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If you haven't noticed, I am have positive on Oracle's Cloud Infrastructure (OCI) and havewritten several articleson the topic. That was not always the case. I was very critical of Oracle Cloud V1.0.

OraclesGeneration 2 Cloudisan entirely new infrastructure developed from the ground up with no resemblance to its predecessor. The design goals werebetter performance, pricing, andabove all elsesecurity.Oracle Cloud V2 is a significant improvement, more competitive, and the reason I have had a change of heart.

A year ago, in aJanuary 2021 article, I wrote, "In my view, Oracle has come a long way since Cloud V1.0, and the product is better than the market perception right now. You heard it here first. Over the next 12 to 18 months, the story will keep getting told, and you will see more key customers choosing Oracle.

A year on,it is high time to take stock of that prediction and see where OCI stands in the marketplace.

Oracle

OCI by the numbers

Oracle reported stellarQ2 earningsdue tocontinued and increased global demand for the cloud business.

The increase in OCI consumption revenue was 86% in constant currency, with total cloud customer revenue up 45%.Those are impressive numbers compared to the largest IaaS and PaaS companies. I can only imagine the disruptive transition to aconsumption-based business. Customers only pay for cloud services when consumed. A simple pay-as-you-go concept, but it changes the entire sales cycle.

And, customer momentum appears to be broad-based. Enterprise and cloud native customers are running mission-critical workloads on OCI. Oracle's sample of those customers is Deutsche Bank, Pernod Ricard, Bayer, Aviva, Santander Bank, Telefonica Brasil, Quest Diagnostics, Bechtel, Carrefour, Liberty Global, Ingersoll Rand, and the National Stock Exchange of India.

Oracle is also making strides with cloud-native companies like Kaltura, SoundHound, and independent software vendors such as Telestream, Thomson Reuters, Kaltura,Crunch Mediaworks, Ericom Software, Fastly, and SCC Soft Computer.

Oracle also continues to expand its sports partnerships with teams like theGolden State WarriorsandRed Bull Racingto showcase how those organizations are using Oracle Cloud to gain a competitive advantage on and off the court and track. Its why Oracle partners not only with individual teams but, in certain cases, entire leaguessuch asPremier LeagueandSailGP.

The industry is taking notice too.Oracles score in a recent Gartner Scorecard reportjumped to 78%ahead of Google.

Why the continued momentum? Below I dig into the reasons why I think OCI is gaining momentum.

Equivalent performance and latency in the cloud

At the very least, you expect comparable I/O performance and latency. OCI featuresisolated network virtualization, essentially moving network and IO virtualization out of the server stack to network. The result is dedicated hosts with no hypervisor overhead, interference from other servers, or shared resources with a complete software-defined Layer 3 network topology. Off-box network virtualization enables bare-metal, VM's, containers, and databases to run on the same set of APIs with the cloud-native security and governance of a Layer 3 virtual network.

OCI addresses latency concerns witha flat non-blocking network based onClos network topology(named after Charles Clos). Predictable data rates reduce the number of routers and switches that data has to pass through.

OCImeets enterprise requirements for database clustering (including OracleReal Application Clusters(RAC),Exadata, VMware, compute clustering (RDMA), and tenant isolation.

Easing migration of enterprise workloads

Migrating enterprise workloads to the cloud is non-trivial. Oracle hasthe Cloud Liftprogramthat offerstechnical expertise and white-glove services to help customers move to the cloud at no additional cost.More than1,000 global companieshave already used the program.

Financial incentives are possible withOracle Support Rewards, which enables new OCI customers to reduce software license costs, even down to zero.

Oracle Support Rewards is a program where you earn $0.25 to $0.33 in rewards for every $1 you spend on OCI. Rewards are applied to reduce your technical software license support bill. The $0.33 bonus is applicable if you are anUnlimited License Agreement (ULA)customer.

If you use Oracle's on-premises software, you become eligible for Oracle Support Rewards when you place aUniversal Credit orderand begin consuming OCI.

