Cloud as technology bookend

Public cloud services are well-known for hitting the middle of the bell curve. General purpose hardware can be replaced by virtual machines in any cloud offering. It makes sense to target this beefy middle. While the margins might not be the best, there’s an unbelievable amount of volume.

But Oracle’s recent earnings call got me thinking about the ends. Oracle continues to insist, despite a lack of evidence, that they’re a legitimate player in Infrastructure-as-a-Service. Oracle is cutting jobs in their hardware business, which has lead some to believe that SPARC processors will primarily  be used in Oracle’s cloud offering.

If that is indeed the case, that signals a surrender of sorts. X86 rules the CPU market these days, and Oracle must see the writing on the wall. As SPARC-based hardware reaches end-of-life, many customers will look to other options. A SPARC cloud gives Oracle a way to convince customers to stay on the platform, at least for a little while, and also helps drive IaaS usage.

This is similar to how I perceive the VMware/Amazon partnership announced last year. Customers are given a gentle exit ramp for a technology that is becoming less relevant, while the vendor gets to extract as much revenue as possible. Public cloud services can serve the tail end of the market, so long as there’s enough usage to keep a minimum offering.

But the cloud can also be where new hardware becomes mainstream. For example, both Amazon and Microsoft Azure have brought field-programmable gate array offerings to market. FPGAs are not new, but they’re certainly not mainstream. Amazon and Microsoft both see them as a worthwhile investment. With easy access to try them out, customers who might never have tried using FPGAs may soon find them indispensable. Once a new technology has a sufficient toe hold, a public cloud provider can give it the boost it needs to reach a mainstream audience. Or it may flop. That can happen, too.

In any case, the bulk of public cloud offerings will sensibly remain focused on the mass market. But don’t be surprised if offerings at either end become more numerous.

2 thoughts on “Cloud as technology bookend

  1. As much as I hate to say it, it makes a lot of sense for Oracle to get out of the SPARC business as push folks hard to use their cloud for DB needs.

    Of course, their DB is so bloody expensive their cloud offering looks cheap.

    Of course, they also have APEX which is some sugar to entice the unwary developer into their cloud offering.

  2. I agree. Oracle’s decision makes perfect sense for them. One interesting rub is that the x86 hegemony may be coming to…if not an end, at least a reduction. POWER and ARM architectures are making some inroads, at least for some use cases. I don’t know enough about the architectures to know how SPARC compares, but I find it interesting that Oracle could have been in on this if they had put more effort into SPARC instead of letting it go. Even if they weren’t getting out of the hardware business, it’s probably too late now.

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