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