Oracle is taking some drastic, far-reaching steps to fix its troubled cloud-computing business and turn it into a major player.
Right now, Oracle has a cloud service, based at least in part on the technology it got in the acquisition of startup Nimbula. This business is struggling to gain traction against Amazon, Google, and others.
But Business Insider has learned that Oracle has assembled a crack team of cloud experts, assembled from engineers formerly of Nimbula, shuttered startup Nebula, and Amazon Web Services, building a new cloud service to offer right alongside the old one.
Oracle is investing heavily in making this new plan work, paying those engineers top dollar, and even offering raises when it finds out people are interviewing elsewhere.
A vital effort
Cloud computing is a growing trend among businesses, where they outsource a lot of core computing functions to a big tech company, rather than running and managing a bunch of computer servers in their own facility or a leased space.
Oracle’s longtime rival Microsoft is generally seen to be way ahead of Oracle with its cloud offerings, while newcomers Amazon and Google are also cashing in big.
As we’ve previously reported, Oracle has been using very aggressive tactics to sell its current cloud platform. The company’s sales team has resorted to the “nuclear option” of threatening a costly and expensive audit of other Oracle software products, then offering to skip the audit if the customer agrees to add cloud services.
Now Oracle has assigned a team to build a completely new cloud offering to appeal to its largest customers.
Here’s what we know about the product so far:
- The initiative started in early 2015, and is being scheduled to enter private beta late next year with select customers. It’s going to be targeted at banks, hospitals, and other customers with stringent security and compliance needs, rather than small, independent developers. It will be billed as being way more reliable and higher performance than Amazon Web Services, while still meeting security needs. While Amazon is focused more on developers and startups, Oracle’s new cloud will comply with the way that big businesses already build their applications. The current Oracle Cloud offering, which is more similar to Amazon Web Services, will stick around for at least a while. The new public-cloud team is mainly working out of offices in downtown San Francisco and Seattle, rather than Oracle’s main headquarters in Redwood City. When Larry Ellison held a special event to announce two dozen new features for the Oracle cloud, the new public-cloud team watched via webcast from the office with a mix of amusement and interest – not all of the features he mentioned were ready yet.
The initiative is so important to Oracle, the company has offered many of the team working on it stock-based incentives worth around $500,000, and has thrown additional incentives of $100,000 or more at people who have shown interest in leaving for other companies.
The team also gets away with a lot of little things that the rest of Oracle does not.
For instance, when the team was struggling with Oracle’s central IT to get the server resources they needed, the team requisitioned a bunch of desktop computers from Oracle’s Seattle office and turned them into an OpenStack-powered private-cloud-development environment so they could continue their work in peace, right in the middle of the office floor.
If any other team did this, they would probably be fired, suggests a person familiar with the matter.
- Justin Sullivan/Getty
While the new team is apparently in favor with Oracle leadership now, that doesn’t mean the old one is slated for the scrap heap – Ellison is known to spur internal competition within the company. So there’s no guarantee that the new cloud will ship on schedule with the promised features, or that Oracle will keep it around at all.
But one thing is clear: The heat is on for the current cloud product and the teams running it.
Oracle declined to comment for this story.