Oracle recently announced an update to its Autonomous Data Warehouse (ADW) service. The update positions the company to gain market share against its cloud rivals in the competitive cloud data warehouse (CDW) space. In this piece, I will detail some of these updates and opine on how they position Oracle moving forward.
The cloud data warehouse market is crowded and competitive
Before getting into Oracle’s announcement, it’s worth setting some context. As just about everybody knows, data drives business these days, and the creation, use and centralized storage and integration of data are critical for the digitally transformed organization. And clearly, data has exploded, whether we’re talking about acquisition, transformation, analysis, storage or archiving. It is fair to say that we live in a data-centric world, and data management is consuming many IT budgets.
As such, it’s not surprising that the CDW market is so competitive. Google BigQuery, Amazon Redshift, and Microsoft Synapse each have a strong following of enterprise customers. And add to this list one more player—the “cool kids” of cloud data warehouses—Snowflake. The relative newcomer boasts about 7,000 customers and a market capitalization of about $52 billion. Snowflake, like its competitors, has a big reason to try to lock in its customers for the long haul. And the longer an enterprise uses one of these CDWs, the greater the chance it will stay, thanks to this thing that CIOs know all too well: data gravity.
One of the ways to lock in customers for the long haul is through proprietary interfaces and (seemingly) feature-rich toolchains (not to mention exorbitant data egress fees). In some instances, cloud providers such as Azure will even partner with pseudo-competitors such as Databricks to enhance capabilities.
I write all of this to emphasize how challenging it can be for a competitor in the CDW space, and to set up what Oracle is doing—and why it’s kind of a stroke of genius.
What Oracle announced in the latest ADW update
Oracle has been in the CDW game since early 2018, and by this point has many enterprise customers. While the number is not public, I suspect it’s orders of magnitude more than Snowflake. Oracle’s ADW offering has been a strong player in a competitive market, attracting enterprise customers who understand the value of working with the leader in the data management space.
While the company has already had success in this area, it feels like Oracle’s latest update to ADW is focused on expanding its total addressable market (TAM) by focusing on some key principles that have informed the company’s design and development efforts:
- Play nicely with others — Build the interfaces and tools that allow for true multi-cloud capabilities, perhaps even previewing deeper multi-cloud capabilities.
- Be easy to use — Deliver tools and solutions that make ADW easier to deploy, manage and, most importantly, use.
- Be price-competitive — Lower the cost of using ADW in the real world to make ADW even more competitive with other players in this space.
Now let’s look at some of the more interesting elements of the recent update and how they map to the above three focus areas.
Support for Delta Sharing Protocol — the Delta Sharing Protocol open sourced by Databricks simplifies the process of data sharing. This REST protocol enables the sharer and recipient to be in different organizations on different clouds without replicating the data. This runs contrary to a service like Snowflake, which makes every effort possible to keep its users and data consumers confined within the Snowflake data warehouse.
Data Studio — To create more stickiness and generate more value for an organization, a product has to be both feature-rich and easy-to-use. In the case of ADW, introducing the low-code Data Studio is the answer to both. We think about the different aspects of data management—loading, transforming, analyzing and the like—the number of tasks and functions feels never-ending. Oracle has done the seemingly impossible job of dropping all of this into a single service, all “point-and-click” driven.
And while one would expect Oracle to deliver a rich set of capabilities, the “simple” part of this stickiness equation impresses me. The data in an organization is only as useful as it is accessible and analyzable. Business users and data scientists who need to gain insights from a database should be able do so without having to open a service ticket with IT and wait three days, if lucky. And Oracle did a good job of doing just this—thereby democratizing data management.
- True-multi-cloud support — Oracle seems to understand that its enterprise customers will also be AWS, Google and Azure customers. Rather than seek ways to lock customers into ADW as much as possible, the company went the other way, developing deeper integration into the other clouds. An example is Oracle’s integration with AWS Glue, which enables Oracle to retrieve data lake schema and metadata automatically. Other examples are Oracle’s ability to run direct queries against Google BigQuery or Apache Iceberg tables.
Data-driven enterprises should find significant value in Oracle’s approach to embracing multi-cloud in ADW. As you can see in the above diagram, the company has gone to great lengths—with more than 100 connectors available out of the box—to enable the least complicated access and analysis of data that resides across clouds. And it does this in a way that business users and data scientists can easily understand and use.
It seems like Oracle is setting the stage to deliver services that are harmonized with AWS and Google similar to the existing Oracle-Azure low-latency interconnect. The company’s work has already enabled considerably faster performance for some cross-cloud functions.
Lower overall costs — All of these new features come at a cost, right? Apparently not. ADW customers can now pay less for using the service through a simple storage pricing exercise. How? Oracle has cut its ADW Exadata storage prices by 75%, in line with its object storage pricing. That means high-performance storage (up to 20x faster than object storage) at a 75% discount.
This is not the same Oracle we once knew
Embracing openness, embracing multi-cloud and, lowering the cost of doing business. huh? This is not the Oracle we’ve known and loved (or loathed) in the past. As an IT executive, I used to deploy Oracle exclusively wherever I could. I selected it because I knew it had the best database management platform on the market, along with the richest tools and a true end-to-end environment. I did this even though I also knew I would pay a premium—and be locked in. But I put up with it because of the performance that Oracle could deliver.
Here’s a news flash: this isn’t that Oracle. I have mentioned this previously, but it bears repeating. This new Oracle is a cloud company that has learned some important lessons while watching companies like Microsoft transform themselves. And while the company could have taken the approach of protecting its turf, instead it is looking to expand its market presence and attract a new generation of developers and a new class of data consumers—the business analysts, data scientists and digitally-transformed organizations that are living in the multi-cloud world.
In case it’s not clear, I’m bullish on what Oracle is doing across its portfolio of products and Oracle Cloud Infrastructure (OCI). This isn’t a “fanboy” kind of admiration; instead, it’s based on my experiences as both a consumer of its technology and an analyst who has studied the company for a long time. Oracle has always been an innovation leader in the data market. And while customers may have complained about expensive licensing fees, they still signed the purchase orders because of how complete and feature-rich the company’s products were.
The company’s pivot to the cloud a few years back has met with a lot of success. And the codifying of Oracle’s most precious assets—its data management platforms and tools—is now paying dividends while driving greater adoption of OCI. Perhaps most interesting is how much the company has embraced the cloud as an operating model and delivery platform for its services. Things one would never associate with Oracle 15 years ago—openness, cost-effectiveness, ease of use—seem to now be the mantra at Redwood Shores.
As usual, we’ll check in over the next couple of quarters to see how this ADW service update is landing with customers.