Shocker! Oracle takes on Amazon with all-Oracle-all-the-time cloud

Updated: Oracle(s orcl) has found a market for its big, pricey engineered hardware systems — and it’s in new public and private Oracle clouds. Oracle CEO Larry Ellison laid out the company’s new all-red infrastructure-as-a-service cloud plan at Oracle OpenWorld on Sunday night.

Oracle is jumping into the public infrastructure as a service (IaaS) business — the market pioneered and dominated by Amazon Web Services(s amzn) — with infrastructure that is all about  Oracle.

Oracle cloud will use “our OS, our VM, our compute services and storage services on the fastest most reliable systems in the world — our engineered systems, Exadata, Exalogic, Exalytics, all linked with Infiniband,” Ellison told thousands of Oracle customers, partners and others at San Francisco’s Moscone Center Sunday night. For banks and other companies with requirements to run infrastructure in house, Oracle will offer a private cloud based on the exact same technology and run and manage it customer data centers, Ellison said.

The promised Oracle 12c (the “c” stands for cloud) database will be the software foundation and Ellison said this iteration of the database will put multitenancy — the ability to securely keep separate sets of data in one place — at the database level where it belongs. The rough concept is that 12C is a database container that can run separate “pluggable” databases — one for ERP, another for CRM and so on.

“Back in 1998 and 1999 when NetSuite(s n) and crm) came out, the only way to do multitenancy was at the application layer,” Ellison said, adding that he had problems with that  — he Ellison used to blast competitors’ user of multitenancy, calling it an aging technology. That apparently all changes now.  (Ellison had stakes in NetSuite and,  both pioneering SaaS companies and still owns a big piece of NetSuite.)

By moving multitenancy into the database, software as a service (SaaS) and platform as a service (PaaS) providers can relinquish that workload to the database and use database query and business intelligence tools to work with them instead of having to come up with application-specific tools.

Ellison: Our SaaS customers want this

Ellison said SaaS and PaaS customers asked Oracle to supply this infrastructure so it will be interesting to see if either or NetSuite — both SaaS companies which use Oracle databases — makes a move. That’s doubtful in’s case since that company is competing more and more with Oracle.  And, NetSuite CEO Zach Nelson will speak at OracleOpenWorld so stay tuned.

Update: Reached by email, NetSuite’s Nelson said: “NetSuite wouldn’t choose to run our application on anyone’s public cloud — Oracle’s, Microsoft’s, or Amazon’s. We need to manage every aspect of our infrastructure to ensure service level commitments we have made to our customers.” No word back yet from’s Marc Benioff.

Update: Nelson wrote back in to clarify his  statement: “I should have qualified this a bit to say we wouldn’t run our ‘production’ application on anyone’s cloud. However, the idea of doing pre-release testing and/or disaster recovery on Oracle’s cloud is interesting to us. And of course, we certainly believe Oracle’s technology is fantastic for cloud delivery as we (like run a complete Oracle database and app server beneath the NetSuite application,” he wrote.

The hardware foundation for Oracle Cloud will be Exadata X3, a new “engineered system” which packs 26TB of memory — 4TB of DRAM and 22TB of Flash memory, Ellison said.

Oracle’s problem in all this is that it has not made much of a case for its hardware to date. Oracle’s hardware business was off 24 percent year over year in its last quarter. It also has a bit of an ecosystem problem. Yes it has SaaS customers, but as several on Twitter commented, they would be more impressed if Oracle had trotted out a list of customers and/or partners that signed up for this cloud effort.

Playing catchup in cloud

And, Oracle’s entry into public cloud is late given that competitors including IBM(s ibm), HP(s hpq), and the OpenStack players are already there.

In addition,  Oracle’s decision to use very high-end specialized hardware to power its cloud flies in the face of conventional wisdom espoused by web giants like Facebook(s fb), Google(s goog) and Amazon that yoke together thousands of commodity servers in webscale data centers. Oracle’s take is definitely scale-up in what appears to be an increasingly scale-out world.

 Oracle OpenWorld photo courtesy  of Flickr user Oracle_Photos_Screenshots