As the Cloud Wars intensify due to surging acceptance of cloud computing among business decision-makers, all but one of the major cloud vendors are forming strategic alliances to win the hearts, minds, and wallets of corporate buyers.
And if it is true that the enemy of my enemy is my friend, then don't be betting on Oracle to win any popularity contests within the cloud-computing community--because Larry Ellison and company are choosing to buck the trend and avoid strategic alliances like the plague.
So the question before the house is this: will the slew of cloud alliances deliver unique and superior value to businesses eager to expand their use of the cloud, or will Oracle's rugged-individualist stance—spanning all three layers of the cloud—prove to be the winning formula?
The trend toward cloud alliances—and I'll list some of those in detail in just a moment—is predicated on the idea that the partnerships will provide business customers with more-complete and more-attractive offerings from cloud providers that can't offer end-to-end cloud solutions on their own.
That's why we're seeing a number of major SaaS vendors name Amazon as their "preferred cloud infrastructure partner"—that pairing is designed to reassure customers that they won't have to jump through hoops to try to configure their own infrastructure for running the SaaS cloud apps.
Microsoft solidifies its hold on #1 in Cloud Wars Top 10 with compelling alliance with healthcare... [+]
For example, two of the world's leading SaaS companies, Salesforce.com (tied for #2 on the Cloud Wars Top 10 rankings) and Workday #8), have become quite vocal in touting Amazon Web Services as their preferred infrastructure provider. Workday's also paired up with IBM for infrastructure services in the specialized category of development and testing.
SAP (#4), looking to complement its position as the world's leading enterprise-applications provider as it pivots aggressively to the cloud, has formed infrastructure alliances with not only AWS (tied for #2) but also IBM (#5) and Google (#7). While each of those is important, the most intriguing pairing is with Google because it goes beyond being a straight infrastructure play.
And in the white-hot AI space, Salesforce and IBM have formed an alliance to offer business customers the unique pairing of IBM's Watson AI for unstructured data and Salesforce's Einstein AI for structured data, giving businesses a blended set of capabilities that would have been almost impossible to create separately.
Meanwhile, #6 Oracle continues to feel its best approach is to spurn such alliances because it offers everything a modern cloud buyer could want: SaaS, PaaS, and more recently IaaS. This goes back to Ellison's decision, made more than 10 years ago, to rewrite all of Oracle's IP for the cloud: applications, middleware, and perhaps most important of all, the Oracle Database.
That all-in, end-to-end approach, is classic Ellison: don't attempt to do the same thing your competitors are doing a little bit better than they can do it, but instead do something totally different—something those competitors would be unable or unwilling to attempt. For Ellison and Oracle, that means developing every type of cloud service a business customer could want: not just some cloud apps, but every category of SaaS; not just some middleware, but everything from Java to Oracle Database and integration tools in the PaaS category; and rather than relying on AWS or Google or Microsoft for IaaS, go out and spend many billions of dollars to create its own global cloud-infrastructure data centers and related capabilities.
(True to form, Ellison said Oracle's new "Generation 2" IaaS will be better, faster, and cheaper than Amazon's, and that Oracle will become the world leader in IaaS—despite the fact that Amazon's IaaS revenue is now more than 50 times as great as Oracle's.)
And while Ellison insists that Oracle's biggest competitors in the cloud are Amazon and Workday, I think that's misleading, and perhaps deliberately so: Oracle's most-daunting cloud competitor is without question Microsoft—the #1 company on the Cloud Wars Top 10—which is the only enterprise-cloud player that, like Oracle, can offer world-class services at all three layers of the cloud: SaaS, PaaS and IaaS.
Microsoft's current annual cloud-revenue run-rate of $14 billion is more than twice that of Oracle's; customer adoption of the Microsoft Azure cloud platform is booming; and Microsoft early on built out a network of global cloud data centers that's far beyond what Oracle now offers.
Plus, Microsoft's Dynamics SaaS suite has quietly gained strong acceptance among big corporations as well as within its traditional mid-market base.
But where Microsoft CEO Satya Nadella is truly outmaneuvering Oracle is in the area of what I call "cloud plus"—in Microsoft's case, cloud plus AI, cloud plus machine learning, and more recently cloud plus customer expertise.
Here's an example from a Microsoft blog about the company's sweeping healthcare initiative, which fully exploits the power of not only Microsoft's global cloud capabilities but also its unmatched expertise and application of AI:
"Healthcare NExT, a new initiative to dramatically transform health care, will deeply integrate greenfield research and health technology product development, as well as establish a new model at Microsoft for strategic health industry partnerships. Through these collaborations between health care partners and Microsoft’s AI and Research organization, our goal is to enable a new wave of innovation and impact using Microsoft’s deep AI expertise and global-scale cloud."
In its bold cloud-plus-customer-innovation and cloud-plus-AI foray into healthcare, Microsoft has formed an alliance not with other cloud vendors but with a world-renowned customer that feels Microsoft has the ability to help it revolutionize healthcare and optimize the doctor-patient relationship.
From that same blog post: “Despite UPMC’s efforts to stay on the leading edge of technology, too often our clinicians and patients feel as though they’re serving the technology rather than the other way around. With Microsoft, we have a shared vision of empowering clinicians by reducing the burden of electronic paperwork and allowing the doctor to focus on the sacred doctor-patient relationship,” said Steven D. Shapiro, M.D., chief medical and scientific officer of UMPC and president of UPMC’s Health Services division.
No doubt other top cloud vendors have been pursuing some innovative new engagement models with customers, but what strikes me about this partnership from Microsoft is how it brings to bear not just cloud services but also AI, deep research, and industry expertise.
Perhaps that's the next front in the Cloud Wars: transcending the core cloud services on which we're focused today and blending them with the power of AI, the inextricably linked disciplines of research and IT, and the accumulated insights of industry expertise.
To me, it's no surprise that Microsoft is out in front on this striking new initiative—it's yet one more reason why Microsoft and CEO Nadella are #1 in the Cloud Wars today, and will likely remain there for a very long time to come.
