Over the past months, we at Greyhound Research have received a ton of requests from our end-user clients to offer more product deep dives. Essentially, share insights that go beyond the usual 30,000 feet conversations and focus on products/suites that IT teams are currently exploring or using. In other words, insights sans management jargon and marketing hype. Hence we decided to launch Product Spotlight, a dialogue series wherein we host the real brains who are architecting products.
In this 3rd exchange (E03) of Product Spotlight, we host two leaders from Oracle India; Palanivel Saravanan, Vice President – Cloud Engineering Leader and Kapil Makhija, Vice President, and Head of Technology Cloud. Both gents spearhead the OCI business for Oracle in India and are responsible for ensuring the success of client engagements in the country. We quiz them on the length and breadth of OCI and why technology decision-makers should take it seriously.
P.S.: As the name states, this dialogue series is focused on a product/suite on which our analysts receive enquiry calls from end-user clients. We host the Product Managers and quiz them on features, roadmap, and more.
Greyhound Research: Thanks for taking the time to speak with Greyhound Research. We truly appreciate it. Just to get started, the last two years have been a transformative journey at Oracle. Right from Autonomous databases, the OCI has progressed from an architecture perspective, including your efforts to build local data centers. So, firstly, could you please talk about the key changes made to the strategy over the past two years? In addition, please share with us some of the key changes that have been made in the product roadmap and other business areas. It would also help to have a flavor of some noteworthy client wins you have had in the past year.
Oracle: From a strategy perspective on the technology piece, per se, we started in 2017 with a single region in Phoenix. Fast forward to today, we have about 38 regions across the globe. We have three key philosophies –
First, our regions across the globe are consistent. This means the architecture we built in Phoenix is replicated across all 38 regions.
So, the advantage to the customer is that whatever services we launch today in Phoenix or US East Coast will get deployed across the region the next day itself. That’s the first advantage. The second advantage to the customer is that we follow the principle that for each service, whatever we charge is consistent across the globe. This is the second principle we have followed, and it’s been consistent. We have been holding this principle for the last five to six years.
Our second key philosophy (or differentiator) is that each country has a minimum of two regions. The reason is most of our addressable market is enterprise customers.
Today, enterprise customers give us close to 90% of the business; for them, the secondary or the primary DR is very important for critical applications. And today, for any regulator or anyone building critical applications, this is a fundamental tenet of the solution. So, what we do is that in every country we operate in, we will build the two-region approach. So, for example, in JAPAC, Australia, Japan, Korea, and India, we have built two regions. Same in Europe. Same with the US as well.
The third philosophy we are focusing on right now is the multi-cloud approach. One such element is the Azure interconnect.
Again, our customer base is enterprise. And enterprise today, if you look at circa 2010, the on-prem days, two vendors occupied most of the data center space. One is Oracle for the critical instances. The other one is Microsoft for non-critical or surround application instances. And today Cloud has become a de facto as everyone wants to move. It’s no more a question of why Cloud; it’s about when Cloud. So, when customers choose to take the Cloud journey, they always have a kind of ambiguity in their minds. Should I go with Azure completely? or should I go with Oracle completely? Or should I go with somebody else? We know how enterprise applications have been architected, and we’ve been in the industry for the last four decades. That has helped us to work together with Microsoft and build this interconnect. So, the customer can choose to host their Oracle-centric application in OCI and the Microsoft-centric application in Azure and interoperate together. The customer will get a single pane of glass management, monitoring, and complete services, so they can provision wherever it could be.
Greyhound Research: How does it translate for India? Because not everybody has the appetite for one-is-to-one DR or doesn’t even need it. For example, FSI organizations have seven audits a year, so they need a near DR, plus it’s an RBI regulation. But someone like manufacturing doesn’t need a near DR; they can open to an edge location. So how do you deal with that? Because consistency comes at a cost.
Oracle:That’s a very valid question, and this is running in the minds of many large enterprises. The overall objective for us out here in India is to help customers in their digital transformation. And we are trying to simplify IT for them, drive business outcomes, and drive innovation for them.
In the on-premise world, DR is always 100%. And that’s a regulatory requirement. But, more than regulatory, they must invest because they must get to the production or primary workload in the event of any failure. With elasticity, they start with 10% and scale up on demand when there’s a need. With the complete platform as a service, they can scale up and down on a need basis in all the elements.
Here’s one example: the NSE, National Stock Exchange. Recently there was the NSE IPO, which was the mother of all the IPOs.
