Cloud services hindering Oracle's database

Started by arhimed, Sep 18, 2022, 07:26 AM

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In 2016, newbielink: [nonactive] took the bold step of moving metadata from more than 10 billion sets of photos from a private data center to a public cloud. Shutterfly considered several potential cloud service providers, and eventually chose AWS.
 For many years Shutterfly has used Oracle tools to store and manage photo libraries of more than 20 million active customers. But over time, the company expanded and developed, and began to switch its systems to Amazon cloud services. Representatives of the company said that they needed to transfer their database to "an easier-to-use system." Having studied various options on the market, Shutterfly revealed that Oracle systems "no longer meet the company's requirements in order to have the necessary level of flexibility."

Data migration is the process of transferring data from one storage system to another. Shutterfly is not an isolated case when a large company migrates outside Oracle during the growth of cloud service providers. As a result of such trends in the corporate database technology industry, enterprises prefer newer vendors: MongoDB, Databricks and Snowflake, and others.

Oracle against the Clouds

Databases are of enormous importance in modern digital reality. Today there is no online service, retail transaction or medical procedure that would do without a database. And corporate dashboards, which manage day-to-day operations, rely on carefully selected data repositories developed by Oracle and other companies since the 1970s.

Cloud computing technology appeared in the mid-1990s and became popular in the 2000s. The three leading providers of public cloud services - Google Cloud Platform, Microsoft Azure and Amazon Web Services — have undoubtedly accelerated the adoption of cloud technologies, using their dominant position in the industry. The cloud computing paradigm offers companies many advantages, including ease of scaling, organizational flexibility, fault tolerance, the ability to distribute applications more efficiently in multiple locations and, if used correctly, reduce web hosting costs.

And today, the competition between Oracle and cloud service providers is only intensifying. When the tire company American Tire Distributors (ATD) decided to move its local databases to the cloud, it chose MongoDB.
Although she did not disclose which suppliers she had worked with before, company representatives said that "relational databases, which dominated the industry, no longer cope with the processing of data from most enterprises."

In general, ATD runs 60% of its applications in the cloud. ATD is not tied to any one vendor or technology and will cover various cloud service providers and applications if necessary. Thus, although the company's main development platform is Google Cloud, the company also uses Microsoft Azure and Snowflake.

Migration to cloud systems challenges web server hardware vendors. New cloud computing providers are greatly simplifying the implementation of their technologies by providing end users with a wide range of proprietary tools. Software manufacturers can deploy projects without large groups of database administrators, which saves on well-trained technical staff needed to support Oracle tools. For instance, the video game developer Mythical Games has admitted that it will not be able to hire the staff needed to support Oracle. And with the help of CockroachDB, Mythical Games developers can create applications and immediately launch them. For both startups and large enterprises, that can be a significant cost savings.

Multinational financial corporation JPMorgan & Chase has chosen CockroachDB as its database provider to promote its new banking services application in Europe. Nasdaq is working with Databricks and AWS to update Oracle's local data repositories. Along with Amazon Web Services, DB products from competing cloud web service providers Azure and Google Cloud are also growing rapidly. And such large companies as JetBlue Airways and Automatic Data Processing use Snowflake. This is evidence that companies are reducing their interaction with Oracle quite quickly, as good alternatives have appeared today.

"Companies are no longer implementing pure Oracle," says HashiCorp, a software and application developer for various cloud environments.

Such examples demonstrate only a small fragment of the picture of the database market, which, according to various estimates, costs $ 155 billion on average. It is also evidence of fundamental changes in the industry that threaten the leadership status that Oracle has held for the last 43 years, since Larry Ellison and his team created the first relational database.
Part of the reason for these changes is the emergence of the cloud, which gives enterprises the opportunity to abandon suppliers of outdated software and use more specialized systems.

Forecasts and predictions

Oracle is slowly, but still losing ground. If in 2019 it owned 28% of the database market, according to Gartner, then in 2021 that share fell to 24%. Rivals are rapidly gaining strength. During the same period, Amazon's market share increased from 16% to almost 22%. In MongoDB, for instance, sales increased by 57%, to $285 million in the last quarter. These results, according to analysts and company executives, indicate that enterprises are using MongoDB for increasingly large projects.

Oracle gets a significant portion of its profits from existing customers. Every few years, when companies have to renew their contracts, Oracle can raise prices for maintenance and support — a business with a margin of about 95%, according to the consulting company Palisade Compliance:

"All the company's profits come from Oracle database maintenance. With each contract negotiation, "you go from $22 million a year to $31 million a year, and then to paying $50 million a year."

