How did Amazon push Oracle Bone Inscriptions to the cloud step by step?

Oracle Bone Inscriptions, the world's largest database company, recently leased 6,543.8+6,000 square feet of office space in Seattle, the capital of cloud computing, which is about thousands of kilometers away from its headquarters in Silicon Valley, California, but only a stone's throw away from its latest competitor Amazon.

With a market value of $204.5 billion, Oracle Bone Inscriptions is still one of the most profitable software companies in the world. Larry Ellision, the founder, is a strong, aggressive and undisguised figure. Before 20 13, he was a model of starting a business in silicon valley-starting from scratch, grasping the opportunity skillfully and expanding horizontally by hook or by crook, and his sales doubled year after year, and he himself became the richest man in silicon valley.

Later, Ellison became famous for his grandiose rhetoric and satire on business competitors. In March of this year, he publicly stated that both Amazon and Microsoft are failed competitors, at least in the technical aspect of cloud computing. Embarrassed, Oracle Bone Inscriptions is several times behind them.

Four years ago, Oracle Bone Inscriptions surpassed IBM and became the second largest software company in the world after Microsoft. Amazon gradually emerged from a group of cloud service providers. Synergy, a research company, released a report at that time, saying that Amazon's revenue growth rate in one quarter greatly exceeded the growth rate of all markets, and predicted that Amazon's revenue in the next quarter would be more than all competitors 15%.

The two companies, which were originally parallel lines, soon fought side by side. If nothing else, the emerging cloud computing companies represented by Amazon are constantly cutting prices and eroding the living space of Oracle Bone Inscriptions.

Facing the change, two software-based companies chose different paths. With the help of product advantages, Microsoft quickly and actively cut into the cloud computing market, while Oracle Bone Inscriptions spent several years resisting, hesitating and then radicalizing, which led to the different fates of the two companies today.

In 20 13, the market value of Microsoft has been hovering around 200 billion dollars, but by 20 17, the market value of Microsoft has approached 640 billion dollars. In contrast, the pace of Oracle Bone Inscriptions has obviously stagnated.

20 14, Larry Ellision finally bowed to the "cloud". Ellison suddenly announced his resignation as CEO and transferred to CTO, putting more energy into product development and strategy formulation. He made up for the lack of free business through big acquisitions and shortened the time to become a complete cloud service provider. After that, integration, product standardization and automation are carried out, and finally complete cloud computing services including IaaS, PaaS and SaaS are provided to customers.

Judging from the financial situation, Larry Ellision's strategy seems to be effective. Revenue in the first quarter of fiscal year 20 18 increased by 6.9% year-on-year, which was the highest growth rate in a single quarter since 20 1 1. At the same time, the proportion of cloud computing business in total revenue increased from 5.5% in fiscal year 20 15 to 16%.

In June 5438+10, at the global conference, Oracle Bone Inscriptions lowered himself again and began to talk about cost performance, which seemed to be a good sign. Oracle Bone Inscriptions was forced to go to the cloud step by step by Amazon, trying to subvert the existing cloud business model. However, cloud business is still in the first half, and there is obviously still a chance.

Amazon forced four years.

When the crisis occurred, it was the moment when Oracle Bone Inscriptions's income reached its peak.

20 13 10, the total revenue of Oracle Bone Inscriptions's software business in the past year has surpassed IBM in the same period, becoming the second largest commercial software company in the world. At this time, IBM's software revenue was $25.7 billion, and Oracle Bone Inscriptions's revenue was $27.8 billion.

This is just a numerical transcendence. Product mix and data processing capabilities have played a vital role in locking in core users in Oracle Bone Inscriptions, and the continuous purchase of software licenses by core users has provided stable income for Oracle Bone Inscriptions. If there is no change, it will be a benign business cycle.

However, almost at the same time, the cloud computing industry broke out, subverting the existing business model. Users can use lower prices and buy on demand. This makes Oracle Bone Inscriptions once and for all into a deep passive. Even more deadly, the solutions provided by cloud computing companies can reduce risks and help users complete the migration.

