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Deal to move major Oracle Database and middleware apps to Verizon cloud could be a sign of bigger things to come.

Verizon Scores Oracle Cloud Breakthrough

Carol Wilson
1/10/2014
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Verizon Enterprise Solutions today announced what appears to be something of a cloud breakthrough -- an agreement with Oracle to allow its Oracle Database and Oracle Fusion Middleware to be distributed via the Verizon cloud platform, on a pay-by-the-hour basis. (See Verizon Delivers Oracle Apps on Demand .)

The deal is significant on multiple fronts. It represents the first major move by Oracle Corp. (Nasdaq: ORCL), a key provider of enterprise apps, to engage in distribution via a cloud service provider, rather than via its more typical software licensing arrangement. It's also a major coup for Verizon Enterprise Solutions in its efforts to attract major business apps to its new cloud platform. (See Verizon: Major Apps Move Cloud-ward in 2014 and Why Verizon Needed a Cloud Reboot.)

"This is a really big deal," says Melanie Posey, vice president of the Hosting and Managed Network Services program at IDC . "It is the most comprehensive set of Oracle software licensed to a cloud provider, and while that is not to say this is exclusive to Verizon, Oracle has chosen Verizon as its first partner," she notes.

Posey believes Oracle's move follows Verizon's announcement last October of a new cloud platform specifically designed to support enterprise apps.

Amy DiCarlo, principal analyst, Managed IT Services, at Current Analysis , sees the Verizon-Oracle deal as a potential roadmap for how other large enterprise apps move into the cloud, because of the flexibility built into the deal. According to Verizon, Oracle customers can bring their existing Oracle licenses to the Verizon platform or purchase Verizon cloud services that already include Oracle licenses. Customers of Verizon's eCloud and Managed Hosting services can also use the Oracle software on a per-hour basis, without buying Oracle licenses.

"It's a very practical approach," DiCarlo notes. "Companies like Oracle have had a lot of trepidation about moving to the cloud, but this agreement lets them do it on physical servers via managed hosting, as well as by the Terremark cloud and the newer Verizon Cloud. It's a good bridge for the Oracle Database and a good way for organizations to start slowly, not even virtualizing things right way if they don't want to."

Choice, flexibility, and cost savings are the primary advantages to enterprises considering moving these two Oracle apps to a cloud approach, which lets them use what they want and pay for what they use, notes Posey. But some customers -- either those needing more customized deployment or those using Oracle apps in more testing and development approaches -- would likely still buy directly from Oracle in the traditional software-licensing mode or through Oracle's own cloud offers.

Verizon deliberately negotiated a range of cloud options for Oracle customers, says Verizon Terremark CTO John Considine. It did this in part because the company continues to view cloud as part of its broader network-security-service portfolio, and in part to ensure that all existing customers of cloud and hosted services have a shot at the new Oracle offers. At the same time, the company ensures that no one is stranded because of not moving to the newer Verizon cloud.

Admitting that the Oracle negotiation and development process was a long one, Considine says he believes this deal will put pressure on other major enterprise app vendors to move more aggressively into the cloud, which would benefit Verizon in the process.

"This underscores the fact that cloud is big and it's happening," he says. "We think as a partner, Verizon is well-aligned for a company like Oracle because we serve all the top customers and we are bringing our core network, data center, and cloud capabilities together to give the Oracle customer base more outlets and more capabilities for getting their work done."

— Carol Wilson, Editor-at-Large, Light Reading

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brookseven
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brookseven,
User Rank: Light Sabre
1/13/2014 | 11:41:59 AM
Re: Verizon and Oracle
Carol,

Thanks for the clarification.  Do you/LR go to folks like Rackspace or Amazon and go after what they are doing in their business?  They are non-traditional "competitors" to the carriers.  One could certainly compare the use of those type of companies (as well as somebody like Equinix) and compare it to what you could do with a carrier.

seven

 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
1/13/2014 | 10:33:21 AM
Re: Verizon and Oracle
If the story says or implies that this is the first time you can rent Oracle apps by the hour, that's wrong and not what I intended. What BOTH Oracle and Verizon are saying is that this is significantly different from what is available to date and is a first for Oracle with a telecom cloud service provider.

What the analysts are saying is that this is the most comprehensive set of Oracle software to be licensed to the cloud. I don't have personal knowledge of that fact, which is why I quoted them, but there seems to be general agreement on this point. 

Ponnn's comment and questions are well-taken - it would be good to compare a Verizon customer experience to that of an AWS user but since this is brand new, I think it's early days for that. 
Phil_Britt
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Phil_Britt,
User Rank: Light Sabre
1/13/2014 | 10:28:18 AM
Expect On Demand to Grow
This fits into Infonetics analyst's Shira Levine prediction of more ad hoc provisioning of services, as discussed at sister publication Service Provider IT Report. I would expect to see others in this space following Oracle's lead.
brookseven
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brookseven,
User Rank: Light Sabre
1/13/2014 | 9:44:16 AM
Re: Verizon and Oracle
Did everyone ignore ponnn's comment?

http://aws.amazon.com/rds/oracle/

Been there for some time.  Definitely NOT the first time that you can rent an Oracle DB by the hour.

seven

 
C Chappell
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C Chappell,
User Rank: Blogger
1/13/2014 | 6:18:21 AM
Verizon and Oracle
Interesting that Oracle has at last chosen to go direct - some of its distribution partners have already made their cloud moves. Interoute bought Quantix Oracle database-as-a-service provider back in 2011, for example. 
DOShea
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DOShea,
User Rank: Blogger
1/12/2014 | 2:58:15 PM
Long negotiation
I wonder how many hoops Verizon had to jump through, and how much Oracle ws holding out to wait and see how ready and committed Verizon was for the cloud business.
ponnnn
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ponnnn,
User Rank: Lightning
1/10/2014 | 4:20:45 PM
AWS
It sounds like this is a closer relationship and potentially better offering then AWS has, but then again AWS had this 3 years ago. I have never tried RDS for Oracle, so I can't say how well it works.  I would love to read some reports from users comparing the Amazon and Verizon offerings.  Let me know if anyone finds one.  Even a write up from a Verizon user would be cool to read.  Amazon's offering is really bolstered from mypersepctive by having someone like Netflix who is so open about their experience on AWS.

 

 
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