Oracle lowers minimum commitment for on-prem cloud • The Register

Oracle has reduced its fully managed on-premises cloud offering to a smaller data center footprint for a sixth of the budget.

Dubbed OCI Dedicated Region Cloud@Customer for short, the service launched in 2020 and promised to run a private cloud in a customer’s data center or a cloud operated by a third party. Paid for “as-a-service,” the concept promised customers the flexibility to seamlessly move workloads between Oracle’s on-prem system and public cloud for a $6 million annual fee and a minimum commitment of three years.

Big Red has now reduced the fee for a scaled-down version of its on-prem cloud to $1 million per year for a minimum period of four years.

Leo Leung, vice president of OCI, said at the launch that the system would require at least 2,000 square feet of data center space. The new offering only requires 12, he said. “It’s significantly smaller, which means more companies have more locations to deploy our on-prem cloud. Customer data centers are very different: the level of standards, the level of quality, the performance, all those things. So making smaller was a big deal.”

The benefit of paying Oracle to host a cloud in a customer’s data center is that data can be kept close to the enterprise — either for latency or regulatory purposes.

With the new offering, that would be available to a wider range of customers, Leung said. “It’s more affordable for more customers. There are actually many organizations that will have some, if not all, of their workloads that require them. We wanted to make it more accessible to more organizations.”

Upon its launch, Dedicated Region Cloud@Customer was criticized by Oracle observers, who pointed out that Big Red was generating higher margins from its on-prem support business than from the cloud, and may seek to leverage those margins over time through its pricing model to bring back in.

At the time, Oracle said that in exchange for a consumption-based commitment, customers get the flexibility to choose the exact amount and type of compute/storage capacity they need for workloads without locking themselves into a specific configuration. If the workload changed during runtime, Oracle said it would perform any hardware swap at no additional cost.

Oracle has also launched a Compute Cloud@Customer Managed Service that offers a “rack-scale” solution. It’s even smaller than the dedicated region offering and has a service profile limited to compute and storage. Other traffic — API calls, for example — would be managed in the cloud, Leung said. ® Oracle lowers minimum commitment for on-prem cloud • The Register

Chrissy Callahan

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