Substitution is always the most effective way to grab the market. On July 20 13, Alibaba, which has entered the ranks of cloud computing vendors, announced that its company had completely off the Oracle Bone Inscriptions database. This is a change since 2008. Oracle Bone Inscriptions database, once considered irreplaceable, began to be taken away by Internet companies.

After Ali, Amazon AWS relay. 20 15 10, Andy Jassy, CEO of Amazon AWS, publicly accused Oracle Bone Inscriptions of bundling users through expensive commercial contracts. AWS has launched Database Migration Service (DMS) to help users migrate from the databases of competitors such as Oracle Bone Inscriptions, or they can keep their original Oracle Bone Inscriptions database and just migrate from their own data center to AWS. But the latter method often leads users to AWS database products.

According to the data released by Amazon, the database users in Oracle Bone Inscriptions migrated to AWS platform faster and faster, from 65,438+08,000 customers in 2065,438+06 to 35,000 customers in September 2065,438+07. Since 20 15, the database business has accounted for 20% of the total sales of Amazon AWS.

Ellison thought that Amazon was just a company that provided "toys". "They no longer call it a network (computer), but now they call it cloud computing." Because AWS service customers are mostly entrepreneurs and small and medium-sized companies that can't afford the products of IT companies like Oracle Bone Inscriptions.

However, Ellison is well aware of the terrorist pressure brought by Amazon to Oracle Bone Inscriptions. At that time, he said in a public speech, "In the past twenty years, we have paid close attention to two competitors, IBM and SAP, but now we no longer pay attention to either of them." This time he chose Amazon AWS and Microsoft.

Facing the naked challenge initiated by AWS, Oracle Bone Inscriptions's coping strategy turned out to be to raise the authorized price, which was booed by the outside world. To Oracle Bone Inscriptions's surprise, Amazon AWS also began to expand into the banking industry, which is the core of Oracle Bone Inscriptions.

Amazon AWS lobbied the banking industry that cloud computing can meet the requirements of peak computing and storage, save costs in low time, and is very suitable for supporting mobile applications, which is conducive to dealing with the risk of emergencies. Nowadays, the banking industry is also seeking transformation, which is obviously tempting.

Turn and go to the clouds.

20/kloc-in September, 2006, Larry Ellision announced at the press conference in Oracle Bone Inscriptions that he would go all out to enter the field of cloud computing. He even bluntly said that "the era of Amazon's monopoly will become a thing of the past".

At this time, Ellison was 72 years old.

In recent years, although he has a tough attitude towards the cloud, especially AWS, Ellison has actually laid out cloud computing business in multiple dimensions.

From 20 1 1 to 20 16, Oracle Bone Inscriptions acquired 15 innovative companies, covering all aspects of the cloud, including not only vertical players such as cloud customer service provider RightNow, but also virtualization technology company Xsigo and Docker container management service provider StackEngine.

In order to fully support the cloud architecture, Oracle Bone Inscriptions rewrote almost all software products, redesigned the interaction of application programs and developed high-performance server chips. From the underlying chips to IaaS, PaaS, SaaS and industrial applications, Oracle Bone Inscriptions is innovating all aspects of cloud computing.

In September this year, Ellison announced a cloud sales plan starting from the 25th of that month. This plan includes two parts: PaaS (Platform as a Service) and general authorization. Ellison wants to completely change the way users buy and use the cloud.

This can be seen as another iteration of cloud transformation in Oracle Bone Inscriptions.

Before that, users in Oracle Bone Inscriptions could use their locally deployed licensed software licenses to conduct IaaS (Infrastructure as a Service) business in Oracle Bone Inscriptions, but now Oracle Bone Inscriptions has extended this service to PaaS, that is, databases, middleware and analytical software. This means that locally deployed users can immediately use Oracle Bone Inscriptions's database cloud.

The so-called "universal authorization" means that users can sign contracts, that is, they can use all the cloud services in Oracle Bone Inscriptions, and the operating system in Oracle Bone Inscriptions is changed to account according to the total consumption of users, rather than being independent of each other. When Oracle Bone Inscriptions releases a new service, users can use it without re-signing a contract with Oracle Bone Inscriptions.

