Amazon Inc’s emergence as a major provider of data centre technology has turned many of its longtime suppliers, including Oracle, into heated rivals.
Now Amazon is dealing yet another blow to Oracle. The e-commerce giant, having already moved much of its infrastructure internally to Amazon Web Services, plans to be completely off Oracle’s proprietary database software by the first quarter of 2020, according to people familiar with the matter.
The shift is another sign of Amazon’s rapid ascent in enterprise computing and further shows how much Oracle is struggling to keep pace as businesses move workloads to the cloud and away from traditional data centers. Propelled in part by expansion at AWS, which reported 49 percent revenue growth for the second quarter, Amazon passed Alphabet earlier this year to become the second most valuable publicly traded company in the world.
Meanwhile, Oracle is about the same size it was four years ago and the stock is just above where it was trading at the end of 2014. Oracle shares dropped by about 1 percent after the initial report Wednesday.
Amazon began moving off Oracle about four or five years ago, said one of the people, who asked not to be named because the project is confidential. Some parts of Amazon’s core shopping business still rely on Oracle, the person said, and the full migration should wrap up in about 14 to 20 months. Another person said that Amazon had been considering a departure from Oracle for years before the transition began but decided at the time that it would require too much engineering work with perhaps too little payoff.
The primary issue Amazon has faced on Oracle is the inability for the database technology to scale to meet Amazon’s performance needs, a person familiar with the matter said. Another person, who said the move could be completed by mid-2019, added that there hasn’t been any development of new technology relying on Oracle databases for quite a while.
Amazon’s infrastructure is certainly not foolproof. The company’s constant need for capacity upgrades turned into a near crisis during Amazon’s Prime Day shopping extravaganza last month, when the company’s systems proved incapable of handling a sudden traffic surge.
Shoppers reported numerous errors trying to access the site and CNBC learned the snafu was related to a breakdown in an internal program called Sable, which is used by Amazon to provide storage services to its retail and digital businesses.
War of words
The Information reported on Amazon’s efforts to reduce its Oracle dependency in January. Analyst Brian White of Drexel Hamilton issued a note disputing the report, pointing to remarks Oracle Chairman Larry Ellison had made on the company’s December earnings call.
“Let me tell you who’s not moving off of Oracle,” Ellison said. “A company you’ve heard of just gave us another $50 million this quarter to buy Oracle database and other Oracle technologies. That company is Amazon.”
Ellison continued by noting that “competitors, who have no reason to like us very much, continue to invest in and run their entire business on Oracle.”
An Amazon spokesperson declined to comment for this story. An Oracle spokesperson said in a statement that Amazon has spent hundreds of millions of dollars on Oracle technology, including $60 million about a year ago.
“We don’t believe that Amazon Web Services has any database technology that comes close to the capabilities of the Oracle database,” the statement said.
The two companies have been in a heated war of words. Last year Oracle executives boasted about the cost advantages of using its database software. AWS CEO Andy Jassy fired back a few weeks later in an interview with CNBC, saying that Oracle is “a long way away in the cloud.”
The rivalry kicked off in earnest in 2014 after AWS introduced the Aurora relational database service, taking aim at Oracle’s core market. Capital One, Expedia, GE and Verizon are among the companies now using Aurora, according to the AWS website.
AWS also offers a tool that allows businesses to move databases to the cloud. The Database Migration Service, which supports Oracle’s software, has handled the transfer of more than 80,000 databases to AWS, Jassy said in July.
Amazon’s emergence as a major provider of data center technology has turned many of its longtime suppliers, including Oracle, into heated rivals.
Now Amazon is dealing yet another blow to Oracle. The e-commerce giant, having already moved much of its infrastructure internally to Amazon Web Services, plans to be completely off Oracle’s proprietary database software by the first quarter of 2020, according to people familiar with the matter.
The shift is another sign of Amazon’s rapid ascent in enterprise computing and further shows how much Oracle is struggling to keep pace as businesses move workloads to the cloud and away from traditional data centers. Propelled in part by expansion at AWS, which reported 49 percent revenue growth for the second quarter, Amazon passed Alphabet earlier this year to become the second most valuable publicly traded company in the world.
Meanwhile, Oracle is about the same size it was four years ago and the stock is just above where it was trading at the end of 2014. Oracle shares dropped by about 1 percent after the initial report Wednesday.
Amazon began moving off Oracle about four or five years ago, said one of the people, who asked not to be named because the project is confidential. Some parts of Amazon’s core shopping business still rely on Oracle, the person said, and the full migration should wrap up in about 14 to 20 months. Another person said that Amazon had been considering a departure from Oracle for years before the transition began but decided at the time that it would require too much engineering work with perhaps too little payoff.
The primary issue Amazon has faced on Oracle is the inability for the database technology to scale to meet Amazon’s performance needs, a person familiar with the matter said. Another person, who said the move could be completed by mid-2019, added that there hasn’t been any development of new technology relying on Oracle databases for quite a while.
Amazon’s infrastructure is certainly not foolproof. The company’s constant need for capacity upgrades turned into a near crisis during Amazon’s Prime Day shopping extravaganza last month, when the company’s systems proved incapable of handling a sudden traffic surge.
Shoppers reported numerous errors trying to access the site and CNBC learned the snafu was related to a breakdown in an internal program called Sable, which is used by Amazon to provide storage services to its retail and digital businesses.
War of words
The Information reported on Amazon’s efforts to reduce its Oracle dependency in January. Analyst Brian White of Drexel Hamilton issued a note disputing the report, pointing to remarks Oracle Chairman Larry Ellison had made on the company’s December earnings call.
“Let me tell you who’s not moving off of Oracle,” Ellison said. “A company you’ve heard of just gave us another $50 million this quarter to buy Oracle database and other Oracle technologies. That company is Amazon.”
Ellison continued by noting that “competitors, who have no reason to like us very much, continue to invest in and run their entire business on Oracle.”
An Amazon spokesperson declined to comment for this story. An Oracle spokesperson said in a statement that Amazon has spent hundreds of millions of dollars on Oracle technology, including $60 million about a year ago.
“We don’t believe that Amazon Web Services has any database technology that comes close to the capabilities of the Oracle database,” the statement said.
The two companies have been in a heated war of words. Last year Oracle executives boasted about the cost advantages of using its database software. AWS CEO Andy Jassy fired back a few weeks later in an interview with CNBC, saying that Oracle is “a long way away in the cloud.”
The rivalry kicked off in earnest in 2014 after AWS introduced the Aurora relational database service, taking aim at Oracle’s core market. Capital One, Expedia, GE and Verizon are among the companies now using Aurora, according to the AWS website.
AWS also offers a tool that allows businesses to move databases to the cloud. The Database Migration Service, which supports Oracle’s software, has handled the transfer of more than 80,000 databases to AWS, Jassy said in July.
In a 2016 meeting with analysts, Ellison said that Amazon’s cloud still wasn’t ready for primetime, and that as Oracle’s big customers moved to the cloud, they would push their databases to Oracle’s services.
“Our database customers really can’t run their machine-critical workloads at Amazon,” Ellison said. “They can’t do it.”
But since then Oracle has failed to pick up notable market share in cloud infrastructure. AWS has a commanding lead in that market and is followed by Microsoft, Google, Alibaba and IBM.
Investors are now left guessing about the size of Oracle’s cloud services, after the company last quarter stopped disclosing the amount of revenue it brings in from that business.
Source: CNBC
