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Why Oracle launched Its Elastic Compute Cloud


Nov. 20 2020, Updated 5:06 p.m. ET

Oracle’s Elastic Compute Cloud is its latest offering in cloud space

At the OpenWorld 2015 conference, Oracle (ORCL) announced the launch of Oracle Elastic Compute Cloud in the public cloud space. Oracle’s Elastic Compute Cloud is meant to allow customers to leverage elastic compute capabilities to handle varied workloads in the cloud from within a shared computing zone. Oracle’s offering would allow customers to choose how many cores they require along with the operating system like Oracle Linux, Red Hat (RHT), Ubuntu, or Microsoft (MSFT) Windows.

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Oracle’s Elastic Compute Cloud offers an alternative to Amazon’s

According to a report from IDC (International Data Corporation), the public IT cloud services market is expected to grow from $56.6 billion in 2014 to $127.5 billion by 2018, a 23% compound annual growth rate. This is about six times the growth rate of the overall IT sector.

Considering the growth in public cloud space, it appears Oracle doesn’t want to lag behind the competition.

Oracle’s Elastic Compute Cloud could be an alternative to Amazon’s already dominant offering, Amazon Web services’ (or AWS) Elastic Compute Cloud, or EC2. In 2006, Amazon (AMZN) launched Amazon Elastic Compute Cloud, or Amazon EC2, now widely seen as a standard in the cloud infrastructure space. Amazon EC2, part of company’s cloud computing platform, is a web-based service that enables subscribers to run application programs in the company’s computing environment.

AWS has grown to become such an integral part of Amazon that it generated $2.1 billion in its latest fiscal 3Q15. In 3Q15, AWS grew 78% on a YoY (year-over-year) basis, as the chart above shows. In comparison, AWS revenue grew by 82% in 2Q15. Amazon declared its fiscal 3Q15 earnings on October 22, 2015.

The PowerShares QQQ Trust (QQQ) invests about 3.1% of its holdings in Oracle.


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