Oracle adds compute services to its Cloud@Customer offering

Oracle is adding a new managed offering to its Cloud@Customer platform that will allow enterprises to run applications on proprietary optimized infrastructure in their own data centers to address data residency and security regulations and solve low-latency requirements.

Dubbed Oracle Compute Cloud@Customer, the new offering runs on the same optimized hardware as the company’s Exadata Cloud@Customer offering, which is designed to run Oracle Autonomous Database Service and Oracle Exadata Database Service in an enterprise’s data centers.

The hardware, according to the company, will come at an approximate cost of $10,000. The infrastructure will be managed and operated by Oracle.  

Enterprises will be able to use the Oracle Cloud Infrastructure (OCI) Console and other tools to control data locality, replication, and backups along with the local consumption of OCI services, the company said.

The new offering includes over 100 OCI services and enterprises will be able to choose services depending on their requirements.

Enterprises will however need to pay for OCI services that they consume, Oracle said, adding that the pricing will be the same as that of services consumed under OCI’s Gen 2 public cloud.

Enterprises will also be able to use the same credits (Universal Credits) to consume both public and on-premises OCI services.  

Countering competition with pricing

Oracle Compute Cloud@Customer offers the company a price advantage over rival offerings, according to Ron Westfall, research director at The Futurum Group.

Oracle’s new compute offering could help the company broaden its addressable cloud market while directly countering the on-premises products from the likes of AWS, Azure, and Google Cloud, Westfall said.

While Oracle Compute Cloud@Customer is priced at $53 per core per month, rival offerings, such as AWS Outposts and Google Distributed Cloud Edge are priced at $143 per core per month and $84 per core per month, respectively.

The new on-premises offering is also expected to deliver high growth in the dedicated cloud infrastructure-as-a-service (IaaS) market, according to IDC Research Vice President Dave McCarthy.

The dedicated cloud IaaS market is expected to reach $20.5 billion in 2026 with a compound annual growth rate of 112%, according to IDC.

“Enterprises have realized that not every workload performs optimally in a public cloud region. At the same time, these companies have invested in modernizing applications with cloud-native architectures. Dedicated cloud IaaS allows enterprises to retain these investments while giving them more flexible deployment options,” McCarthy said.

Both McCarthy and Westfall expect enterprises already subscribing to Exadata Cloud@Customer to adopt the new compute offering, which could mean a sizeable uptake.

“Exadata Cloud@Customer’s uptake is massive as it has been available to the Oracle customer base since 2008 and on Oracle Cloud Infrastructure since 2015. As such, I understand over 80% of the Fortune 1000 use Exadata,” Westfall said.

Another reason for the uptake, according to McCarthy, is Oracle’s support for a high-bandwidth direct connection between Exadata and Compute Cloud@Customer.

Alternative to Oracle dedicated cloud region

Oracle’s new Compute Cloud@Customer offering can be seen as an alternative to the company’s dedicated cloud region, which offers full-service parity with public regions, McCarthy said.

“In contrast, OCI Compute Cloud@Customer can be deployed in smaller increments with a subset of services at a lower price point,” McCarthy added.

The service was launched as an alternative to Oracle’s dedicated cloud region offering after many enterprises requested a dedicated region but did not match the eligibility requirements needed to set up such a region. The new offering, which has been made generally available, was first previewed in July last year.