They wanted to host this application on-premise, for which they would have to invest a considerable chunk of money. And more than investment, it was about building the entire application and then getting it ready by the launch day. So, they chose to go with Oracle Cloud for two reasons. One was for performance because this application would hit the mega IPO, so they needed performance. The second was for security. These were the two reasons they chose Oracle as a Cloud of choice for hosting their application. During peak hours, they hit about 7000 TPS, which for an average IPO doesn’t exceed 1000. So, they got about seven times the TPS requirement and finished the IPO.
After the IPO, they brought their infrastructure down to a minimum scale, which a simple IPO can sustain. So, the point is that customers do not choose 100% DR anymore. They start with 10%, and they scale up and down on a need basis. Sometimes they choose the same policy for a non-production environment, like DB development or pre-production. Only when there’s a need for testing, do they scale up and go for 90% or 100% of the workload and then bring it down. One such customer is a private insurance company in the South. They work only nine to five, that’s about it. They shut down by five o’clock in the evening, which essentially brings down the cost.
Oracle is investing hugely in India. Of the 38 data centers across the globe, two are in India. One is in Mumbai, and the other is in Hyderabad. And both are in a different seismic zone, so our public sector customers can also use them. The important part is that investment is continuous from Oracle corporate.
We at @Oracle are adding one data center every month, in fact, 25 days, to be precise. So, by the end of this calendar year, by December 2022, we will have 44 data centers.Tweet
That’s a considerable investment, which Oracle Corporation is doing in Cloud specifically to help our customers onboard the digital transformation that they have in sight. We are providing services to all our new customers, as well as our existing customers, at no additional cost to onboard customers on Cloud. And that is a massive investment at no additional cost to all existing and new customers. That means the Cloud Engineering team here in the country, plus some of the resources at the back end will support customers out in India to onboard them on their Cloud journey.
Greyhound Research: What are the inclusions in that? Asking since you mentioned no cost, and we find that very interesting.
Oracle: So that means Cloud Engineering is going to help in the application architecture, go live migration, and complete handholding. And in fact, we go one step further ahead to train the resources at the customer end so that they can run the environment with minimal intervention from Oracle if they want to run the environment that way. So that’s another investment.
Greyhound Research: We assume that’s the named accounts you go after because that’s an expensive service.
Oracle:No, so that’s the power of investment that we are doing. And not only that but there is also another area of investment in India, specifically wherein we are building a startup ecosystem.
There are about four hundred-odd startups whom we work very closely with. Some of these 100-odd startups you’ve heard of are in India and have become unicorns.
Oracle has also contributed to their success because we have invested much with them. We have provided them with a lot of mentorship, venture capitalist connections, access to global markets, suggestions on cost reduction, and joint events. We have done all this with these guys to boost the startup ecosystem. So, the entire ecosystem is being built around Cloud so that our customer’s journey on Cloud becomes seamless and quite easy.
So, to add a point, you asked about the services we offer. I think one of the questions you asked was when a customer wants to take the journey to Cloud, what they should look at, for example, migration, day to operations, how the deployment has been secured, etc. So, these are the typical thoughts a customer runs into, engaging various people and spending a lot of money on the migration alone. Sometimes the migration takes more than six months to one year to realize the benefit of it.
We have formed a team called Cloud Life Services, which is part of the Cloud Engineering team. We engage from inception – from the design of the overall solution to the deployment, i.e., creating a landing zone, making it secured, and then doing some mock migration, actual migration, and go live. And this is not only for a specific set of customers. This is for all our Cloud customers using or moving to Oracle Cloud. We give this service at no cost.
Greyhound Research: So, this means that whether someone buys one module or, let’s say, five or ten modules or the entire SaaS suite doesn’t matter. One doesn’t need to be a named account to get this service.
Oracle: Coming to the value, whether the customer is USD 10,000, 100,000, or 1 million, we will support them with whatever is required. Obviously, million-dollar customers require larger transformation, so we will involve consulting because it’s not one application, it is going to be a plethora of applications. But why we provide this service for two reasons. One is for architectural consistency. Two, it is to realize the TCO or the ROI much faster so that they can realize the value of moving to the Cloud.
