True or False? If your company buys into a cloud provider for deployment of a big new database-driven business app, you will not have to incur new hardware costs or increase your on-premises rackspace consumption. You probably will be able to enjoy simpler or reduced software licensing as well, right? …POP goes the cloud-in-a-box!

Fredric Paul has a great metaphor describing Oracle’s new marketing thrust for it’s Exadata hardware and database software, as unveiled earlier this month at Oracle’s OpenWorld:

Ellison paid lip service to the value of cloud computing’s utility model, which lets IT execs buy computing power just like they buy electrical power, but the Oracle Private Cloud is more like paying the electric company to put a power plant in your office building.

InfoWorld doesn’t like Oracle’s Private Cloud concept much either. Their complaint has more to do with Oracle’s slant on cloud services failing to be creatively distinctive enough to separate itself from market leader Amazon. But you cannot entirely say that Ellison’s framing of the concept is lacking creativity. Oracle likely wont build a massive data center somewhere requiring the equivalent of a small city’s power supply, because that need doesn’t harmonize with their core business. Thus, we see a repackaging of hardware and software rental plans. As things shake out, the important factor will likely be pricing as IT departments do their comparison shopping. It doesn’t seem easy to beat AWS prices. Can Oracle sell lots of Exadata and databases to Amazon? Unlikely; they are into commodity equipment.

UPDATE: Jan 18, 2013… InfoWorld’s Linthicum characterizes Oracle’s offering as a faux cloud, in reaction to the company’s announcement of it’s On Demand pricing structure. He offers a lucid analysis of Oracle’s thinking behind it’s IaaS strategy, explaining that Oracle is caught without wiggle room because it does not want to exchange it’s lucrative licensing profits for commodity database software margins typical within cloud platforms.

Unlike with a true cloud on-demand service, your monthly fee — which requires a three-year contract — covers just the hardware, its maintenance, and some degree of usage. You pay extra for the Oracle software licenses and for “peak” usage (no definition or price given). It’s not the standard cloud model, in which the entire service is included with the fee.

~RS