June 4, 2023


Everything You Value

Oracle offers to put its new cloud technology inside customer data centers

By Stephen Nellis

(Reuters) – Oracle Corp on Wednesday said it is now offering to put all of its cloud computing technology inside its customers’ data centers for an $18 million spending commitment over three years and has signed customers in Japan and Oman.

Cloud computing emerged more than a decade ago. Technology companies, such as Amazon.com’s Amazon Web Services, used their expertise at owning and operating data centers efficiently to rent out computing capacity and software tools to other businesses over the internet.

But many businesses that turned to cloud providers still handled at least part of their computing inside their own data centers. This was either for speed reasons – connecting to a cloud data center takes time for data to travel over the internet – or to meet legal or regulatory requirements about where data must be stored.

To address those customers, all major cloud providers – including Oracle, Amazon, Microsoft Corp, Alphabet Inc’s Google and International Business Machines Corp – offer “hybrid” options to make it easier for customers to use cloud technology inside their own data centers.

Many of those approaches rely on a business using the cloud provider’s software on their own hardware, which limits the number of cloud features offered.

Oracle, by contrast, asks for space inside a customer’s data center and drops in its own cloud hardware and software, offering all the same services as if Oracle owned the data center, and handling all maintenance. The minimum contract commitment is three years at $500,000 per month.

“The customer is buying cloud services and they are providing us space and power and a network connection,” Clay Magouyrk, executive vice president of engineering, Oracle Cloud Infrastructure, said in an interview. “If a hard drive breaks it’s our hard drive. Our job is to fix it.”

Oracle said that Nomura Research Institute Ltd, a Japanese management consulting and economic research firm, and Oman Information Technology and Communications Group, a state-owned entity in Oman, have signed up for the service.

(This story corrects first paragraph to reflect that the $18 million contract commitment is paid over three years)

(Reporting by Stephen Nellis in San Francisco; Editing by Bernadette Baum)