Greyhound Research: But it also ensures consumption at some point. If it’s architected well, the consumption is better, which means the renewals are better. But let us come back to something that Kapil mentioned. So, Mumbai and Hyderabad are great locations, but what about customers in Chennai? There are many financial services companies in Chennai, and we do a ton of work with these organizations, and for them, Coimbatore is a near DR location. If nothing else, they need a Point of Presence (PoP) region at a minimum and an edge location to comply with the RBI regulations. Also, worth to note that Chennai is a high seismic zone – only recently, there was a bad earthquake there – and it has poor real estate infrastructure. How do you work with customers based in Chennai who need a near DR and who wouldn’t touch Hyderabad or Mumbai since there are latency issues involved and network costs involved? Are there any plans to have more PoP locations or edge locations? How do you work with customers who do not want to move to Mumbai or Hyderabad and prefer Noida or Chennai, for that matter?
Oracle: Today, our largest install base is also coming from the locations you talked about. Some of them are in Chennai, and some of them are in Noida. All of them have moved their critical applications to Hyderabad or Bombay. One such example I can quote is Cognizant. They moved their entire core ERP system from on-premise, which is the data centers in Chennai and Pune, to Mumbai and Hyderabad. Today all the cities are interconnected with a high fabric fiber and low latency, so customers are ready to move to the public cloud.
But some customers come with this ask of “I want to have a near DR”; they are latency sensitive and want to be in the vicinity of 10 kilometers. So, we have two choices for them. One, if you have applications in monolithic architecture, you don’t need to have one physical environment in the near DR. We give them Oracle Cloud@Customer, which means we bring a small Cloud to their data center and give it to them. This solves their problem because it gives them the same model as the public Cloud, but it’s behind the firewall.
This Cloud@Customer option is pretty much what we have adopted in many of the customer sites.
What we are now doing is, we are building on the Cloud@Customer option, and we’re expanding it a bit. It was earlier only a database service; now, we have expanded it to application services. We can now carve out some racks in the public Cloud, put them behind the customer’s firewall, and give the complete service to the customer.
Greyhound Research: Do your partners like Airtel and ControlS and the others do the same thing? Because the shared hosting costs would mean much better infrastructure availability and lower cost arrangements as well?
Oracle: Our regions have expanded multiple times over the last two years. We have done this about four times in both Bombay and Hyderabad. We have expanded our partnership with Airtel and are hosting the entire expansion in the Airtel data center. With Sify in Hyderabad, we used a similar approach as well. So the point is, yes, Airtel is one of our strategic partners, and wherever the customer needs this approach, we always go with them and build this part.
At @Oracle we can give customers a fault-isolated region within the region. This means if there’s a power failure on one side, the other side or the other half of the region will have complete power. So, it’s a near DR environment.Tweet
Greyhound Research: Let’s now talk about Azure interconnect. While Azure is a fantastic partner to have, in a typical geo-distributed architecture, both traditional three-layer infrastructure and Hyperconverged infrastructure (HCI) are critical. Important to bear in mind that both are key asks from large customers considering the new-age Oracle stack. This makes the task of migration quite cumbersome and complex. This is consistent feedback we hear from customers. How do you work in these environments?
Oracle: There are two ways we are handling the migration approach for both the HCI and the Oracle database. We launched a tool called ZDM, which is Zero Downtime Migration. And we use it predominantly for all our database migrations. That’s our homegrown tool, and we have built it in our kitchen. So that gives the customers risk-free migration to the Cloud. That’s the first approach for the database. For Oracle-centric applications as well, we have built certain tools. For example, if you are running Siebel or if you’re running the E-Business Suite, we put a wrapper, and we build the migration approach of it.
This brings the question of the HCI, be it Nutanix, or SimpliVity, among others. Last year we announced the Oracle Cloud VMware Solution (OCVS).
Our OCVS solution is the customer-managed version, which means the customer can choose the version they are running. It can be either on-premises or bring up the same version in the Cloud itself. That’s where we stand apart from the other Cloud vendors. On top of that, we enabled HCX in VMware itself. This means they can choose the VMs on on-premises and move to the OCVS on the fly. So, we ensured that the VMware form is completely taken care of when they want to migrate from on-prem to the Cloud or back.
Now come to the other examples, which are maybe the Nutanix native versions or other VMs, typically built on Windows or Linux environments. We work with partners called RackWare, who give a solution that is a small, very non-disruptive piece of code that runs on the on-premise and migrates the entire thing to any format, be it OCVS in the OCI or a native VM in OCI. And today, many customers want to come out of this native hypervisor, be it SimpliVity or Nutanix. And when they want to come out, they need certain tools to move away to the complete Cloud native. And that’s what we’re doing with the partner solution, RackWare, and we move them to the OCI part.
