this should be considered. 

One such customer is Nomura Research Institute (NRI), Ltd., the largest consulting firm and IT solutions provider in Japan. With Oracle Dedicated Region Cloud@Customer, Nomura said on-premises costs were significantly reduced, allowing them to invest more in digital transformation projects. SOC2 reports based on Japanese security standards in financial industries, required on-premises while accessing the broader cloud services and tools provided by Oracle.

Security first approach

No discussion of cloud infrastructure can happen without mentioning security and many CIOs I talk to now talk about cloud security being stronger than their own. This has a lot to do with nation-state budgets used by bad actors and the use of AI and machine learning. 

Oracle's second-generation public cloud has security as a critical foundation. I believe Oracle Cloud is distinguished for bedrock design primitives, including high customer isolation, clean host hardware, default encryption, no downtime patching, and sophisticated data protection.

Complexity is the cause of most security issues in the cloud leading to misconfigured resources and insecure activity presenting two distinct attack surfaces. Oracle has come up with two new service offerings Oracle Maximum Security Zones and Oracle Cloud Guard, which work together to reduce the cloud security risk, all at no additional cost.

Oracle Maximum Security Zones allows customers to automatically set up and enforce security policies in designated cloud compartments requiring a strict security posture for the most sensitive data. Using Oracle's best security practices and implementing them from the start removes the chance of configuration drift or someone violating them later. 

When you create and update resources in a security zone, Oracle Cloud Infrastructure validates these operations against the list of policies defined in the security zone recipe. 

For example, a security zone policy forbids the creation of public buckets in Object Storage. If you try to create a public bucket in a security zone with this policy or attempt to modify an existing storage bucket and make it public, you receive an error message. Similarly, customers can't move a current resource from a standard compartment to a security zone unless all policies are validated.

There will always be lower security areas that need to interface with higher security areas. To reduce risk in these interfaces, Oracle Cloud Guard continuously monitors configurations and activities to identify threats and automatically remediates them. 

Oracle Cloud Guard works to analyze data automatically, detect threats and misconfigurations automatically, hunt down and kill those security threats without requiring human oversight. Oracle Cloud Guard continuously collects data from every part of the infrastructure and application stack, including audit logs, Oracle Data SafeOracle OS Management Service, and third-party products. Oracle Cloud Guard proactively detects and stops anomalous activity it identifies, shutting down a malicious instance automatically, and proactively revoking user permissions when it detects abnormal user behavior. 

Oracle Cloud Guard provides security administrators the cloud detect-and-response framework needed to lower the time to respond to security misconfigurations and scale-out security operations centers.


Oracle Cloud Infrastructure was rebuilt from the ground up, with security as a top priority. The opportunity to improve the cloud migration process and provide much improved performance and pricing to customers were also considerations.

Oracle claims the best price/performance available in the market today. Unlike some other clouds, Oracle provides SLA-backed performance for storage and networks and doesn’t mark up the price for it. It also offers a single price globally for almost all products. The combination results in dramatically lower pricing for nearly any workload versus Gen1. 

Oracle’s hardware manufacturing experience, and alliances with top-tier semiconductor suppliers such as Intel, NVIDIA, Ampere, and AMD are pivotal in enabling price/performance comparisons versus rivals such as Amazon Web Services (AWS) and Microsoft Azure.

I haven’t done a comparison of every instance and done a price compare, but I recommend you check it out yourself and also hear from Oracle’s customers, like 8x8, Naveego and Phenix, about their cost savings. 

I believe one of the most critical questions to ask any IaaS vendor is if they can keep decreasing costs over time. 

Oracle Autonomous Database 

Perhaps one of the most intriguing features of the Oracle Cloud is how the traditional cloud boundaries are becoming blurred with the fusion of Oracle Autonomous Database, which provisions databases, configures and tunes for specific workloads, and scales compute resources when needed, automatically.

Oracle is positioning the Autonomous Database, not as part of the cloud's PaaS layer, but as part of Oracle Cloud Infrastructure. I find this fascinating and smart.

Oracle is gaining customers – JASCI Software, OUTFRONT Media and TaylorMade Golf, to name a few – attracted by the new Autonomous Database product, a natural follow-on for hundreds of thousands of businesses currently running traditional Oracle databases. As you examine the features of the second-generation cloud infrastructure with the cloud-native Autonomous Database, it is hard to separate where the database part ends, and the infrastructure part begins. 

One unique, differentiated example is the Autonomous Database is both serverless and elastic. When an application is not running on the Oracle Cloud, you don't pay for any CPUs—you've got no CPUs dedicated to you and not paying for servers. Additionally, it is instantaneously elastic. If you suddenly need to go from two servers or two cores to 20 cores, that is instantaneous while the database is still running. And then, when you no longer need the 20 cores, it automatically reverts to the two. I think this is unique.

Wrapping up

Five years ago, Amazon AWS was the only viable hyper-scale cloud provider. Azure was ramping up and Google was just getting started and IBM was rethinking SoftLayer; and I did not think Oracle was a serious player. 

All the vendors have made tremendous progress to the point that customers have many viable alternatives, which can only be a good thing as competition drives innovation and lower costs. 

I believe Oracle has come a long way since Cloud V1.0, and the product is better than the market perception right now. You heard it here first. Over the next 12 to 18 months, the story will keep getting told, and I believe you will see more customers choosing Oracle, particularly those with an Oracle database.

Note: Moor Insights & Strategy writers and editors may have contributed to this article. 

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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.