The Pros and Cons of Oracle Private Clouds

An Independent Analysis of Oracle Private Clouds & Engineered Systems

Oracle is continuing to expand its cloud strategy with a private cloud offering that increasingly blurs the lines between cloud and on-premise. Offering more customer choice is certainly not a bad thing, but it does cause some confusion, particularly when incorrectly positioned by pundits or competitors, so I’m going to use this post to share the pros and cons of Oracle private clouds.

According to Oracle’s Larry Ellison, the company’s private cloud offering is based on the exact same technology as its customer data centers, a configuration the company commonly refers to as “Engineered Systems”, which includes Linux or Solaris operating systems and VM, storage and compute resources from Exadata / Exalogic / Exalytics, all of which is linked with InfiniBand.

The uniqueness of this Oracle solution is the procurement model and the pre-configuration of the compute stack. The private cloud offering includes the option to rent the preconfigured Engineered Systems while deployed in a customer’s data center for monthly fee. It’s not a subscription, lease or purchase, it’s a rental and at the end of the three year rental period the hardware is retained by Oracle.

Oracle has coined the term “Engineered Systems”, sometimes called the “Red Stack”, to achieve the goals of simplifying IT management and improving computing performance by preconfiguring each of the technology layers to work together in an optimal fashion.

Oracle Engineered Systems began in 2008 with Exadata (a preconfigured database cluster) and accelerated in 2010 with Exalogic (computer appliances/servers preinstalled with either Oracle Linux or Oracle Solaris and configurable in different rack size increments).

Engineered systems is somewhat a return from the past, when IBM delivered mainframes (3090’s) and midrange host computers (AS/400s, or today the Series i) as bundled solutions with tightly integrated (and pretty much inseparable) hardware, database/file system management, operating system and sometimes applications. These preconfigured systems provided extremely reliable computing processing, but were locked into closed environments and eventually gave way to lower cost hardware and more flexible applications. Oracle’s Exa-based Engineered Systems hope to bring back more simplified IT management while at the same time leverage open systems standards and technologies to permit flexibility and extendability that was not so easily accomplished in the IBM era.

With that understanding of Oracle’s Engineered Systems and procurement model, here’s where I find the advantages and disadvantages of Oracle private clouds.

Oracle Private Cloud Pros

• Preconfigured and tightly integrated, vendor-managed Engineered Systems reduce IT complexity. Period. IMHO, this is the most material benefit, and one in big demand by both business and technology leaders.
• Engineered Systems dramatically increase compute performance and scalability while at the same time generally achieve economies which reduce IT costs.
• Engineered Systems reallocate much of the IT labor needed for highly technical and specialized hardware and compute services from the customer to the vendor.
• Exalogic configurations available for private cloud deployment are not just limited to large enterprise companies. The offerings go down to eighth rack sizing, made up of 4 servers, thereby becoming a viable option for SMBs.

Oracle Private Cloud Cons

Private clouds may make sense for some companies, but just as hosting is not SaaS, Oracle private clouds are not IaaS (at least where IaaS is now understood) for three primary reasons.

• First, Oracle private clouds are not self-provisioned by customers and not as elastic as the marketing claims may suggest. Engineered Systems offer strong load balancing and can accommodate pre-defined peak periods, but have clear capacity limits and are not scalable on demand, particularly in the way we’ve come to recognize IaaS on demand services from public cloud vendors such as Amazon Web Services, Microsoft Azure or Rackspace. Although in fairness, these more recognized IaaS vendors may offer on-demand scalability, but have not yet matured to manage back office ERP and similar business systems in large scale environments.
• Second, Oracle Engineered Systems don’t really share computing resource pools in a way that achieves the same economies as IaaS in a public cloud context. However, technology leaders considering private clouds obviously have some predisposition or (regulatory, proximity, security or other) business requirements that steer them away from public clouds. Comparing capabilities and benefits of public clouds with private clouds is an unfair comparison, but in this early era of IaaS solutions and loose marketing claims it is nonetheless prevalent and therefore needs to be explained.
• Third, Oracle private clouds are not delivered “as-a-service”. This solution is a rental which can be modified, but is nonetheless bound by hardware and software parameters, for a specified rental period.

Cloud computing and Software as a Service are far less about technology and more about increased flexibility with regard to the purchase and consumption of IT solutions. In part because it doesn’t fall into the nicely defined IaaS market, and in bigger part because Oracle’s marketing terminology is exaggerated, Oracle’s private cloud is being called a “faux cloud” by some bloggers and industry insiders, which is an unfair characterization.

Oracle may be guilty of commingling cloud acronyms but that doesn’t lessen interesting new options for savvy CIOs. Oracle’s labeling of engineered systems delivered as private clouds in the context of IaaS, or its marketing verbiage such as "IaaS On Demand", doesn’t include many of the traditional IaaS or cloud benefits, but creating new computing configuration, procurement and delivery options does grant customers additional choices to evaluate and will be a strong value to some organizations.

Comments (7)	— Comments for this page are closed —

	Blake Vincent
	You're absolutely right that it doesn't make sense to compare public clouds with private clouds, and while this mistake is made by several of the so-called pundits, it's also perpetuated by Oracle's marketing propaganda.

		CXC
		Agreed, but Oracle is neither the first nor the loudest software technology company to try to cash in on the hyperbole. Oracle and all of its competitors will continue to banter around acronyms and technology keywords as part of their marketing efforts. It's up to the customers to make sense of it relative to their own business requirements.

Zach Kirk

The term "private cloud" is somewhat of an oxymoron. A private cloud is really a private TCP/http network housed within your own four walls, so of course it doesn't offer the same scalability, extensibility and elasticity as public cloud networks composed of countless shared servers and clusters. Oracle's use of the private cloud term is not in any way novel, the term has been used in this way for years. Frankly, when bloggers suggest that Oracle's private cloud is a faux cloud it really shows that either they don't understand what a private cloud is or they simply have an ax to grind.

		alan sifferman
		You're absolutely right, but at the same time Oracle perpetuates the false cloud comparisons by suggesting their private clouds deliver public cloud benefits.
		CFO4ROI
		I think the prior comment is exactly the point of the article.

	Alex Peneus
	I think the meaning of private clouds is still misunderstood. Gartner defines a private cloud as "A form of cloud computing where service access is limited or the customer has some control/ownership of the service implementation."

		Anonymous
		I agree that a solid definition can help bring clarity and comparison to ERP vendor solutions, however, Gartner's definition of a private cloud is so broad it's not helpful. Even the term "SaaS" could fall under this private cloud definition as most SaaS customers can self provision and control their SaaS ERP system. Gartner is infamous in sharing the obvious but I think if clarity is needed, you'll need to look elsewhere.

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Comparing capabilities and benefits of public clouds with private clouds is an unfair comparison, as each has different objectives and constraints, but in this early era of IaaS solutions it is nonetheless prevalent and therefore needs to be explained.

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