Most IT executives are well practiced at the art of using the terms and conditions offered by IT vendors that are trying to gain market share to force rivals to provide them with a better deal. In the age of the cloud, the vendor offering the most aggressive terms and conditions at the moment appears to be Oracle.
Oracle has launched an Oracle Support Rewards program that provides customers with anywhere from $0.25 to $0.33 in rewards and bonuses for every $1 spent on Oracle Cloud Infrastructure (OCI). As part of the program, an organization commits to spend over a specific amount over a period of time, but retains the flexibility to shift spending across services however they best see fit.
The goal is to provide customers with more cost transparency, says Ross Brown, vice president of go-to-market for OCI. “We want to provide a standard set of discounts,” he says.
Grabbing Market Share
Oracle as it stands right now doesn’t even rank among the leading providers of infrastructure-as-a-service (IaaS) platforms as identified by Gartner. However, with roughly three-quarter of workloads still running on on-premises IT environments, the company sees an opportunity to migrate existing customer applications to the cloud in addition to competing more aggressively for new ones.
Many of those rival cloud service providers are now incumbents that are suffering all the pains ascribed to any classic innovator dilemma, notes Brown. They have all launched so many services that it’s difficult from a financial perspective to shift toward a simpler pricing model, explains Brown.
Oracle, by allowing customers to apply credit to any of its services, is not forcing them to make a decision now that inevitably might be different when it comes time to consume a specific service, adds Brown.
Also read: Oracle Adds Free Cloud Migration Services
The Digital Transformation Boon
In general, Oracle is betting that as the COVID-19 pandemic continues to subside more organizations will look to rein in cloud costs. In the immediate aftermath of the pandemic, organizations deployed workloads in the cloud with little examination of costs. The primary focus was to drive digital transformation initiatives as quickly as possible. Employing platforms provided by cloud service providers they already had relationships with in most cases proved to be the path of least resistance. Now, however, more IT organizations have become accustomed to employing multiple clouds. As such, they are becoming more adept at playing one provider off against another based on the cost of deploying specific classes of workloads.
Many of those workloads are also a lot more data-intensive because they employ AI models that are expensive to build and deploy in a cloud environment, notes Brown.
Oracle may not have enough market share just yet to force rival cloud service providers to react. However, it’s in the best interest of IT leaders to keep an eye on what smaller players are up to as they battle for market share. At the very least, it’s worth a cup of coffee over a video conference if, for no other reason, than to keep all the players honest.