Database giant Oracle (NYSE: ORCL) is spreading its digital wings in the cloud. A new service powers up the already-impressive Oracle Cloud Infrastructure (OCI) platform, helping customers save costs on high-performance cloud computing.
How does this new service fit into Oracle’s business model, and will it make a needle-moving difference for Oracle investors? Let’s have a look.
What’s new?
The new Oracle service is actually an upgrade to a multilevel stack of Oracle software.
OCI is a broad cloud computing system, similar to Amazon Web Services (AWS) and Microsoft Azure.
Exadata is a popular way to run Oracle’s database services in the cloud. It can run in the client’s data center or other cloud systems such as Azure or AWS, but Exascale was designed for tight integration, ironclad security, and maximum performance on the OCI platform.
The new Exadata Exascale service is a novel cloud-based data architecture. Designed to scale up and down as the customer’s needs evolve, Exascale manages the computing hardware, networking needs, and data storage with artificial intelligence (AI) tools. Crucially, the flexible Exascale system lowers the cost of running the platform and using Oracle’s databases. The company cites 95% savings for the smallest, most affordable Exascale solution when compared to running Exadata without Exascale.
So Exascale makes the powerful Oracle Exadata system more flexible and affordable, especially when paired with the OCI platform. In particular, the Exascale solution makes Oracle’s market-defining database software available to a larger group of small and medium-sized businesses.
Cost efficiency for the win
The cost savings are no joke. Oracle said that the starting price for an OCI-based Exadata database is $10,800 per month.
Low-end or not, that’s a massive computing platform — you’re buying a month’s worth of access to more than 1,000 processors and 150 terabytes of data storage. By contrast, a starter pack of Exascale services involves 16 virtual processors and less than 1 terabyte of storage. The bill will be based on hours of usage, but starts at just $357 per month. That’s a steal if you don’t really need an enormous cloud-computing machine.
On the flip side of the service-scaling coin, enterprise customers can deploy truly massive Exascale database solutions at the drop of a hat. Oracle’s marketing positions this service as a useful data store to feed training data into AI engines, for example. Furthermore, the Exascale system works with Oracle Database version 23c and up, encouraging users of older versions to upgrade their contracts and skill sets to Oracle’s latest and greatest software.
How Exascale fits into Oracle’s business model
From a practical point of view, the Exascale system allows businesses to scale their computing resources up or down based on demand, providing flexibility and cost efficiency.
For smaller businesses, this means access to high-performance computing at a fraction of the cost, enabling them to compete with larger firms without significant capital investment.
For large enterprises, the ability to rapidly deploy extensive database solutions supports large-scale data processing needs, such as AI training and big data analytics.
This versatility and affordability position Oracle to capture a larger share of the cloud computing market, driving innovation and efficiency across various industries. Oracle is attempting to grow its addressable target market on both the high and low end of the business-size spectrum.
Time will tell how quickly cloud computing users will adopt Oracle’s ultra-flexible service offering, but the company is clearly not resting on its laurels. Moreover, Exascale is an AI service on both sides of the coin, incorporating on-the-fly analytics to power its data management services and selling the resulting product into the AI-training market opportunity.
Oracle’s Exadata Exascale may shake up the database market in two ways
For investors, Oracle’s strategic move with the Exascale system signals a commitment to innovation and market expansion. Oracle could boost its market presence in both the large-scale enterprise sector and the broader target of small and medium-sized businesses. Those digital wings I mentioned earlier are stretching to the skies and touching base with potential database buyers on the ground level.
If nothing else, low-cost database vendors such as MongoDB and Couchbase should be shaking in their boots. Oracle’s new service is aiming for their all-important base of cost-sensitive customers.
The lower end-user costs may seem to put pressure on Oracle’s profit margins, but keep in mind that the Exascale system is more cost-effective from the ground up. Lower costs of operation should balance out the smaller client bills, preserving Oracle’s profitability while boosting the market size.
Nice move, Oracle.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Microsoft, MongoDB, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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