At @Oracle, many of our customers are moving lock, stock, and barrel on Cloud. That means they’re moving not just one, two, or three workloads, but they have an entire data center exit strategy.Tweet
This includes the largest fertilizer company in the world today, IFFCO, which is based out of the north, and the biggest gold loan provider in the South, Manappuram. These companies have moved lock, stock, and barrel on Cloud. That means all these workloads, Oracle workloads, non-Oracle workloads, and VMware workloads, have seamlessly moved to Cloud. The good part is that we have seen some instances where VMware is also there in every data center, just like Oracle. And the good part about OCVS is that the migration is seamless; the application requires no change.
Customers can use the same tooling they’ve been using when running the VMware environment on-premises. They can move the entire environment to Cloud, run their DR using Oracle Cloud infrastructure, extend their on-premise, and have another environment with OCI. So, all that flexibility is there when we talk about OCI. That’s where customers are realizing more and more value when they talk about multi-Cloud with OCI.
Greyhound Research: You mentioned earlier that Oracle is building one new data center every 25 days, which is impressive. But tell us, how’s this translated into client wins or engagements, or has the frequency of client wins improved because of data residency? Please give us a way to measure how the investment in data centers has impacted client satisfaction and client wins.
Oracle: We have had to enhance the capacity of our data centers at least three times in the last three years because it has exceeded our expectations. Furthermore, we had to enhance our Mumbai data center, along with Airtel, last year because of a capacity constraint. The growth that we see in business is almost triple-digit growth consistently year-on-year. We have stopped measuring it yearly; that’s the kind of growth. Now we’re measuring it quarterly. It’s all because customers see tremendous value in this. In addition to significant cost optimization, our customers are getting operational efficiency and faster go-to-market using OCI.
Recently, we at Oracle have also trained almost 100,000 people in India without any cost to ensure that our customers get the required skill sets. The intent is to bridge that skill gap, which the industry needs.Tweet
Greyhound Research: Which of your product or services have done the best from a local data residency perspective? Can you please tell us what sort of customers are not choosing to host in India? Also, are there services Indian customers love the most to ensure local residency?
Oracle: The biggest bank in the country, SBI, is leveraging Oracle Cloud Infrastructure quite efficiently. The biggest private sector bank, ICICI, is currently exploring moving its UPI application to Cloud. With these transactions hitting 5 trillion a month, it’s challenging for all banks to manage that data. And since this workload is quite unpredictable, this can go up significantly. So, banks are struggling to build an ecosystem for that because whatever they built will get constrained in the next 3-6 months. So that’s the perfect workload to move to Cloud. The same is true for telecom companies, and Airtel is a classic example. They have recently used integration and some other technologies from Oracle. Similar growth stories are being witnessed with many customers across sectors.
Greyhound Research: Are they all locally hosted, or are some hosted outside the country?
Oracle: Most of these are locally hosted, except for some of our customers, like OYO rooms. Since they have global operations and multiple offices, they want to keep some of these instances in India and some outside. Cognizant is one example of some instances in India, some of which are in Europe and other parts of the world. So, it’s a mix.
And the additional benefit that @Oracle offers is that across these 38 data centers, we are transparent and consistent in our pricing. This helps customers predict costs better.Tweet
Greyhound Research: The conversation on consistency is an important one to have. Not every workload or industry needs five nines. And delivering five-nines comes at a steep cost which may make it unviable for many. Have you considered having a differentiated availability environment to reduce TCO? Is that part of the Oracle thought process?
Oracle: On the compute side, we have both Intel and AMD, half the cost of Intel, and then Ampere, which is 1/10 of Intel’s price. The customer can choose which to adopt; production can be in Intel, non-production can be in AMD, and DevOps can be in Ampere. That gives the customer flexibility. Similarly, on the database as well, we have our highest kind of ML-powered database system called Autonomous; our small DBCS is the Standard Edition. So, we give options to the customer to bring down the cost. You can say it’s horses for courses. They can choose their horse and then put it to work.
Greyhound Research: Can you please give a perspective on which partnerships are moving the needle for you? Is it VMware? is it Microsoft? And what’s working?
Oracle: VMware is quite a consumption guzzler workload-wise. We are going a lot after this. A lot of customers, primarily in banking, are where we have seen a movement of VMware on OCI. Banks, specifically, are exploring options wherein they can run DR on OCI. They’re also exploring that the same landscape they have for VMware on on-premise can be extended to Cloud for the production environment. So, all that is being explored.
