Oracle Shrinks On-prem Cloud Offering In Both Size And Cost

Oracle has slimmed down its on-prem fully managed cloud offer to a smaller datacenter footprint for a sixth of the budget.

Snappily dubbed OCI Dedicated Region Cloud@Customer, the service was launched in 2020 and promised to run a private cloud inside a customer's datacenter, or one run by a third party. Paid for "as-a-service," the concept promised customers the flexibility of moving workloads seamlessly between the on-prem system and Oracle's public cloud for a $6 million annual fee and a minimum commitment of three years.

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

Leo Leung, OCI veep, said at launch that the system required a minimum of 2,000 square feet of datacenter space. The new offer only requires 12, he said. "That's significantly smaller, which means that more enterprises have more locations that they can deploy our on-prem cloud. Customer datacenters vary a lot: the level of standards, the level of quality, the power, all that kind of stuff. So making it smaller was a big thing."

The benefit of paying Oracle to host a cloud in a customer's datacenter is that it can keep data proximal to the business – either for latency or regulatory purposes.

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With the new offer, that would be available to a broader set of customers, Leung said. "It is more affordable for more customers. There's actually a lot of organizations that are going to have some amount of workloads, if not all of their workloads that need something like this. We wanted to make it more approachable for more organizations."

When it launched, Dedicated Region Cloud@Customer attracted criticism from Oracle watchers who cautioned that Big Red made higher margins from its on-prem support business than it did from cloud, and might look to recoup those margins over time in through its pricing model.

At the time, Oracle said that in exchange for a consumption-based commitment, customers get the flexibility to select the exact amount and type of compute/storage that they need for workloads without getting locked into a specific configuration. If the workload needs change during the length of the term, Oracle said it would manage any hardware exchange at no additional cost.

Oracle has also launched a Compute Cloud@Customer managed service, which offers a "rack-scale type of solution." Smaller still than the Dedicated Region offer, it has a service profile limited to compute and storage. Other traffic – API calls, for example – would be managed in the cloud, Leung said. ®