With the launch of sovereign cloud regions, Oracle has once again found a unique entry into the public cloud market.
Today Oracle announces a major update to Oracle Cloud Infrastructure (OCI). It will become possible for organizations in the European Union to use sovereign cloud regions within OCI in the course of 2023. With this, the company wants to make it possible for more organizations to move towards the public cloud. This specifically concerns organizations in the European Union that, for example, are not allowed to use “standard” public cloud for privacy reasons. That is, these organizations may only enter the cloud if it is 100 percent within the European Union.
Until now, such a cloud offering was not available from the major players in the market. Oracle’s Cloud@Customer offering does not meet this requirement either. This is still basically Oracle’s standard cloud, but within the walls of one’s own organization. During our recent visit to the OpenInfra Summit, data sovereignty was a big spearhead for OpenStack. This was to make it possible for European providers to build a fully sovereign cloud within the EU. With its sovereign cloud regions, Oracle is also stepping into this from next year. That will not improve the outlook for OpenStack at this point, we suspect.
What are sovereign cloud regions within OCI?
Sovereign cloud regions are an extension to OCI, but not in the sense that any real new functionality becomes available. In fact, functionally there is no difference between what we know today from OCI and sovereign cloud regions within OCI. That is, all the services and functionality of OCI is also available in these new cloud regions. Both IaaS and SaaS, so the basic OCI environment as well as Fusion Cloud Applications are available. Oracle already had Oracle European Union Restricted Access Cloud Service for its Fusion Applications, by the way. This addressed issues such as data residency and privacy by hosting specific environments only in EU data centers. That service will also move to the new sovereign cloud regions.
The sovereign cloud regions become part of the already existing regions in the EU. You can also include them in Cloud@Customer environments. There is 100 percent separation between the general Oracle environment and the sovereign cloud regions. Both physically and in terms of the logical setup of the environment. This is what Richard Smith, EVP Technology & Cloud EMEA and Regis Louis, VP Cloud Strategy EMEA at Oracle tell us in a briefing on the announcement.
The bottom line is that Oracle’s sovereign cloud regions will not only run within the EU. They will also be operated and maintained by EU residents. EU residents do all of the data processing in the sovereign cloud regions. In terms of pricing, Oracle assures us that this won’t be different from the regular OCI offering. The first sovereign cloud regions will be available in two of the six OCI regions within the EU, Germany and Spain.
“Oracle understands regulators”
One of the things both Smith and Louis want to emphasize is that Oracle is ideally suited to offer the new sovereign cloud regions. “We invest a lot of time and effort in understanding what regulators want,” Smith states. Oracle has someone in-house who focuses on the rules and regulations within the EU and how they are changing. The latter is also very important, of course. Laws and regulations have a tendency to be somewhat fluid. If that happens, the the sovereign cloud regions have to move with them, of course. This consistency is also something that Smith and Louis want to emphasize during our conversation: “We can offer sovereign cloud regions in a consistent way across the EU, we can define what we want.”
Oracle doesn’t enter this part of the cloud market without any prior expereince, too. It already has the dual-region government cloud in the UK. In addition, the work Oracle has done with the US Department of Defense also helped in setting up the sovereign cloud regions announced today. This experience ensures that Oracle is excellently positioned to make a success of the sovereign cloud regions in the European Union as well, is the message that both men want to convey.
Another step closer to Oracle’s cloud vision of the future
We have previously written about Oracle’s unique way of competing with the big players in the public cloud arena. Oracle will have to differentiate itself from the competition in order to keep up. The company’s SaaS offering obviously plays an important role in this. This gives Oracle an additional entry point for its other OCI offerings, including the new sovereign cloud regions. One very obvious entry point in this respect are the Fusion Cloud Applications that already use the EU Restricted Access Cloud Service. They can move to the new regions without much hassle.
Today’s announcement can’t be discussed without referencing the recent Cerner acquisition. Healthcare is a clear focus for Oracle. For this to be possible, cloud regions must meet certain conditions. After all, there is a lot of PII data circulating within that segment. Within Europe, that obviously means complying with EU laws and regulations. “You don’t have a discussion around healthcare without having one around the public sector in general and therefore one around laws and regulations,” Smith sums it up. With the addition of sovereign cloud regions in 2023, Oracle will be able to have better discussions around this topic.
Taking a broader perspective, today’s announcement is part of Oracle bigger cloud vision. The world moves towards cloud ecosystems, Smith firmly believes. As such, that’s also the future for Oracle, he states. It is not about positioning IaaS or SaaS separately from each other, but about the bigger picture or ecosystem. Extensions such as Cloud@Customer a few years ago, but certainly also the sovereign cloud regions that the company announces today, are important pillars for this. To achieve this, Oracle can utilize its enormous installed base and the large amount of data that is already in an Oracle environment anyway.