This past week, Oracle announced that it will be fully supporting and certifying a range of its software products including E-Business Suite, PeopleSoft Enterprise, Siebel CRM, Fusion Middleware, etc. on Amazon EC2.  This is a huge win for Amazon and a very big win and validation for the Infrastructure as a Service industry.  What is interesting about this announcement, is that for supporting EC2, Amazon is enabling Oracle to run their applications in Oracle VM on EC2 instead of the standard XEN VM used in Amazon EC2.   This is an interesting move on the part of Oracle and will make it easy for anyone using Oracle virtualization technology within their own data center to port their images to EC2 and vice-versa .  This also increases competitive pressure on VMWare as Oracle is making it clear that it wants to own the virtualization stack.  VMWare is already under pressure with the rise of IaaS as, baring a few exceptions, none of the major public cloud providers are using VMWare for the virtualization layer.

Another part of the Oracle announcement was the Exalogic Elastic Cloud aka “Cloud in a Box” release.  To me,  the  “Cloud in a Box” announcement appears to be an effort by Oracle to bundle the Java and hardware technology acquired from Sun and “Cloud Washing” it.  No matter how big or small a box is, it can’t be elastic, you have to buy a fixed capacity box and will either be under utilizing it or will find yourself looking for a bigger box when hit by an increase in demand (expected or unexpected).  One of the biggest advantages of using cloud (IaaS) is elasticity, i.e. you only pay and use for what you need and can increase or decrease your usage of resources without paying any premium for the on-demand elasticity.   People are moving to the cloud and building horizontally scalable applications because they want to avoid the dilemma of finding the right size box.  The dilemma of not having a big enough box for handling the unexpected is highlighted in this twenty seconds funny commercial from 1998. (watch)