This is a strategy developed directly for Amazon AWS.

Ellison said that if you want to buy $65.438 billion+cloud computing service, you must tell AWS what kind of data center and service you need, and then AWS will calculate the cost. However, in Oracle Bone Inscriptions cloud platform, users can choose services at will, which is more flexible.

In the past year, Oracle Bone Inscriptions merged the database and middleware departments, which changed the previous organization and management mode that PaaS business was independently developed by small teams and lacked integrity. After that, Oracle Bone Inscriptions released a new generation of independent database cloud with machine learning, which improved the performance of products and the convenience of management.

At the same time, Oracle Bone Inscriptions continues to attract large companies to support its plan to transform to the cloud. After several months' efforts, in May of 20 17, Oracle Bone Inscriptions announced the cooperation with telecom operator AT & amp； T reached an agreement that thousands of internal databases, including PB-level data and related application workloads, will be migrated to the cloud platform in Oracle Bone Inscriptions.

The support of big companies gives Ellison the confidence to fight a marketing war with Andy Jesse. Larry Ellision listed six test results, which showed that Oracle Bone Inscriptions's technical performance and success were ahead of Amazon AWS.

What Oracle Bone Inscriptions wants more is the IaaS (Infrastructure as a Service) market, which is the biggest foundation of Amazon and Microsoft. For IaaS, despite the lack of added value and limited profit margin, Oracle Bone Inscriptions is still very persistent in its investment.

Wu Chengyang, vice president of Oracle Bone Inscriptions and general manager of Cloud Platform Division in Greater China, told Caijing that in the past, infrastructure was only a standardized service, but now more and more enterprises need customized services, and Oracle Bone Inscriptions's accumulation of software and platforms will feed back to infrastructure, while IaaS itself still has huge room for growth, and the market has not been fully digested.

2065438+In September 2006, Oracle Bone Inscriptions released its new definition of IaaS. Ellison explained that it is faster and cheaper than Amazon AWS and can run demanding database tasks. "The lead of AWS (in infrastructure) has ended."

However, it is not easy for Oracle Bone Inscriptions to fill the shortcomings of infrastructure. Shen Zeng, former head of China District, microsoft azure, said that IaaS is a typical capital-intensive industry, involving huge capital and technology investment.

Although Oracle Bone Inscriptions hopes to promote the growth of IaaS through top-down cloud computing business integration, it has missed several opportunities for cloud computing development, and it is difficult to break through in the large-scale competitive cloud computing market in the short term. 20 17 September, Gartner released the "20 16 global IaaS report", showing that the market share of Amazon AWS is 44.2%, that of Microsoft is 7. 1%, that of Alibaba Cloud is 3%, and that of Oracle Bone Inscriptions is not listed separately.

In fact, Oracle Bone Inscriptions is more active in the expansion of SaaS (Software as a Service). On the one hand, there is a comprehensive cloudization within Oracle Bone Inscriptions. A former strategic manager of Oracle Bone Inscriptions told him that Ellison initiated compulsory measures to shift the sales of previous application products from providing local deployment to SaaS sales, and the company constantly recruited SaaS sales staff.

On the other hand, Oracle Bone Inscriptions made large-scale acquisitions in the market and completed the integration with its own products. In this arms race, although Microsoft and Amazon AWS have successively acquired some startups, it is far less intense than Oracle Bone Inscriptions's one-sided situation.

Up to now, Oracle Bone Inscriptions has released 3,500 SaaS services, forming a business matrix including customer experience solution (CX) cloud, human capital management (HCM) cloud and enterprise resource planning (ERP) cloud.

In contrast, Amazon AWS is deployed on its cloud platform through SaaS service providers and ISV (Independent Software Developers) products, and expands into vertical areas, and its own services have just begun to try; Although Microsoft leads the market in SaaS revenue ranking with Office 365, Dynamics 365 and LinkedIn, its product portfolio is relatively thin.

