Don't expect an Amazon EC2 competitor from Oracle

Although Oracle will gain all the technology it needs to launch a public cloud-computing infrastructure service like Amazon's Elastic Compute Cloud (EC2) with the purchase of Sun Microsystems, it has "no plans" to do so, Oracle Chief Corporate Architect Edward Screven said Wednesday during a company event.

Services like EC2 offer pay-as-you-go, on-demand computing resources over the Internet that can scale up and down according to demand.

But Oracle isn't interested in getting into that game. "We don't plan on being in the rent-by-minute computer business," Screven said. That doesn't mean Oracle won't sell technology to companies that offer such services, he added. It will also focus on helping customers build private clouds.

Oracle's plans represent a partial departure from a cloud-computing strategy Sun announced last year, prior to Oracle's move to buy the company. But on balance, Oracle's decision isn't surprising, observers said.

"The public cloud business isn't glamorous," said Michael Coté, an analyst with Redmonk. “While buyers may want the promised ease and cheapness of public clouds, I'm not sure most traditional vendors are willing to put in the painful change needed to offer public clouds for the measly margins they'd bring.”

PaaS (platform as a service) offerings such as Microsoft’s Azure and SaaS versions of applications like IBM Lotus and Tivoli let vendors “charge a premium for the value-add on top of generic infrastructure, like EC2 provides,” he said. “I mean, think about it: Is IBM or Oracle or Microsoft going to make their quarterly numbers selling storage for a few cents a gig and processing for a few cents an hour?”

“With private clouds, every Fortune 100 company has their own private cloud, duplicating the costs of deploying and managing it over each of those clouds versus centralizing on a few public clouds,” Coté added.

THINKStrategies analyst Jeff Kaplan is of a similar mind.

Companies like Oracle simply don't have the mentality that fits the "high-transaction, commodity business of doing an EC2," Kaplan said. "They maybe don't mind linking to it, but they're not interested in replicating it. ... While they may offer something, just so they can keep their hand in the segment of the marketplace, the more prominent piece will be around virtual private clouds.”

Copyright © 2010 IDG Communications, Inc.

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