David Menninger's Analyst Perspectives

Founded as Software Development Laboratories in 1977, Oracle is a behemoth in the software industry, generating more than $50 billion in revenue in its fiscal year 2024. Originally focused solely on the relational database market, the software provider operated as Relational Systems, Inc. for several years before adopting the name Oracle in 1982. The company went public in 1986 and became one of the largest software providers in the world, eventually amassing a large portfolio of business applications and technology platforms, including the eponymous Oracle Database. Oracle recently hosted its annual Database Analyst Summit, sharing the vision and strategy for its data platform. While much of the event was under non-disclosure as product plans and launch schedules are finalized, it still served as a useful recap of the broad portfolio of data platform capabilities that Oracle has to offer. The themes were a bit surprising to several of us in attendance as it was a kinder, gentler Oracle than in the past. Some of the current market dynamics are playing to Oracle’s strengths, specifically the continued notion of hybrid cloud and on-premises deployments with a growing emphasis on sovereignty. For context, read this perspective by my colleague, Matt Aslett, on the importance of local data processing. Meeting customers where they are and where they want to be was the overall theme of the event. Our research shows that more than half of enterprises (58%) have the majority of data platforms in the cloud, but a substantial portion is deployed on premises. Oracle has made concerted efforts to support more cloud platforms, open technologies and standards than in the past. We have previously described Oracle’s multicloud capabilities and the notion of duality of relational and JSON processing in the same system. These topics retained emphasis at this year’s event. In the past year, the software provider has introduced Oracle Database@AWS and Oracle Database@Google, which join its existing Oracle Database@Azure offering. These offerings are in addition to its cloud service, Oracle Cloud Infrastructure or OCI. OCI forms the foundation for each cloud offering but can also be deployed on-premises with Oracle Cloud@Customer. In addition to various deployment options, Oracle offers several database services, including Oracle Exadata optimized infrastructure, Oracle Autonomous Database, Oracle Autonomous Data Warehouse and Heatwave MySQL service. Exadata is Oracle’s engineered system for data and now artificial intelligence (AI) operations. The latest version, X11M, includes accelerated vector search by pushing vector operations down to the storage tier, similar to how other database operations are pushed down. Oracle makes Exadata available through its own OCI cloud service, partner cloud services and via Oracle Cloud@Customer. Oracle’s pricing model does not charge for input/output operations, which can be an important consideration in cloud-based workloads. Oracle’s autonomous offerings aim to reduce the cost of database administration, maintenance and operation by automating many tasks. Oracle was an early leader in using machine learning to provide autonomous capabilities, introducing them in 2017. The following year, Oracle extended these capabilities to the Autonomous Data Warehouse and now offers its Globally Distributed Autonomous Database to address sovereignty, performance and high availability requirements. It should come as no surprise that Oracle emphasized its AI strategy at the Database Analyst Summit, specifically its database capabilities. Oracle Database includes a laundry list of AI capabilities, including more than 30 in-database ML algorithms. The database supports a vector data type for storing embeddings along with SQL syntax and functions to perform similarity search and vector indexes to accelerate query processing. Oracle has conversational tools to create and debug SQL queries or provide assistance with Java, HTML and PL/SQL. The software provider also claims to be working on other types of assistants, such as creating data integration and transformation pipelines, test data and generating schemas. Oracle also provides its Heatwave database service based on the MySQL technology inherited as part of the acquisition of Sun Microsystems in 2010. Oracle introduced Heatwave in 2020 and has continued to expand its capabilities, which now include machine learning, lakehouse features using object storage and generative AI with vector storage, embeddings and search. Rounding out the portfolio of data platform offerings is the announced but not-yet-available Intelligent Data Lake. This offering supports those at Oracle customer sites who need or prefer to work with an open data stack. Based on the announcements to date, Intelligent Data Lake combines Apache Spark and Apache Flink services along with Jupyter Notebook capabilities. It supports open table formats, which have gained popularity and are growing in importance. It is intended to share Data Catalog and Data Integration capabilities with other Oracle products, although the exact details haven’t been specified. ISG covers multiple Oracle offerings in our Buyers Guides assessments of software providers. In our most recent evaluation of data platforms, Oracle was rated Exemplary and an Overall Leader. Oracle was also awarded our 2024 Digital Technology Innovation Award for OCI. Oracle has a variety of database offerings, which, while very capable, can also create confusion about which service or services a particular enterprise should use. Nonetheless, the software provider continues to innovate and remains a leader in the data platform market. I recommend that enterprises evaluating data platform requirements include Oracle in the consideration set. Regards, David Menninger

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