But despite the migration of some enterprises from Oracle to the cloud, there are good reasons why customers remain.

Oracle has a very powerful and reliable technology. When Moderna was conducting clinical trials of its Covid-19 vaccine, Medidata Solutions partner used an Oracle database to manage and analyze billions of records. Although the need to invest in new technologies is obvious, many companies do not want to take risks and are quite content with Oracle products, instead of carrying out a large-scale and complex infrastructure restructuring. In addition, Oracle has its own cloud, which the company is developing.

Oracle Corp. Results in the fourth fiscal quarter, we exceeded expectations, primarily due to the strong growth of Oracle Cloud. Oracle's revenue growth is driven by continuous efforts to attract more of the company's customers to the cloud. These efforts are paying off: Oracle's cloud infrastructure sales increased by 36% in the quarter compared to last year. And the company recently completed a deal to acquire electronic medical records provider Cerner Corp. for $28.3 billion, which paves the way for further expansion in the field of healthcare for the software giant.

Oracle's influence on technology development should not be underestimated. Despite all the hype around cloud services, many large companies still manage their databases through local data centers. Large companies that existed before 2000 almost certainly still use mainframes. The transition from any of them is difficult, and companies don't make such changes lightly.
Although the transition to the cloud is the way forward for many modern companies, migration can be time—consuming and very difficult, often with incomplete or unacceptable results. Successful migration can expand business opportunities, but the risk of failure is significant, and the high transparency that accompanies these large initiatives increases the level of vulnerability, because the likelihood of threats and attacks increases. Mission-critical systems often run the length and breadth of organizations, from low-level operational teams to senior management. Instead, many choose a step-by-step approach: leave the old Oracle systems in working order, but use a cloud web provider for new projects.

Cloud computing should offer a broad business strategy to companies in order to remain competitive and meet the needs of the market. Although that seems to be an attractive offer for both public and private enterprises, a number of problems remain insufficiently solved. Among the many problems discussed are the lack of standard interfaces and open APIs, the lack of open standards for the VM format and service deployment interfaces, as well as the lack of open formats for data exchange.
These problems lead to integration difficulties between services received from different cloud providers, as well as between cloud resources and internal legacy systems. Consequently, that makes it difficult for data and application services to interact and be portable. The difficulty that arises is a direct result of the current differences between the offerings of individual cloud service providers based on incompatible underlying technologies and standards.

In fact, cloud web hosting providers often offer their own solutions and proprietary interfaces for accessing resources and services. This heterogeneity of solutions of cloud providers (i.e. hardware and software) and service interfaces is a serious problem, since most of the current resources oblige the client to adhere to one cloud technology due to the high cost of transferring applications and data to the interface of another provider.
Heterogeneity of cloud computing is simply the presence of different hardware, architectures, infrastructure and technologies used by cloud service providers. Many providers provide services based on customized policies, infrastructure, platforms, and APIs that make the overall cloud landscape heterogeneous. Such variations make interaction, portability, and integration very difficult.

According to the research company Gartner, in 2020, Oracle's revenue amounted to $ 15.8 billion. The company does not disclose financial results specifically for its database business. But most of that revenue comes from the support and maintenance of existing companies, not from new sales. And more recently, TikTok started moving user data from the USA to Oracle web servers.
The move comes almost two years after the U.S. National Security Commission ordered ByteDance to get rid of TikTok over concerns that U.S. user data could be shared with the Chinese government. Therefore, at least in the foreseeable future, Oracle will retain its leadership.


The topic is not so much about Oracle as:
- Cloud vs On-Prem,
- and RDBMS vs others.

In my opinion, the problem is not in the storage location, not in the format and not in the structure, but in the competence of architects and developers. Hype solutions and an abundance of options easily disorient.
At all times there have been fashionable solutions, and rational solutions.
There have always been novelties in my memory: in the 90s object-oriented databases, in 00+ NoSQL, in 10+ Cloud DB and Serverless DB went.
Some solutions have caught on, some have transformed.

- understand all data storage options
- and choose the most suitable for your task

Backend and data storage are the most conservative part in the application architecture.
You can change the front-end, you can rewrite the logic, but the base, as a rule, remains unchanged because it is the foundation.
With all due respect to the fashion to write that on-premise data storage is no longer fashionable, slightly superficial. Each task has its own foundation, and the choice should be well thought out.
I wrote the first database application in 1993 and since then I have been working with databases in architecture and development.