Cloud services overview: Pursuing a new business model
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Like beauty, progress is often seen from the eye of the beholder.
Oracle Corp. has been one of the IT industry's key players for decades. However, the company was slow to recognize the dramatic impact that cloud computing would have on this space and has been largely on the sidelines as this transformation has unfolded. Recently, the behemoth has tried to catch up and even put an Oracle cloud partner program in place to support its cloud initiative. The vendor has made progress but is still lagging behind the leaders in the cloud race, particularly in the infrastructure as a service (IaaS) segment.
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Indeed, Oracle has given its competitors a huge lead in the cloud market. In October 2015 at OpenWorld, Oracle launched its Elastic Compute Cloud, an IaaS platform that includes virtual machines, databases and storage. The announcement occurred nine years after Amazon Web Services (AWS) launched similar services. Oracle, however, is making its presence felt in software as a service (SaaS), with Synergy Research Group listing the vendor among the leading enterprise SaaS providers.
Selling the Oracle cloud: Partner program expands
To help sell its cloud offerings, Oracle has been building up its cloud channel. In February 2016, the vendor announced the Oracle PartnerNetwork Cloud Program, which has four tiers: Cloud Standard, Cloud Select, Cloud Premier and Cloud Elite. Channel partners need to complete training and reach various sales goals in order to qualify for each level.
Since the program started, Oracle has certified 2,000 cloud-first resellers, according to Kimberly Lasseter, senior director of worldwide alliances and channels at Oracle.
Founded in 2009, Leonovus Inc., an Ottawa, cloud solutions software provider that offers software-defined object storage solutions, is one of those companies. The reseller thought that specializing in Oracle would differentiate its offerings from others in the marketplace.
"Everyone else is focused on AWS; we want to be different," stated Dan Willis, Leonovus' CTO and vice president.
The channel partner, which has 10 employees, went through the training and set-up and encountered the normal bumps. Oracle is a big company so, at times, it has been difficult to identify the right person in the organization who can help the reseller, according to Willis. The channel partner is optimistic about the future: Leonovus expects its Oracle revenue to represent 20% to 30% of its total sales in 2018.
Dan WillisCTO and vice president, Leonovus
Leonovus participates in the Oracle cloud partner program at the Standard level. At this rung of the partnering ladder, a channel company needs to achieve one of the following: cloud specialization certification, building an application for the Oracle Cloud Marketplace, or completing a cloud transaction with annual renewable revenue. Partners are then eligible for online training and branding opportunities.
Next up is Cloud Select. Here, a reseller must either generate $2 million in cloud revenue or complete 10 cloud transactions. They also need to complete two of three criteria: cloud specialization certification, building an application for the Oracle Cloud Marketplace or completing a cloud transaction with annual renewable revenue. In this case, resellers earn discounted -- and even free -- training classes and are eligible to buy discounted development, test and demonstration solutions. They could also qualify for cloud awards.
Cloud Premier is third on the Oracle cloud partner program list. Here, partners sell at least $6 million of cloud solutions, have three successful deployments and publish two success stories. They need to have 20 certified implementation specialists in cloud products and a sales manager and marketing manager dedicated to marketing Oracle Cloud solutions.
Finally is Cloud Elite, which comes in two variations: Elite and Global Cloud Elite. In the former, resellers generate $20 million in revenue while the latter doubles that number. These partners achieve multiple cloud specializations, including advanced specializations, and develop fixed-scope repeatable use case offerings. In return, they become Oracle's go-to partner in various regions.
Signs of progress
While Oracle has been lagging the cloud market, progress is evident. In the second quarter 2017, its cloud revenues were $1.1 billion, up 62% from 2016 numbers.
In addition, Oracle has been pushing on with what the vendor calls Generation 2 of its public cloud efforts. The supplier claimed its solution supports high input/output transaction speeds and low latency because it is based on a flat network, meaning no two compute or storage nodes are more than two hops away from one another.
In addition, the system supports bare-metal servers. These nonvirtualized physical compute nodes have no hypervisor, work well with containers and support high performance applications, such as large databases running Hadoop, according to Oracle.
So what does the future hold for Oracle and its partners?
"Oracle is going to continue to aggressively sell its cloud offerings in 2017," Kaplan concluded. "Customers should expect Oracle to offer attractive packaging and pricing of its cloud offerings to encourage them to test and deploy them in the coming year."
Additional reporting by John Moore.
Gain insight into Oracle's channel buildup prior to the launch of its Oracle cloud partner program
Read a Q&A segment on Oracle's engineered systems and cloud opportunities
Learn about Oracle's quest for IaaS partners