OCI Dedicated Region – The Next-Generation Private Cloud

OCI Dedicated Region – The Next-Generation Private Cloud

Private clouds and IT infrastructures deployed in on-premises data centers are going through the next evolution. We see vendors and solutions shifting from siloed private clouds more towards a platform approach. A platform that does not consist of different solutions (products) and components anymore but rather something that provides the right foundation, a feature set and interfaces that let you expose and consume services like IaaS, PaaS, DBaaS, DRaaS etc.

If we talk about a platform, we usually mean something that is unified and that is not just “integrated” or stitched together. Integrated would imply that we still have different products (could also be from the same vendor), and this is becoming less popular now. Except this is your way to attract talent by using a best-of-breed approach. Do not forget: It increases your technical debt and hence the complexity massively.

This article highlights a private cloud platform that brings true public cloud characteristics to private clouds. As a matter of fact, it brings the public cloud to your on-premises data center: OCI Dedicated Region

The Cloud Paradox

We could start an endless discussion about technical debt, the so-called public cloud sprawl, and the wish for cloud repatriation. Many people believe that “the” public cloud has failed to deliver its promise. Organizations and decision-makers are still figuring out the optimal way for their business to operate in a multi-cloud world.

In my opinion, the challenge today is that you have so many more topics to consider than ever before. New technologies, new vendors, new solutions, new regulations, and in general so many new possibilities for how to deliver a solution.

IT organizations have invested a lot of money, time, and resources over the past few years to familiarize themselves with these possibilities: hybrid cloud, multi-cloud, application modernization, security, data management, and artificial intelligence.

The public cloud has not failed – it is just failing forward, which means it is still maturing as well!

Other (private) cloud and virtualization companies grew by developing homegrown products and by acquiring different companies to close some feature gaps, which then led to heavy integration efforts. Since the private cloud and the related vendors are also still evolving/maturing, but also still trying to fix the technical debt that they have delivered to their customers and partners, there seems not to be a single private cloud vendor in the market that can provide a true unified platform for on-premises data centers.

Interoperability, Portability, Data Gravity

In 2010, different companies and researchers have been looking for ways to make the private and public clouds more interoperable. The idea was a so-called “intercloud” that would allow organizations to move applications securely and freely between clouds at an acceptable cost. While this cost problem has not been solved yet, the following illustration from 2023 (perhaps not accurate, please verify) should give you an idea where we stand:

Source: https://medium.com/@alexandre_43174/the-surprising-truth-about-cloud-egress-costs-d1be3f70d001 

Constantly moving applications and their data between clouds is not something that CIOs and application owners want. Do not forget: We are still figuring out how to move applications to the right cloud based on the right reasons.

Thought: AI/ML-based workload mobility and cost optimization could become a reality though but that is still far away.

That brings us to interoperability. The idea almost 15 years ago was based on standardized protocols and common standards that would allow VM/application mobility, which then can be seen as cloud interoperability.

So, how are cloud providers trying to solve this challenge? By providing their proprietary solutions in other clouds.

While these hybrid or hybrid multi-cloud solutions bring advantages and solve some of the problems, depending on an organization’s strategy and partnerships, we face the next obstacle called data gravity.

The larger a dataset or database is the more difficult it is to move, which incentivizes organizations to bring computing resources and applications closer to the data, rather than moving the data to where the processing is done. That is why organizations are using different database solutions and DBaaS offerings in their private and public cloud(s).

Distributed Cloud Architecture

Oracle’s distributed cloud architecture enables customers to run their workloads in geographically diverse locations while maintaining a consistent operational model across different environments:

  • Oracle Cloud Infrastructure (OCI). Oracle has built OCI to deliver high-performance computing and enterprise-grade cloud services with global availability across its various regions.
  • Hybrid Cloud and Interoperability. Oracle’s hybrid cloud capabilities, such as Exadata Cloud@Customer and OCI Dedicated Region, enable organizations to run Oracle Cloud services in their own data center. These services give customers the full benefits of Oracle Cloud Infrastructure while maintaining data within their data centers, which is ideal for industries with strict data residency or security policies.
  • Multi-Cloud. Oracle is the first hyperscaler that offers databases in all the major public clouds (Azure, Google Cloud and AWS). Then there is HeatWave MySQL on AWS and the different interconnect options (Google Cloud, Azure).

These offerings address the mobility, interoperability, egress costs, and data gravity challenges mentioned above. In my opinion, there is no other vendor yet who achieved the same level of partnerships and integrations that brings us closer to cloud interoperability.

This is the Gartner Magic Quadrant (MQ) for Distributed Hybrid Infrastructure from August 2023:

Gartner Magic-Quadrant-for-Distributed-Hybrid-Infrastructure

I do not know when the next MQ for Distributed Hybrid Infrastructure comes out (Update: the 2024 Gartner MQ for DHI came out on October 10), but I guess that Oracle will even be positioned better then, because of the Oracle CloudWorld 2024 announcements and the future release of OCI Dedicated Region 25. If you missed the Dedicated Region 25 announcement, have a look at this interview:

Let us park OCI Dedicated Region for a minute and talk about data centers quickly.