Redefines the Telco cloud market

Oracle continues to introduce new solutions and recently announced Oracle Cloud for Telcos, a comprehensive set of cloud solutions built on OCI, that provides telcos with an exceptional customer experience and helps drive new opportunities for growth.The solution takes advantage of Oracles decades of experience working with global telcos to support their critical data systems, applications, and network operations.Oracle has already started with key partners likeTIM (Telecom Italia),Bharti Airtel, andTelefonica Espana.

Strong support for regions and hybrid clouds

I believe the customer experience is better when the cloud resources are closer. It is that simple. Additionally,business continuity and compliance requirements dictate that applications run across geographically separated locationsoften without having sensitive data leave the country. Oracle has invested in significantGlobal cloud region expansionacross 30 commercial and seven government cloud regions in 14 countries. Oracle opened sevennew cloud regions alone in the last three months -Israel,Marseille,Abu Dhabi,Milan,Stockholm,SingaporeandJohannesburg.

Customers can run thecomplete portfolio of public cloud servicesandOracle Fusion SaaSapplications on-premises withDedicated RegionandExadata Cloud@Customer. At the edge,Roving Edge Infrastructurewith ruggedized devices enables cloud computing at the edge of networks and disconnected locations.

Notably, Oracle also sees strong hybrid adoption from customers like Deutsche Bank, Volkswagen, and Marsh McLennan.

TheOracle and Microsoft Azure interconnectdelivers a mostly seamless and private interoperability for the many customers running multi-cloud environments.Oracle now has 10 interconnects around the world with the recent addition of South Korea and Phoenix.

Oracle joined forces with Cloudflarein the Bandwidth Alliance toeliminate unnecessary data transfer feesand ease the path to multi-cloud.

Continued innovation on the platform

OCI introduced hundreds of services and features over the past year. Here are just a few that caught my attention.

Oracle Cloud for Telcosis a comprehensive set of cloud solutions built on OCI. The OCI platform runs Oracle Fusion Cloud Applications Suite, Oracle Communications core network and B/OSS solutions, and more than 60 other industry application suites, as well as third-party and custom applications and workloads. It enables telcos to build new applications or modernize existing workloads with 80 plus cloud services, including data management, developer services, analytics, and artificial intelligence.

Oracle Cloud for Telcos enables any telecommunications provider to become more agile, reduce capital expenditures and operating costs, and establish a flexible foundation for innovation. Telcos can:

Applying artificial intelligence (AI) to applicationswithout requiring data science expertise is the goal of introducing anew set of AI servicesfor OCI. Prebuilt text recognition and anomaly detection models are now available to all OCI customers, once again at attractive prices. High query performance at scaleincluding provisioning, data loading, query execution, and failure handling is now possible with anew MySQL Database service with an in-memory query acceleration engine calledHeatwave.For the first time, MySQL customers have a unified platform for Online Transaction Processing (OLTP) and Online Analytics Processing (OLAP) to run mixed workloads or real-time analytics.

Oracle introduced a new service calledOracle Autonomous JSON Databasethat automates database provisioning, securing, scaling, and tuning to reduce the risk and cost of human error.Oracle Autonomous Database scored the highest in all four use cases in the2020 Gartner Critical Capabilities for Cloud Database Management Systems for Operational Use Cases.

I would be amiss not to mention security innovations in the public cloud. Oracle'sphilosophy has always been to build security into the core product. Security features such as encryption are default enabled. There is alist of security featuresto numerous to list here that come free with the product.

Oracle also provides additional capabilities likeSecurity Zonesso administrators can automatically set up and enforce security policies across cloud compartments within OCI.

