Oracle is the fastest-accelerating cloud provider out there, an analyst report finds — but it's still lagging versus Amazon and Microsoft, despite its database market dominance

Oracle is the fastest-accelerating cloud provider out there, an analyst report finds — but it's still lagging versus Amazon and Microsoft, despite its database market dominance

September 14, 2020
  •  Oracle's growth is the fastest of all the major cloud platforms, a Gartner analyst says.
  • That's good news for the database giant, which has renewed its push to gain ground on market leaders Amazon and Microsoft after long lagging behind them in the cloud wars.
  • Oracle has been investing in its technical capabilities, its global expansion, its hybrid cloud strategy, and in hiring more cloud engineers, including ones from Amazon Web Services and Microsoft.
  • If Oracle's bid to become the "trusted technology partner" for TikTok goes through, those capabilities would also come in handy for the viral video app.
  • However, Oracle still hasn't reached widespread adoption and some customers have said they wanted to limit their adoption of Oracle, Gartner says.
  • Visit Business Insider's homepage for more stories.

While the cloud market revolves largely around Amazon, Microsoft, and Google, analyst firm Gartner finds that the fastest growing cloud is actually Oracle.

Gartner recently published its annual "Magic Quadrant report that ranks cloud services like Amazon Web Services, Microsoft, and Google Cloud with categories like "ability to execute" and "completeness of vision."

 Out of all the cloud players, Oracle has accelerated the fastest in terms of its capabilities this past year, says Raj Bala, research director at Gartner, while also showing strong growth in customers adopting its services. On the chart, Oracle is labeled a "niche player" and lags behind leaders like AWS, Microsoft, Google Cloud, and Alibaba Cloud, but it's well ahead of IBM and Tencent Cloud in terms of its "ability to execute."

"[Oracle] actually accelerated the fastest," Bala told Business Insider. "That's probably one of the biggest surprises of the year."

The report comes after Oracle scored a major win in landing the runaway videoconferencing success story Zoom as a customer — and now it's poised to become the "trusted technology partner" to viral video app TikTok in a much-watched deal, too, assuming the controversial deal passes muster at the White House.

Oracle also just reported its quarterly earnings on Thursday, when shares rose as much as 6% after Oracle beat Wall Street's expectations and reported 2% growth in revenue from this time last year, compared to a decline the previous quarter.

Oracle has also been building out more data center regions around the world, including in the Middle East, where many customers already use Oracle products. It's also the only major cloud player that has a data center in Saudi Arabia, which has been a challenge for other cloud players to break into due to geopolitical tensions.

Also, unlike its competitors, Oracle delivers all its capabilities in all its regions worldwide, Gartner says. 

A turning point for Oracle

While Oracle has largely remained far behind AWS, Microsoft, and Google Cloud in terms of cloud market share, Oracle is making moves to catch up, Bala says. 

The turning point came around five years ago, when Oracle came to the realization that the original incarnation of Oracle Cloud Infrastructure wasn't cutting it for customers and not competitive with giants like AWS and Microsoft, Bala says. After that, Oracle went on a hiring spree in Seattle and snapped up former AWS and Microsoft engineers to build what it calls a new generation of Oracle Cloud Infrastructure. 

"They recruited top talent and said to engineers, if you can rebuild AWS knowing what you know now, what would you do?" Bala said. "They got the engineering talent to do things like accelerate the fastest of any of the providers we measured. It can be done. It's paying off for Oracle both in terms of market share, customer traction, and capabilities."

On top of that, Oracle has made "significant enhancements" in the past year, Gartner says, allowing it to better help customers move their work onto the cloud or a hybrid cloud, where users partly store their data on the cloud and partly in private data centers. 

Bala says the prospect of a TikTok partnership could be a further feather in Oracle's cap, giving it a big marquee customer about which to boast — similarly to how Microsoft-owned LinkedIn has started moving over to the Azure cloud, three years after the acquisition closed.

"It's certainly great for TikTok that Oracle has additional capabilities comparable with the larger providers, but getting high-scale usage out of the core [Oracle Cloud Infrastructure] platform is an equally important motivation," Bala said. 

Oracle still hasn't reached widespread adoption in its cloud products

While Oracle has made major gains in its cloud capabilities, the company still hasn't reached the widespread adoption enjoyed by its competitors. And despite Oracle's dominance in the database market, it still has a low market share when it comes to cloud database platforms, Gartner said. 

Customers are still cautious about Oracle as well, with some customers citing negative experiences with the company. Gartner's report mentions that some customers interested in taking advantage of Oracle's interoperability partnership with the Microsoft Azure cloud were more interested in using it to limit their use of the database giant's services and increase their investment in Microsoft.

Read more: IBM and Oracle are so far behind in the cloud, they might stop trying to compete with Amazon altogether and go a different route, analyst says

Still, many companies worldwide have yet to move to the cloud. And as Oracle expands worldwide, it has potential to win over even more market share.

"There are still parts of the world that are still up for grabs," Bala said.

Business Insider has reached out to Oracle for comment. 

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