The good part is that they will have complete control of the environment. They don’t need to make any changes to the application. It is truly a seamless lift and shift; they don’t need to spend effort and time learning about the tools since they can use the same tools to run. And all that is just one management console of Oracle. So that’s the benefit they are driving out of it. They don’t even have to share the root password with us, and all that security control is only with them.
With the acquisition of VMware by Broadcom, the traction is further gone up because many customers are looking forward to moving these workloads to Cloud. And they think that @Oracle’s OCI fits the bill for them.Tweet
Greyhound Research: You have your hypervisor as well. Wouldn’t that help to reduce dependence on VMware? Because it’s a good hypervisor that you acquired from Sun Microsystems. We spoke about VMware and Microsoft, but this conversation wouldn’t be complete if we did not talk about other hyperscalers. Of course, AWS is the big boy in the game, and GCP is quickly becoming the de facto for AI and ML use cases. In such a scenario, it’s a given that every customer would be using 5-6 different vendors. What is Oracle’s strategy with other hyperscalers? While interoperability with Microsoft is spoken about, what are the interoperability levels with GCP or AWS? Can you give me a sense of the hyperscaler strategy from a multi-vendor mix perspective?
Oracle: From the multi-Cloud perspective, we are working on a two-pronged strategy.
One is, like what we have done with Azure, you will get to know more about this over a period. Our wish list is to get other hyperscalers in the same partnership, which means we will also have to interconnect with them. That’s one part of the story. The other one is that, as you rightly mentioned, many customers have adopted a multi-Cloud strategy for various applications.
For example, they will choose Google if they want to do AI or ML. That’s a notion, we would say. We don’t want to comment on whether it’s good or bad, but it’s a choice. Windows workloads will be Azure or some data they will move. What we are looking at is we are building MySQL with HeatWave, which is the core of any Cloud native applications, and we are going to open it up to the other Cloud hyperscalers. That’s the point we want to look at. It’s not only us who will have a differentiator; MySQL as a product or service will have a differentiator.
On top of that, there’s going to be containerization.
For example, if we talk about it, RedHat has OpenShift, VMware has Tanzu, and many of them are making that as a development platform. So, what we are doing is we are coming up with a product called Verrazzano. Verrazzano is going to be our container platform, which is going to be across any Cloud. They can run, create, and build the container that can come and then host it out and move the containers across the hyperscalers. So, these are the two things we are doing from the multi-Cloud perspective.
In addition, we built an observability and manageability platform that will be the key for any Cloud deployments. And this is platform agnostic, and it takes care of the Cloud-native architecture, a monolith, or hybrid architecture, everything. So, we built that as observability manageability, not only for Oracle Cloud but to manage applications hosted out of AWS or Azure, or GCP. So that’s our multi-Cloud approach, and we are building it across with other hyperscalers.
Greyhound Research: Can you please share your perspective on the Edge locations strategy for India, especially now that the 5G spectrum has been auctioned? While you have Hyderabad and Mumbai, how do you plan to work with the Edge locations a little more aggressively and probably bring more locations into your fold?
Oracle: From our side, on the edge side of it, we have two products that we have already launched.
One is Roving Edge, which has disconnected or connected (can have two options) and has a bit of computing power to run the streaming workloads. For now, it is launched in a specific geography, and it will be available across geographies to meet the needs of all kinds. For larger Edge locations, our solution will be a mini DRCC (Dedicated Region Cloud@Customer), the one which we launched, which will have all the Cloud-native stuff, and that can give the capability of the complete services while ensuring availability. These are the two approaches we are riding on and aligned with our CDN partners. Airtel is one example, and another would be Akamai and other partners. We have built the overall edge ecosystem with them as well.
We at @Oracle believe, that Dedicated Region Cloud@Customer will be a big game-changer for India since only 20% of workloads have been moved to Cloud.Tweet
Still, 80% of workloads reside on-premise, and most of it is because of data localization and data sovereignty issues. Some of these mission-critical workloads have quite a low latency requirement, they must be processed at the same location, and DRCC fits the bill. The dedicated region, which we offer at customer premises within their firewall, within their premises is the solution for all these challenges they’ve been facing.
People who don’t want their data to go out, like some of these state governments, the public sector department, and some telecom companies, say that we cannot afford to take this data outside our premises. They have to offer Citizen Services transparently using the same data center, but the data must reside within that state itself. All these requirements can be met with this dedicated region Cloud.
Greyhound Research: What is Oracle’s standpoint on SD-WAN?
