Larry Ellison loves to rail against Amazon but this analyst says Microsoft is the real enemy (ORCL, MSFT, AMZN)

Oracle's Larry Ellison thinks he's at war with Amazon Web Services. But not everyone agrees.
(Oracle)

Oracle loves to pick fights with Amazon Web Services in the database and cloud markets, but the enemy it should really take aim at is Microsoft, according to one analyst.

"Microsoft is their big competitor," says Larry Carvalho, lead analyst on platform-as-a-service at IDC.

Amazon may be a giant in the cloud world but Microsoft is a bigger threat to the types of big business customers that Oracle depends on.

"Oracle is about two to three years behind Microsoft," Carvalho tells Business Insider.
Pick your battle

Earlier this week, when Oracle announced its newest database, the Oracle 18c, chairman Larry Ellison called it the first "fully-autonomous" and "self-driving" database on the market. But to Carvalho, that claim doesn't mean much in a market full of semi-autonomous databases, like Microsoft Azure's SQL.

Microsoft CEO Satya Nadella (AP)

"Oracle," Carvalho said, "is just catching up."

While certain functions on the Oracle 18c may be new, such as its reported ability to autonomously patch cybersecurity flaws, the heart of Oracle's new product is machine learning. Microsoft launched Azure SQL, which self-tunes and recommends security fixes, in March 2016.

The competition, according to Carvalho, will now come down to which customers Oracle is chasing. While Amazon might steal business from Oracle when it comes to Java workloads, Microsoft has the advantage when it comes to .NET workloads. The Oracle-owned Java and Microsoft-owned .NET are the two main frameworks used for building database applications.
Open strategy

Oracle's best hope for winning, Carvalho reckons, is to hammer home the message that it supports open source software and that its product plays nice with everyone, working with tech from different manufacturers.

"The whole open source story that Oracle is pushing might draw new customers, but they'll have to show differentiation about why Oracle and not Microsoft," Carvalho said. "It has potential, but I haven't seen anything come out of it."

For now, however, Oracle is presenting the market as an issue of pricing. In his keynote, Ellison mostly focused on the price of its services compared to Amazon Web Service's. Ellison promised to include a clause in its contracts that says it will cost less than half of what Amazon charges for the same service.



Amazon fired back on Monday, describing Ellison's presentation as "no facts, wild claims, and lots of bluster."