Cloud is now viewed as a foundational technology model for digital transformation and unlocking its full potential will be a key to become a truly digital and future enterprise.
By improving greater elasticity, improved scalability and access to on-demand IT resources, the value of cloud has come to the fore during the Covid-19 pandemic, driven by the twin imperatives of digital acceleration and cost rationalization.
Research firm IDC expects global spending on public cloud to grow by 21.7 per cent this year to $385 billion and by 2023, over 55 per cent of enterprises worldwide will have replaced outdated operational strategies with cloud-centric models.
As they expand their use of the cloud, most enterprises will employ a hybrid cloud environment with workloads spread across multiple public and private clouds.
To drive the business agility that is required, IDC expects global enterprises to modernise over 50 per cent of their existing applications by 2022 through the use of cloud-native development and deployment services, ensuring compliance with data privacy regulations will remain a key consideration over the coming years.
As cloud usage increases, cost optimisation and management will become a major focus area with many enterprises, currently, wasting about 20 per cent of public cloud expenditure.
Matthew Eastwood, Senior Vice-President for Enterprise Infrastructure, Cloud, Developers and Alliances at research firm International Data Corporation (IDC), said that the cloud is now viewed as a foundational technology model for digital transformation and unlocking its full potential will be a key to become a truly digital and future enterprise.
According to IDC, hybrid cloud adoption has doubled in the last 12 months and this is due to management tools and governance capabilities.
“We see customers asking about a clear trend away from traditional IT and how to move towards the cloud, with cloud being the IT operating model. Furthermore, more of this IT will live in service provider data centres,” Eastwood said.
Public cloud providers, at the start, ignored hybrid cloud architectures as they wanted enterprises to move their workloads from on-premises to the public cloud but it has shown that not all want to run everything in the public platform due to data security, compliance, cost and other issues.
Some enterprises moved some of their workloads into private data centres despite leveraging the public cloud for some of their workloads.
To cash in on, all cloud providers started offering hybrid cloud platforms such as AWS Outposts, Microsoft Azure Stack and Arc, Google Anthos and Oracle Cloud at Customer.
Hidden networking costs
Regis Louis, Vice-President for Cloud Strategy at Oracle EMEA, said that organisations are increasingly adopting hybrid cloud today, but hybrid cloud has a different meaning for different people.
“Benefits for CIOs by adopting hybrid cloud is operational cost, automation, autonomous system, software license costs, agility, innovate faster and efficiency but there are challenges such as data security,” he said.
Moreover, he said that there is still a large class of workloads that people would like to keep on-premises for control while the hidden cost of adopting a hybrid cloud is the network cost.
“All the egress cost is high for some customers which they did not anticipate but Oracle is unique in that way when compared to the competition. We have an egress policy that is truly different from the rest. We don’t charge up to a certain threshold and after that, it is extremely small when compared to the competition, which means that data can be moved from on-prem to public cloud or vice versa without incurring high network costs.
“We are, by far, the cheapest when it comes to egress cost where the cost is free for up to 10 terabytes of data and after that, it is extremely cheap when it comes to the competition,” he said.
The US-based 8x8 moved its video meetings services from AWS to Oracle to experience more than a 25 per cent increase in performance per node on Oracle Gen 2 Cloud Infrastructure and savings of over 80 per in network outbound costs when compared with the previous cloud provider.
With Oracle Cloud Infrastructure, Louis said that clients get low network outbound pricing which is over 80 per cent less expensive than AWS in some regions.
By offer low networking prices, he said that customers can move significant volumes of data at a low cost.
Saudi-based startup – Awini - moved to Oracle’s Gen 2 Cloud Infrastructure (OCI) from Amazon Web Services to get a competitive price than AWS.
“The maintenance by Oracle is of really high quality and with no lock-in period for certain technologies. Everybody says that AWS is cheaper but in our experience, the prices are not consistent and sometimes it can go really high. We are working with Oracle to connect our back end with their ERP in stages,” Dr. Abdul Rahman Sultan, CEO and Founder of Awini, said.
Out of the early birds such as AWS, Microsoft and Google, industry experts said that Oracle has done the most on the hybrid cloud front in a bid to make it easier for customers to take advantage of the public cloud and, at the same time, keep their workloads partly on-premises.
Holger Mueller, Vice-President and Principal Analyst at Constellation Research, said that Oracle is at least two generations ahead of everyone else for delivering a production-proven autonomous database—available in the cloud and on-premises.
Oracle Dedicated Region is a fully managed cloud region that brings all of its cloud services into customers’ data centres in a self-contained model while AWS Outposts and Azure Stack Hub have a small subset of services, tethered to their public clouds.