Oracle: Our approach is to have the best of both worlds. We are aligned with certain ISPs to serve our large enterprise customers. But many customers today are moving to this SD-WAN and have adopted specific partner solutions. We specifically don’t have any alignment, per se, but we port these solutions, and they typically work perfectly fine. Our Cloud is very open for them to port and runs it.
Greyhound Research: Okay, there are no application dependencies, no latency issues basis, the SD-WAN stack, you’re saying?
Oracle: No. There is a South gold loan company currently on OCI and using SD-WAN, and they have no such issues in the application. But then it’s built-in resiliency on the application layer.
Greyhound Research: Also, keen to get your perspective on Oracle Exadata in Oracle Cloud. Exadata has been a flagship offering for Oracle, but in India, it sells half a box and a quarter box and is used even lesser. So, the uptake of Exadata is always a question mark in many markets for Oracle. How do you see Oracle Exadata in OCI or Oracle Exadata Cloud at the customer going to impact the Exadata opportunity in the country?
Oracle: That’s a good question. Many of our customers are on our advisory board, and they come back to us and say that there’s a minimum uptake on Exadata, which sometimes becomes a difficult decision for them. They always want to go for Exadata, but they would need at least half the rack, one-eighth, or one-fourth of the rack. All those customers now have this offering, which is of great value for them, wherein they can leverage Exadata Cloud service.
The good part is that they’re getting the same value proposition, performance, and same advantage of Exadata on the Cloud. It’s giving them the best of both worlds, and they are getting the Cloud’s flexibility and the performance of an Exadata. So that’s where they have got a solution. And for customers who don’t want to move their data outside their premises, outside their firewall, we have Clouded customer Exadata, wherein we bring the Exadata as a service or a subscription model within their premises, and they can use it.
Greyhound Research: Exadata as a service or a subscription sounds interesting, but what’s the minimum billing per customer per annum for you?
Oracle: For Exadata Cloud service, there is no minimum uptake. It’s all consumption-based, and they can decide and go for it. You can start as low as maybe USD 1,000-2,000 and then ramp up on a need basis. However, if you want to bring the Exadata Cloud to the customer data center behind the firewall, the customer must pay a minimal infrastructure cost, which is very small and then zero; they don’t pay anything. After that, it’s complete elasticity and a pay-per-use model.
The next addition we’ve made is we brought in Autonomous, our AI-powered, ML-powered engine on the database.
It used to be only available in the OCI. Now, the customer can also choose to use it on the Exa Cloud@Customer. Customers don’t need to choose only a public Cloud for Autonomous. They can also use it in the existing Exa Cloud@Customer and power the Autonomous database.
So, the Exa Cloud service has no entry barrier and minimum uptake. So, any customer can use it for that matter, and the important part is they can burst these services, whenever there is a peak load. They need not run it at the standard level and can bring it down after a peak load. On every month-end, quarter-end, and year-end, for these instances, they can do the bursting and bring it down whenever they don’t need those services. This is quite cost-effective, and that’s where customers realize the good value.
Greyhound Research: If one shift happened in COVID, it was the need to work with new metrics like cost-to-serve. Can you please explain how these new metrics are impacting your business? Also, how is Oracle encouraging customers to consume more from the Cloud?
.@Oracle did a major transformation last year, wherein the entire sales team gets measured on Cloud on consumption. There was no credit for booking last year.Tweet
For us, customer centricity is the key, and all the investments we have discussed till now are to ensure that our customers get the feel of the Cloud seamlessly. We also talked about the Cloud Lift Services, which are at no additional cost to our customers. This service aims to ensure smooth customer onboarding, increasing satisfaction to ensure they onboard more workloads.
We know high customer satisfaction has a spiral effect on workloads. So that transition from a sales-driven organization to a consumption-driven organization has yielded great results for us. And that’s why I talked about the growth we have seen, like triple-digit growth every year. Now we’re measuring it quarterly. This growth has been made possible because of our relentless focus on customer-centricity and consumption.
Greyhound Research: How does this change in the thought process, or the guiding philosophy of consumption change engineering and product development? Also, one of the biggest struggles for Indian customers has been the lack of tailored features and functionalities. Can you give me a sense of the change in Product Development and Engineering to help bridge this gap?