An IT industry expert familiar with Oracle Bone Inscriptions told me that this will become the most likely cloud business in Oracle Bone Inscriptions. "After all, at this stage, cloud computing giants such as Microsoft and Amazon can't pose a threat to Oracle Bone Inscriptions".

Back to Amazon

Just like other IT companies undergoing painful transformation, it is likely that Oracle Bone Inscriptions will find it difficult to maintain high income for some time to come, or even have a downward trend, and its profits will be affected.

The radical transformation in the past four years has narrowed the distance between Oracle Bone Inscriptions and AWS. Gai Guoqiang, founder of IT company Yunhe Enmo, commented on Caijing reporter. Next, we will see how Oracle Bone Inscriptions can surpass others through innovation on this basis.

Oracle Bone Inscriptions even began to attack Amazon AWS's advantageous areas. In 20 16, Oracle Bone Inscriptions completed the acquisition of NetSuite, with a transaction amount of 9.2 billion US dollars, far exceeding Oracle Bone Inscriptions's acquisition of Sun in 2009, making it the largest acquisition in the company's history. Oracle Bone Inscriptions CEO Mark Hurd told us that through the acquisition, Oracle Bone Inscriptions has acquired 40,000 small and medium-sized enterprise customers of NetSuite, which will complement the existing customers in Oracle Bone Inscriptions.

20 17, 1 1, Oracle Bone Inscriptions announced a new batch of customers in China, and mobike, Iflytek and other popular fried chicken industries were on the list. Among them, mobike deployed HCM and ERP cloud, hoping to solve the challenges brought by the younger employees and the cross-ecological business model to the internal management of the company after the expansion of the company's development scale. The company's experience in enterprise-level business is gradually released.

However, Internet customers are not loyal to the cloud platform, and often choose different service providers according to their business needs. Therefore, it is more critical for Oracle Bone Inscriptions to retain its traditional core customers. Hybrid cloud can meet the migration needs of these users. Traditional customers want to switch seamlessly between public and private clouds to ensure that they can reduce risks and try new technologies. After rewriting the code, Oracle Bone Inscriptions opened up a whole line of products, which can support the demand of one-click migration.

Mark hurd said that customers will find that public clouds and private clouds in Oracle Bone Inscriptions have the same standards, architectures, products and skills, which will help customers migrate seamlessly between them, reduce costs and accelerate more innovation.

In fact, the demand of cloud computing users has changed from the quantitative change of cost saving to the qualitative change of obtaining value-added services such as data analysis and business forecasting.

Thomas Courrian, president of product development of Oracle Bone Inscriptions Company, said that there are five major trends in the future of cloud computing: artificial intelligence and machine learning, "independent" software, Internet of Things, blockchain and human-computer interaction. This is also the focus of Amazon AWS and Microsoft layout.

On 20 17 10, Oracle Bone Inscriptions released cloud solutions in the direction of internet of things and blockchain, but it has started to cooperate with customers with corresponding solutions. In August of the same year, mitsubishi electric developed a new platform for its factory automation with the help of Oracle Bone Inscriptions Internet of Things cloud service. Through this platform, customers can quickly collect, analyze and use data in the production site, and then develop applications to meet production needs, optimize the supply chain and manage factories around the world.

Traditional sales customers are becoming Oracle Bone Inscriptions's R&D partners. Gap, a clothing retailer, deployed its sales-related cloud services on Oracle Bone Inscriptions Cloud. Paul Chapman, CIO of Gap, said that in the past six months, his team and Oracle Bone Inscriptions * * * completed the whole process from developing and planning the solution to online deployment.

Oracle Bone Inscriptions needs to expand the range of partners and build a complete cloud computing ecosystem. Up to now, more than 2,600 members have joined the Oracle Bone Inscriptions Partner Network Cloud Program, but it is still lower than the previous software-based ecosystem with tens of thousands of people in Oracle Bone Inscriptions.

Besides Microsoft, Oracle Bone Inscriptions is the second to put forward a complete transformation plan, which brings new hope to other traditional IT companies, even though they are old.