Amazon AWS CEO Andy Jassy
Amazon AWS CEO Andy Jassy

Can Oracle Beat AWS and Snowflake in the Cloud Database Wars?

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Forget what we know about who leads the database market. The market is being upended by a new breed of cloud database providers, led by Snowflake but there are many others. And transformation-driven customers are eager for new and better approaches to data management.

The database market was long defined by deep-rooted incumbents—Oracle, IBM, SAP, Teradata. The Big 3 cloud providers—AWS, Microsoft Azure, and Google Cloud—have shouldered into the market, and they continue to expand and introduce new capabilities.

AWS alone offers no fewer than 15 purpose-built cloud databases. At the AWS re:Invent conference in early December, CEO Andy Jassy said “all of databases are being reinvented.”

Now, the biggest disrupter of all—Snowflake—is further shaking things up. Snowflake’s revenue grew 119% to $160 million in its most recent quarter, Q3 of FY2021. And its pipeline—as measured by “remaining performance obligation”—jumped 240% to $928 million, as reported by Cloud Wars.

Looking to redefine the market, Snowflake doesn’t even describe its analytics platform as a database management system; it’s a data cloud. “As we see it, we’ve never had a data cloud in the history of computing,” CEO Frank Slootman said on the Q3 earnings call.

And Snowflake is changing the game in other ways. It uses consumption-based pricing, charging customers for the amount of data they store and compute time they use, calculated to the second. “Our business model is a key differentiator for us,” said CFO Michael Scarpelli.

We might have asked: Can AWS and Snowflake beat market-leader Oracle? But today’s headline flips the question: Can Oracle beat them? Because Oracle’s strength—its legacy database business—may also be a vulnerability is the world of 100% cloud-native databases.

In the weeks ahead, we will be exploring this question and many others in the soon-to-launch Cloud Database Report, which will provide independent, in-depth analysis of the industry’s leading cloud database providers and their offerings, differentiators, and challenges.

The Cloud Database Report will be free to subscribers. You can sign up here.

Feeling Snowflake’s Heat

Analysts want to know how Oracle will respond to its new competition. “What gives you confidence that Oracle can remain successful and appeal to a younger generation, many who think cloud-first and want to move really, really fast?” one analyst asked on the company’s earnings call for Q2 FY2021 .

Oracle chairman Larry Ellison responded that Snowflake “doesn’t remotely compare to Oracle’s Autonomous Database.” Rather, AWS is the one feeling Snowflake’s heat. Snowflake is “just killing Redshift over at Amazon,” Ellison said.

At first glance, Oracle’s Q2 results show a modestly growing database business, with subscription revenue up 5% (measured in GAAP). But that’s not the full story. Oracle also reported that consumption revenue was up 64% for Oracle Autonomous Database and up 139% for Oracle Cloud Infrastructure—strong indicators that Oracle can hold its own in cloud databases.

Oracle touts three key differentiators: its autonomous technology, hardened security, and high-performance cloud infrastructure. Oracle is expected to announce new database advances on Jan. 13.

For Snowflake, it’s AWS, Azure, and Google Cloud that represent the immediate battleground. “Our competitive environment is very much dominated by the public cloud vendors,” Slootman said.

In an interesting twist, those same cloud vendors also provide the underlying platforms for the Snowflake Data Cloud. So, Snowflake competes with the public cloud vendors one day, and talks business relationships with them the next day. CFO Scarpelli told analysts he thinks Snowflake can increase future profit margins by renegotiating terms with its cloud vendor partners.

Make-or-Break Questions

How much leverage does Snowflake have with the big cloud vendors that are not only its partners but its biggest competitors? That’s just one of the questions that will determine who wins in the cloud database wars. Some others:

  • Do customers see advantages in purpose-built databases, such as those offered by AWS? Or do they want the simplicity of general-purpose databases that support different workloads?
  • How quickly will enterprises migrate their remaining on-premises databases to the cloud? When they do, will they stick with their existing vendors or switch?
  • Which cloud database vendors will make it easy for customers to build hybrid and multi-cloud data environments?
  • Which cloud database vendors will provide the best tools for data migration and no-fuss application compatibility?
  • How do cloud database providers support emerging technologies such as artificial intelligence and machine learning?
  • As cloud database providers expand their menu of options (SQL, NoSQL, analytics, etc.), what innovations and business-value drivers will differentiate the leaders?
  • And perhaps most important: Which cloud database providers deliver the greatest business value, whether it be faster time to market, customer insights, or predictive analytics?
Sign Up for the Cloud Database Report

The upcoming Cloud Database Report will explore these and many other questions and serve as a timely, central source of news and insights on the fast-moving market. The Report will be published on CloudWars.co.

As the Cloud Database Report’s founding editor, I will draw on my 20 years of experience with the database industry, both as a tech journalist and in communications roles at Oracle, IBM, and MongoDB. Bob Evans, the founder of CloudWars.co, will be a regular contributing editor.

The Cloud Database Report is free to subscribers. You can sign up here.

Please contact me directly to learn more at [email protected].