Oracle: One change we have seen in the product management and development team is that their interactions with customers have increased significantly. Some of these large global 500 companies are part of our customer advisory board, and we get a lot of insight from them on some of these complex problems. So that part is being addressed. But we have seen a lot of engagement happening in countries like India because it has almost 40,000 Oracle employees. And this team is working on some of these products, which are the core products for Oracle. And not only that, but we also provide services and support to all our global customers in India. And the product management team transparently shares the product roadmap with customers and is open to making changes to it. So, this flexibility, which was not there till a few years ago, is happening more for Indian customers now.
In @Oracle Cloud, we have moved from 10 services to almost 81 live ones. That shows the pace at which we are innovating and launching services for every customer, for every requirement.Tweet
Also, our regions in India are MeitY empaneled to address data residency concerns. In addition, most of the services we launch are India stack compliant. That’s how we fulfilled the local regulatory requirements, which are made tangible by aligning with the engineering team.
Greyhound Research: Keen to understand how you democratize DevOps and build momentum for Cloud-native developers. These are new-age developers who necessarily do not relate to traditional vendors. How are you encouraging these Cloud-native developers to use OCI?
Oracle: We have trained so far 100,000 people on OCI. And it is not only about OCI as an infrastructure. We have close to five sets of certifications available for anybody to get trained. One is for the developer tools, OCI for DevOps, wherein we build the tool sets and the complete automation, including the standard TerraForm, Ansible approach, and then build the complete Cloud native architecture. So that’s one certification that we activated.
The second set is about how we fast forward on this part. It is about Low Code. So, we built our complete Low Code platform, which is added to the database, and the customer can build a Low Code in no time. APEX is our Low Code platform, which many customers have widely consumed. And today, the developers are more into building complex applications (I won’t say Netflix equivalent, but such complex applications). And they must deal with both the front-end and back-end, whereas we have a complete DevOps pipeline building. They are called Dev CS, Developer Cloud Service, where we give the complete pipeline to the customers or developers to run this.
And most importantly, when developers choose the code, they also look at the database platform. Typically, they use Mongo and Postgres for the data store and various databases. While the developers like to have hands-on experience with many databases, it is complex to manage over a period. That’s when we realized and brought the converged database into the picture. This means a single database, which has the API compatibility to give you Mongo compatibility, gives the JSON feature, provides the non-relational SQL format, Blockchain, and many more. That gives the developer one single database with all the functionality at the data store level with the pipeline, and they can build applications much faster. That’s the OCI strategy, which we always discuss at all the developer forums.
Low Code has become a big hit with customers because most customers today want to build and manage the show quickly. Sometimes it’s critical, and sometimes it meets the business purpose. So there, APEX fits the story very well. And today, many customers have built their complete application on APEX itself.
Greyhound Research: Since we are talking DevOps, this conversation will be incomplete without talking about open source. It’s no secret that Oracle’s position on open source has been rather two-faced. While the company has opened Java development at one end, it joined the Cloud Native Computing Foundation (CNCF) to up its support to open-source Kubernetes and has long supported and contributed to Linux. But on the other hand, the company has been forcing the US government to consider that there is no math behind open source. So, the open-source standards of Oracle have always been a big question mark. In addition, one cannot forget the decade-old battle between Oracle and Google on open source. So, our question is that there is a large amount of cynicism in the developer community regarding Oracle and its stand on open source. So how would you position Oracle’s strategy on open source, especially when speaking to the developer community that loves it?
Oracle: So, from the open source perspective, you rightly mentioned CNCF. And in the OCI, all the services we build, be it function, be it streaming, or be it AI or ML, all of them are open source, and we strongly embrace open source. Our ideology is we have been a platinum sponsor of CNCF, Cloud Native Computing Foundation. As part of that, we contribute to CNCF and take from CNCF. For example, in Kubernetes, we take it from CNCF, modify it, put it in our Cloud, give it to all the customers and contribute back to CNCF, which the customer can choose to take and run it on-premise as well. Same for functions and streaming services as well. Our streaming services are Kafka compliant, and customers can take it and run it on-premise or run it in the DRCC, which is behind the firewall. So that gives complete portability across the environment; that’s number two.
Number three is why we built all the Clouded services in open source and want to contribute back. It’s humanly impossible for a developer to manage or maintain the versions of open source and follow the CNCF model, decide which version to choose and what to do, and that too on a plane at thirty thousand altitudes. So, it’s challenging for them to be up to sync.
We ensure that we are part of CNCF, take the code, modify it, build for consistency, and give it back to the customer. And we allow developers to choose, for example, Jenkins. We build a set of Jenkins versions, which we give to the customers as part of the Dev CS service. Same with function and the same with streaming. Our OCI is entirely open source based architecture. But the point is, it’s all Oracle embedded, and we sponsor it back to the CNCF community.