In the Gulf Cooperation Council countries, the Sultanate of Oman has chosen Oracle’s Dedicated Region Cloud@Customer to ensure a high level of data privacy and price-performance, while also provisioning cloud services, workloads, and standardised IT operations for over 120 government and semi-government entities.
With Oracle Cloud@Customer, Mueller said that Oracle has a major lead in the drive to create a next-generation compute platform that allows enterprises to move workloads between on-premises and the public cloud. With Dedicated Region Cloud@Customer, he said that Oracle offers over 50 cloud services, including SaaS applications, in customers’ data centres.
“This is a significant lead over Oracle’s closest cloud competitors, AWS Outposts and Microsoft Azure Stack/Arc. Surprisingly, AWS, Microsoft and IBM have not responded to Oracle Autonomous Database—creating a multiyear lead for Oracle.”
With Autonomous Database Exadata (ADB) Cloud@Customer, Carl W. Olofson, Research Vice-President and Data Management Software at IDC, said that customers can ensure that all data, including backup data, remains on-prem, which is not always possible with other options.
Deutsche Bank, recently, announced a multi-year collaboration with Oracle to modernise the bank’s database technology and accelerate its digital transformation by upgrading its existing database systems and migrating the bulk of its Oracle Database estate to Oracle Exadata Cloud@Customer to comply with its data residency requirements and significantly reducing operational costs.
“The way we have designed second-gen Oracle cloud infrastructure (OCI) is that security aspect has been at the heart of it and we have built the architecture with security in mind with separation and isolation at the physical level of all the different servers, different tenant and so on. Zero Trust framework is something we have adopted in the design of OCI to provide the highest level of security for the data,” Louis said.
He added that Oracle is the unique cloud vendor in the separation of network virtualisation and compute virtualisation from the get-go but “we are seeing other cloud vendors now adopting something similar. We can open the root and show the customers how security has been managed in your cloud and how it is differentiated from the competition.”
“Moreover, we are encrypting the data, from end to end, to provide confidence to customers and it cannot be accessed by Oracle or anybody. For people who have regulations to go to the public cloud, there is ‘Exadata Cloud@ Customer’ where the data never leaves the premises,” he said.
Fastest growing cloud provider
By looking at the competition, Louis said that none of the competition provides hybrid cloud, in such a broad spectrum, like the way Oracle offers.
“We are the only environment where you can have all the services, we offer, that can run on the public cloud can be run inside your own data centre. The other big difference in the way we have implemented is that when we adopt this hybrid model inside your own data centre, it is fully self-contained, which means that your data and APIs run within your environment but when you look at the competition, they all have a a tethered model which means that they have a connection to the public cloud and exchanges to the public cloud.
“We don’t do this in the dedicated cloud at customer model. Hybrid, in many customers’ minds, is all multi-cloud. In that regard, we have consciously designed OCI to allow full interoperability with other cloud vendors,” he said.
Richard Winter, CEO of WinterCorp, said that Oracle is significantly ahead of other on-premises DB cloud services, including both AWS Outpost and Microsoft Azure Stack Hub, while its ADB on Exadata Cloud@Customer is a distinct differentiator, as AWS Outposts requires all backups to be sent to an AWS public cloud region which could negate data sovereignty, compliance and security advantages.
Unlike Oracle Dedicated Regions, David Floyer, Research Analyst at Wikibon, said that hybrid solutions like AWS Outposts, Google Anthos, and Microsoft Azure Stack are designed for less critical workloads.
"Oracle is lower risk, has higher functionality, and offers broader opportunities to redeploy or reduce internal skilled IT headcount. Neither AWS Aurora nor Redshift is currently available on AWS Outposts. MySQL and PostgreSQL are the only transaction and data warehouse databases currently available. None of the previously mentioned AWS databases is suitable to run large-scale mission-critical business applications with aggressive SLAs for availability, recovery, and security,” he said.
Moreover, he said that Oracle will benefit significantly from the ability to offer its SaaS portfolio in Oracle Cloud@Customer.
Wide partnership deals
To stand out from the crowd and make it easier for enterprises, Louis said that Oracle has signed partnerships with more than 50 partners to make connectivity a reality, technology partnerships with Microsoft, VMWare and ServiceNow.
“We provide zero downtime in migrating from on-prem to public cloud due to automation. Furthermore, we have done automation in a lot of applications to move it to the public cloud easily. It is not a 'lift and shift' to the public cloud but we are taking advantage of being in the cloud, add value and modernising the environment,” Louis said.
The second-gen OCI is more recent than most of the other hyperscalers, he said and added that Oracle has made some specific designs to have better security, better performance and better price performance.
“CIOs need to look at these aspects and they need to look at what is the level of enterprise readiness they get from the cloud provider and look at what are the investments the cloud provider has made on-premise and choose the right cloud for the right workload.
