The Oracle Cloud Machine – hardware as a service

On March 24th Oracle announced its new offering: “The Oracle Cloud Machine”. An interesting move for a limited number of customers with deep pockets.

Basically, by offering The Cloud Machine, Oracle is moving hardware into the data center and pricing it identically to its offering in the Oracle public cloud. For Oracle as a latecomer to the cloud game, this is a bold move aimed at broadening its hardware footprint in on-premise data centers and charging for it as for software and/or services. Three different machines are available (at least on the US market): 288, 576, and 1,080 cores, with 6.4, 12.8, 24 TB of SSDs, respectively, and 160 TB NAS systems, as well as associated Cisco network drops. All systems are Intel Broadwell X5-based. Offerings for the European market will follow by the end of 2016.

However, it should be understood that this offering is not a classic cost-efficient pay-as-you-go service starting at a couple of 10 or hundred dollars, although the price per core is $75 per month. The base price starts at $21,600 per month and a commitment for a minimum of three years is required. This is only for the IaaS component (basically, the hardware, storage and network). In case a customer wants to have additional PaaS services – e.g., Java Cloud Services or a database - an extra fee per core and per month is charged.

Although customers may have the advantage that this is an externally operated and maintained hardware system behind the firewall of an enterprise, this offering is clearly only for a very limited number of customers. One advantage may be that a seamless integration between on-premise and in-the-cloud services is possible. Customers may want to develop in the cloud and deploy on premise or vice versa.

Another interesting aspect is the naming of the rack-based systems: Oracle has chosen the name 'Oracle Cloud Machine'. Close observers may be reminded of the name “The Machine”, which was HPE's (HP Enterprise) original project name and has now become a semi-official name for its new memory-centric computing system, which may be available by the end of this year. It is thus obvious against what potential competitors the new Oracle offering is positioned - not against the classic cloud service providers, but against what more or less are the two hardware heavyweights left, HPE and IBM.

It is also interesting that Oracle only offers Intel-based systems instead of its own SPARC architecture-based systems. To us, this is a clear admission that Oracle does not believe in a bright future for its own hardware architecture. This is in contrast to IBM's Power architecture, which managed to win a broad network of supporters in the form of the Power Consortium, ranging from embedded system suppliers through graphic chip manufacturers to complete system manufacturers. However, Oracle left the option open to also offer a SPARC-based Oracle Cloud Machine in the future if a comparable offering were to be available in Oracle's public cloud. Currently, we doubt that this will become reality.

Bottom line: The new Oracle Cloud Machine seems to be made for a small niche market of companies that are afraid of the openness of the public cloud, and which have deep pockets and a strong commitment to Oracle as a company.