Apart from the developer community, many customers are rewriting the application, modernizing using Kafka, Kubernetes, and serverless architecture, and @Oracle plays the role of an open Cloud solution provider.Tweet
Greyhound Research: Now, let’s talk about your efforts to onboard new relationships in terms of partners. While we’ve seen a concerted effort to work with Airtel, can you give us a sense of the partner strategy to onboard some of these new-age partners to develop the multi-Cloud solutions on OCI or provide them certifications?
Oracle: The good part is that we already have a partner ecosystem. But we fully understand that this partner ecosystem might not be sufficient. We are seeing a lot of niche partners in this space, in fact, and there are industry-specific partners, as well. If we talk about the public sector, we have recently had some great wins. In utilities, we work very closely with Quest Corp, who have expertise specifically in that area. We recently won UP Power Corporation Limited in the country’s biggest state. It’s a metadata management solution, and it’s a very niche expertise that is unavailable to all the partners. So, the intent is to build partners like Quest Corp and replicate that across the country. We are trying to do that in the country, be it in Manufacturing, Telecom, or BFSI space. We are working with many FinTech companies that you talked about, a lot of ISVs, and trying to see if we can replicate it across the length and breadth of the country.
Greyhound Research: What has happened is that a lot of traditional licensing partners are not able to move up the value chain, and they are using predatory pricing behavior to win deals. How do you ensure the customer doesn’t get caught in these predatory practices?
Oracle: Most of the time, it’s not just the tech Cloud sales; it’s a turnkey project, and customers generally look for a measurable business outcome from any project, for that matter. So, the Cloud component is one piece of it, but more services are attached to it. So, it depends from project to project, and every partner has some role to play. It’s what the customer intends to go ahead with. If a customer wants to go for complete outsourcing, then obviously partner has a much broader role to play. Some customers come back and say we are going to manage it ourselves. We have a big IT team, and we will manage the updates, upgrades, patches, and everything. Then obviously, they go ahead with a very limited piece, and partners have a minimal role in the transaction.
In this entire scheme of things, the market is so huge that every partner has a decent role to play.
And the important part is that these traditional Oracle partners know most of these customers are looking forward to migrating these workloads to Cloud. They know where to go, have the strength of relationship, and understand the account and ecosystem, the dependencies, the complexity, and the challenges. So, they are in the best position to move those workloads if they work closely with those customers. We are enabling partners with training, tools, and handholding to ensure a win-win.
Greyhound Research: Since we’re talking about the movement to the Cloud, many of these customers have got traditional licensing for on-premise environments. And we’ve already heard BYOL (bring your own license) to the Cloud quite a bit. So, in closing, can you please share with the CIO community specific takeaways and best practices on BYOL?
Oracle: We are incentivizing our customers a lot. That’s the reason we have an offering called Oracle Support reward. So many customers came back to us saying they spend most of their yearly expenditure on keeping the lights on, and very little is left for the innovation part. So, most of it goes into operational expenses itself. Our intent at Oracle is to flip that ratio so that they spend more on innovation, and less on operating expenses. So, for example, if any customer is paying X amount to Oracle, and if they are moving to Cloud, we compensate them. We reward them with 25% credits once they consume it. And if it’s an unlimited License Agreement customer or EULA customer for us, the rewards are even higher, to the tune of 33%. As a result, so many customers across the globe have reduced their support costs to almost nil in the last few quarters. That’s a significant benefit for all the customers out there.
The second is the bring-your-own licensing pricing. That pricing is substantially lower when you compare it with our license-included pricing.
This price is approximately 1/4 of our other license-included pricing, that’s a significant advantage for our customers. This varies from one-fourth to one-sixth based on the services the customers will use. So, these are substantial advantages for existing Oracle customers. And this is over and above the other services these customers can leverage.
In addition, from an incentives perspective, when the customer uses the BYOL option, their database is completely secured, irrespective of whether they have chosen the option or not. In OCI, every data that gets entered is encrypted by default. This means the customer can use Oracle Keys or bring their key and completely encrypt the database in the event. And we told you about the converged database, so they don’t have to adopt multiple databases for various innovation elements. They can choose the Oracle database with the Bring Your Own License option and activate those things, be it a JSON database, or be it a Blockchain, or a no SQL database. All of them are one single converged database, which they can choose to run and host all the applications over there.
Greyhound Research: This conversation has been genuinely insightful. Thank you so much once again for your time!
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