- Major Studies
- Advisory Reports
- Valuation Data
Oracle continues to focus intensely on its cloud strategy, and its various cloud applications have shown strong growth. But Oracle is playing catch up as a cloud infrastructure provider, where it is far behind the cloud leaders Amazon AWS and Microsoft Azure.
To really compete with the cloud giants, Oracle needs to go beyond existing Oracle customers simply lifting and shifting on-premises workloads to its Oracle Cloud Infrastructure (OCI). It needs independent software vendors (ISVs) and service providers to build their businesses on OCI. One such service provider is OceanX, which offers an all-in-one subscription commerce platform.
OceanX spun off from direct marketing pioneer Guthy-Renker, well known historically for its infomercials promoting self-help books, cosmetics, and other products. OceanX was essentially the order fulfillment and logistics side of the business, which Guthy-Renker spun off so that it could offer business process outsourcing (BPO) services to other customers, in addition to Guthy-Renker, which remains the largest client of OceanX.
As brands look to evolve from on-off product sales to ongoing subscription deals with customers, they often find that their e-commerce and back-end fulfillment processes are simply not up to the task. This is where OceanX comes in. Its platform combines e-commerce, fulfillment, customer care, and data analytics to support brands and retailers looking to launch or scale direct-to-consumer subscription programs. The company focuses on generating recurring revenue and cultivating customer relationships. OceanX ships from three fulfillment warehouses—it owns two and uses a third party for another.
With the fulfillment warehouses, OceanX clients “don't need to go around looking for warehouse bays and do inventory management,” said Vijay Manickam, OceanX’s VP of data and analytics. “Once the product gets shipped, we handle the returns process and all the customer service processes.”
Manickam described the advantages of OceanX’s all-in-one approach:
“The entire customer journey is now collected in one single place, which is extremely powerful in a business like ours. Because the customer is at the heart of a recurring-revenue business. Knowing what the customer wants, knowing what their behavior is, allows the client to make the necessary decisions to offer them some personalization to win them back if they cancel. So while the heart of it is the customer, what drives the customer business and the customer experience is the data behind it.”
The startup with about 500 employees initially deployed all of its systems—from e-commerce to order management and fulfillment to data analytics and reporting—on Amazon’s AWS, but recently moved the business intelligence and reporting functions to OCI. “The ETL (extract, transform, load) engines, the reporting engines, all of that resides in OCI, with that database being in Oracle Exadata,” he said. All of the e-commerce and transaction processing systems remain on Amazon AWS, he added, and OceanX is not using Oracle cloud applications, such as Oracle ERP Cloud.
On the reporting side, the El Segundo, Calif.-based company had been experiencing issues with speed and scaling with AWS.
“We had our business intelligence and data management platform in AWS. We ran into performance issues where we needed to scale, and that's when we found that the only way to do that is to increase CPUs, which means we’d have to buy more Oracle [database] licenses. That led us to performing a proof of concept with OCI and Exadata services in the cloud. That’s when we figured out that by moving our data platform and the reporting modules—we use Tableau and a few other reporting engines—we were able to move that into OCI and we leveraged the Exadata Cloud Services environment. Then we gained pretty significant performance improvements. We also had reasonable TCO improvements when compared to our previous environment.”
The performance improvements achieved in OCI are helping OceanX’s clients in real time, he said.
“Clients use the reporting engine that sits on top of the data management. When they start spending money, they need to know which offers have performed well, which campaigns are doing well through the day. It is important that the previous day’s data is not only available right up there when they start the day’s work, but also through the day if they need some real-time information.”
In that sort of cloud environment, keeping client information safe and separated from other clients is paramount. Manickam described how OceanX segregates client data. “We use a multitenant architecture functionality within Oracle, which gives us a client database feature,” he said. “We use the TDE (transparent data encryption) function. These things are automatically now available in Oracle.” Each client gets his own Oracle pluggable container database, he added.
If he were to make the move to OCI again, what would he do differently?
“We spent quite a considerable amount of time so that Oracle understood our environment. We needed to make sure our infrastructure team was able to do all the support in OCI that they were doing in AWS. All the patching, the security. So all for the right reasons, but I still feel if that was all figured out and we had accelerated that, it would have been great. But other than that, I would do the same. We enjoy the cost benefits, we enjoy the performance, so why not?”
OceanX does not currently have plans to do more on OCI besides data, reporting, and analytics, but is comfortable with a multi-cloud environment, Manickam said.
“At this point, no, just because of the nature of the tools we have. But things are becoming more and more cloud agnostic, so we’re going to be looking around. If certain services perform much better in OCI then the answer is yes. We also like certain services in Google. We like certain things in Azure.”
Customer stories such as OceanX are important for Oracle to show that adoption of OCI is gaining momentum. At last year’s Oracle OpenWorld, company founder and CTO Larry Ellison devoted a large percentage of his keynote to the concept that OCI was faster than AWS, especially when it came to working with large data sets in real-time. Here is one customer who is experiencing that first hand. If more customers have a similar experience, it could lead to a clear differentiator for Oracle that it could use to build its cloud business beyond lift and shift. As more customer-experience stories get told, it will be interesting to see whether other major BPO providers follow the OceanX example to move major parts of their service delivery to OCI.