Next week, Oracle will start a price war with Amazon over cloud computing

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Larry Ellison

Oracle

Oracle executive chairman and CTO Larry Ellison

Oracle has bet its future on cloud computing, not that it had a choice. Companies don't want to buy their own servers, storage, and software anymore and install all of it in their own data centers.

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They want to rent all that stuff from vendors on a subscription basis and let the vendors maintain everything.

Amazon is far and away the leader in cloud computing and it's been coming after Oracle's customers with a vengeance.

Oracle's customers love the company's powerful database but don't like the company's high-pressure sales tactics. But to rip out that database that runs their businesses, and replace it, is next to impossible.

So Amazon built a service that does it for them, called Amazon Web Services Database Migration Service (DMS) . It promises to easily move Oracle's customers (and other databases) to Amazon's database in the AWS cloud.

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Now, Oracle is fighting back. It has launched its own AWS-killer cloud service, (aka Infrastructure as a Service) and wants to win customers the old-fashioned way: a price war.

So said Larry Ellison, Oracle Chairman and CTO, in the press release where Oracle reported a disappointing first quarter earnings:

"Next week at Oracle OpenWorld, we will introduce the second generation of our Infrastructure as a Service. Our Generation2 IaaS delivers twice the compute, twice the memory, four times the storage and ten times more I/O at a 20% lower price than Amazon Web Services. IaaS represents a huge new cloud opportunity for Oracle to layer on top of our rapidly growing SaaS and PaaS businesses."

Currently, Oracle isn't considered much of a contender in this part of the cloud computing market.

Most in the industry see it as three-horse race with Amazon way out in front in every way from revenue to features, Microsoft nipping at its heels and Google a distant but gaining on 'em third.

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Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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