Oracle and Cloud Computing. Funny.

The announcement by Oracle this week that they are "on the cloud" was once again quite an amusing piece of public relations. I don't know if Oracle is serious when they make these announcements or if they are secretly smiling to themselves.

Not everybody ate it up (although many did). Vinnie Mirchandani, a keen observer of the enterprise software space, wrote: "It will not reduce costs of Oracle licensing or even worse, the annual maintenance cost."

Oracle seemed to have missed one of the main points of cloud computing -- that it's an on-demand approach and that includes software licensing costs.  In case you didn't notice, Oracle is not offering pay-per-use pricing for the cloud. All they are saying is that you can use the regular perpetual, upfront, fully-paid software license on EC2. Big Whoop.

The other major problem with the Oracle announcement is that their software really isn't suitable for a cloud environment. It can't grow and shrink on-demand, it's not self-healing, it's dependent on centralized components, it's complex. It's just not right.

I discuss this in greater detail in GigaSpaces and the Economics of Cloud Computing, where I also discuss another amusing press release from Oracle. Reposting it here for your convenience:

Another interesting comparison is revealed by this amusing press release from Oracle about a start-up customer named Qtrax. Look at the stack Oracle managed to sell them to build their application. I put in brackets the price per CPU for each Oracle product from the official price list, and I quote:

"Qtrax's implementation includes Oracle Database [$17.5k to $47.5k], Oracle Real Application Clusters [$23k], Oracle Enterprise Manager [$3.5 to $20k+] and components of Oracle Fusion Middleware [?], including Oracle Application Server [$10k to $30k] and Oracle Coherence [$4k to $25k]. With this software now in place, Qtrax will have the ability to support millions of concurrent users [they better!]."

On top of these numbers (which total in the range of $58k to $145.5k per CPU¹)add a 22% annual support fee. As these are perpetual licenses, let's break the license numbers to an hourly rate by assuming 24/7 for 3 years: we get $2.20 to $5.54. Even if you decide to be generous and divide by 4 years, you get $1.65 to $4.15. Now, let's not forget that Oracle doesn't actually offer any special pricing for it's products on EC2 (i.e., an hourly rate)² so you would have to buy the licenses upfront, as Qtrax apparently did.