Finally,in August 2021, Oracle also released theOracle Cloud Infrastructure (OCI) Cloud Adoption Frameworkto better support customers in their cloud adoption journey. The framework was created as a resource rich center serving anyone who wants to further their cloud knowledgefrom a tech operator to a CIOand as an opportunity to learn more about OCIs unique capabilities. Recently, Oracle enhanced delivering the framework by creating theOCI Cloud Adoption Framework technical site, which hosts relevant technical content, assets, and tools to better enable organizations shifting to the cloud. The site includes templates for cloud business strategy documents, reference architectures for specific scenarios,landing zonescripts to accelerate cloud deployments, and showcases the latestOCI Governance Model.

Wrapping up

I should probably quit my predictions while I am ahead, but clearly, Oracle is making many of the right moves in the cloud space, and customers are voting with dollars.

One area I will be closely looking at OCI in 2022 is its integration of Arm-based instances to lower its customers cost of compute. Cloud companies like AWS have fully embraced the technology and Oracle has to watch this carefully. I will also be looking at composable memory architectures in a future version of OCI where customers can add more memory on-demand without having to add a compute instance.

It will be interesting to check back in at the end of 2022 to review the OCI scorecard.

Note: Moor Insights & Strategy writers and editors may have contributed to this article.

Moor Insights & Strategy, like all research and tech industry analyst firms, provides or has provided paid services to technology companies. These services include research, analysis, advising, consulting, benchmarking, acquisition matchmaking, or speaking sponsorships. The company has had or currently has paid business relationships with 88,A10 Networks,Advanced Micro Devices, Amazon,Ambient Scientific,AnutaNetworks,Applied Micro,Apstra,Arm, Aruba Networks (now HPE), AT&T, AWS, A-10 Strategies,Bitfusion, Blaize, Box, Broadcom, Calix, Cisco Systems, Clear Software, Cloudera,Clumio, Cognitive Systems, CompuCom,CyberArk,Dell, Dell EMC, Dell Technologies, Diablo Technologies,Dialogue Group,Digital Optics,DreamiumLabs, Echelon, Ericsson, Extreme Networks, Flex, Foxconn, Frame (now VMware), Fujitsu, Gen Z Consortium, Glue Networks, GlobalFoundries, Revolve (now Google), Google Cloud,Graphcore,Groq,Hiregenics,HP Inc., Hewlett Packard Enterprise, Honeywell, Huawei Technologies, IBM,IonVR,Inseego, Infosys,Infiot,Intel, Interdigital, Jabil Circuit, Konica Minolta, Lattice Semiconductor, Lenovo,Linux Foundation,Luminar,MapBox, Marvell Technology,Mavenir, Marseille Inc, Mayfair Equity, Meraki (Cisco),Mesophere, Microsoft, Mojo Networks, National Instruments, NetApp, Nightwatch, NOKIA (Alcatel-Lucent), Nortek,Novumind, NVIDIA,Nutanix,Nuvia (now Qualcomm), ON Semiconductor, ONUG, OpenStack Foundation, Oracle, Panasas,Peraso, Pexip, Pixelworks, Plume Design, Poly (formerly Plantronics),Portworx, Pure Storage, Qualcomm, Rackspace, Rambus,RayvoltE-Bikes, Red Hat,Residio, Samsung Electronics, SAP, SAS, Scale Computing, Schneider Electric, Silver Peak (now Aruba-HPE), SONY Optical Storage,Springpath(now Cisco), Spirent, Splunk, Sprint (now T-Mobile), Stratus Technologies, Symantec, Synaptics, Syniverse, Synopsys, Tanium, TE Connectivity,TensTorrent,TobiiTechnology, T-Mobile, Twitter, Unity Technologies, UiPath, Verizon Communications,Vidyo, VMware, Wave Computing,Wellsmith, Xilinx,Zayo,Zebra,Zededa, Zoho, andZscaler.Moor Insights & Strategy founder, CEO, and Chief Analyst Patrick Moorhead is a personal investor in technology companiesdMYTechnology Group Inc. VI andDreamiumLabs.

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Oracle Cloud Had A Banner 2021 And Now Very Credible - Forbes