“We have made a very conscious decision to price our services in such a way to make it extremely competitive with the competition. Enterprises need to look not only at the performance but also at price performance. They also need to look at the hidden costs sometimes CIOs don’t look at,” he said.
He said that Oracle, by far, has the most “flexible way” of deploying applications with more than 30 cloud regions, dedicated cloud at customer, Exadata cloud at customer and edge computing.
“Enterprises need to look at the strategy of the cloud provider in terms of hybrid cloud and multi-cloud,” he said.
Challenges of hybrid cloud adoption
One of the key barriers to hybrid cloud adoption is the interoperability and portability issues between the public cloud and the on-premise private cloud providers as they [cloud providers] develop their proprietary services to lock in customers, differentiate their services and achieve a market monopoly.
Louis said that interoperability issues arise when customers are making technology choices that are very much of lock-in in specific cloud providers.
“I have seen many customers adopting different cloud providers and realising that they cannot interoperate because of the choice they have made in technology that runs only in their cloud. One of the interoperability challenges I see very often is the management aspect. How do I build an environment that allows me to manage, observe, and monitor all these workloads wherever they are located,” he said.
Oracle has built multi-cloud management and observability platform on OCI, he said to allow customers to do database management (wherever they are located), do log management (wherever it is coming from) and application performance management.
The second interoperability challenge is the standard of the technology being used while the third is the multi-cloud interoperability, he said.
“When compared to the competition, it is extremely hard for customers to do cloud bursting with VMWare as they offer VMWare as a service, which is very constrained and offered in a different way and with a different security model. It will be difficult to burst as it is not the same environment as in the public cloud as they have it on on-premises.
“What Oracle has done with VMWare is that we have built a layer to the network on OCI that can run VMWare natively on top of OCI, which means that it is the exact thing that they have on on-premise. By doing so, customers can run VMWare workloads either on-premise or on OCI the same way and follow the same operations,” he said.
The key to Oracle’s solution, Roy Illsley, Chief Analyst, Cloud and Data Centre Practice at Omdia, said is to make use of the open standards, such as cloud-native computing foundation, open tracing, open telemetry, and fluent, and to make its platform interoperable with third-party tools.
“Networking in the cloud is the king. You need to have a way to interoperate with different network environments. Interoperability issues are preventing people to make choices in terms of multi-cloud or hybrid cloud.
The way we are trying to simplify the interoperability is multifold. One is that connectivity has to be important and how easy is it to move the technology from on-premises to the cloud or another cloud provider,” Louis said.
“We have stuck to the standards when we built our cloud and technology. Whenever we are introducing something, we make constant decisions to avoid customer lock-in. Lack of standardisation is also a challenge and we see that” he said.
There are interoperability standards today when it comes to networking and technology, he said, but what is more diverse today or difficult to interoperate today are some vendors having some propriety technology running on their cloud.
“It is not interoperability but more of a reversibility issue,” Louis said.
Moreover, Eastwood said that many organisations will struggle to achieve interoperability across multiple clouds and will miss out on the benefits of a truly seamless multi-cloud experience.
“The interoperability requirements of modern applications are determining the most appropriate landing zone for these workloads. Going forward, edge and cloud data applications will play an outsized role in IT decision making,” he said.
“We see a complimentary digital infrastructure ecosystem emerging that is cloud-centric and involve things like software-defined everything, memory-driven infrastructure and cloud-based orchestration. Deployment becomes ubiquitous as shifts and asset usage model, consumption model and location change.
“We will see autonomous operations; cloud-based provisioning, optimisation control, cross-cloud data management and self-regulating AI-enabled operations,” he said.
Managing the diverse cloud resources and data sets, he said will pose the single most critical IT operational challenge.
Moreover, he said that cloud-native modular frameworks and edge service provider deployments will become the norm. These new cloud-native apps, which are abstracted with microservices, will see their orchestration become automated. IDC believes that 95 per cent of edge deployments will be built using cloud-native platforms.
“Our industry is moving from human scale to cloud scale. We have seen a path from multi-cloud silos to self-service to optimisation to cloud centres of excellence and now we are moving into internal cloud Ops. This is driving a shift towards intelligent cloud operations which includes both task automation and workflow automation,” Eastwood said.
Infrastructure automation, he said is beginning to be embedded into cloud services and also in on-prem infrastructures, including at the edge and leading to the convergence of IT roles, including ITOps, cloud Ops and DevOps.
Illsley said that Oracle has designed and built the platform for hybrid and multi-cloud environments as well as for heterogeneous technology stacks while Mueller said that Oracle’s Dedicated Regions match on-premises deployment with public cloud, giving CxOs the peace of mind that their on-premises Oracle stack is being managed as well and as efficiently as Oracle is managing its public cloud data centres.