Monolithic Data Centers for Modern Applications

As many of us know, the word “monolithic” describes something very large, and difficult to change. Something inflexible.

It is very interesting to see that so many organizations talk about modern applications, but are still managing and maintaining what one could call a “monolithic” data center. I had customers discussing a modern infrastructure for their modern (or to be modernized) applications. With “modern” they were referring to a modern infrastructure which means “public cloud” for them.

So, it still surprises me that almost nobody talks about monolithic infrastructures or monolithic private clouds. Perhaps this has something to do with the mostly (still) monolithic applications, which implies that these workloads are running on a “legacy” or monolithic infrastructure. 

So, what happens to the applications that have to stay in your data center, because you cannot or do not want to migrate them to the public cloud?

Some of those apps are for sure still important to the business, need to be lifecycled and patched, and some of them need to be modernized for you to stay competitive with the market.

What about a modern private cloud?

If your goal is to put modern applications on a modern platform, what are the reasons for stopping you and not investing in a more modern platform that can not only host your modern apps, but also legacy apps, and anything that might come in the future?

Where do you deploy your AI-based workloads and data services if such applications/workloads and their data have to stay in your private cloud?

And what is Gartner saying about the trend for public services spend?

All segments of the cloud market are expected to see growth in 2024. Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth at 25.6%, followed by platform-as-a-service (PaaS) at 20.6%…

Why do I mention this?

Because some people think that virtual machines and IaaS are legacy, and then come to the false conclusion that an on-premises cloud is obsolete. If that would be true, why does Gartner regularly forecast the highest spending growth with IaaS? And wouldn’t it mean that the modern public cloud is hosting a huge number of legacy workloads, and hence become obsolete as well?

I do not think so. 😀

The Next Generation

One of the main challenges with existing private clouds is the operating model. Imagine how organizations have built data centers in the past. You started to virtualize compute, then networking, and then storage. A little bit later you had to figure out how you automate, deploy, integrate, and maintain these components without forgetting security in the end.

A few years later, you had to start thinking about container orchestration and go through the same process again: how to build, run, connect, and secure container-based workloads.

Why? Because people believe that on-premises data centers will disappear, applications must be cloud-native, containerized, and therefore be orchestrated with Kubernetes. That’s the very short and extremely simplified version of 20 years of virtualization history.

So, suddenly, you are stuck in both worlds, the monolithic data center and the modern public cloud, with different people (engineering, architecture, operations), processes, and technologies. Different integrations (ecosystem), strategic partnerships and operating models for different clouds.

What are the options at this point? Well, there are not so many:

  1. Stretch the private cloud to the public cloud (e.g., VMware Cloud Foundation, Nutanix)
  2. Stretch the public cloud to your data center (AWS Outposts, Azure Stack, OCI Dedicated Region or Oracle’s Cloud@Customer offerings)
  3. Leave all as it is and try to abstract the underlying infrastructure, but build a control plane on top for everything (Azure Arc, Google Anthos, VMware Tanzu)

The (existing) private cloud will always be seen as the legacy and outdated private cloud, if nobody changes the processes and the capabilities that the data center platform can deliver.

Note: But that might be okay depending on an organization’s size and requirements

What am I trying to say here? It is not only the operating model that has to change but also how the private cloud services are consumed by developers and operators. Some of the key features and “characteristics” they seek include:

  • Elastic scalability: The ability to automatically scale resources up and down based on demand, without the need for manual intervention or hardware provisioning.
  • Cost transparency and efficiency: Pay-as-you-go pricing models that align costs with actual resource consumption, improving financial efficiency.
  • Cloud-native services: Access to a wide range of managed services, such as databases, AI/ML tools, and serverless platforms, that accelerate application development and deployment.
  • Low operational overhead: Outsourcing the management of underlying infrastructure to reduce operational complexity and allow teams to focus on business outcomes.
  • Compliance and data sovereignty: The ability to meet strict regulatory requirements while ensuring that data and workloads remain under the enterprise’s control.

This brings me to option number 2 and OCI Dedicated Region, because Oracle is the only public cloud provider, who can bring the same set of public cloud services to an enterprise data center.

What is OCI Dedicated Region?

OCI Dedicated Region (previously known as Oracle Dedicated Region Cloud@Customer aka DRCC) provides the full suite of Oracle cloud services (IaaS, PaaS, and SaaS) for deployment in one or more customer-specified physical locations. This solution allows customers to maintain complete control over their data and applications, addressing the strictest security, regulatory, low latency, and data residency requirements. It is ideal for mission-critical workloads that may not move to the public cloud.

Diagram of OCI in a dedicated region, description below

OCI Dedicated Region provides the same services available in Oracle’s public cloud regions. It is also certified to run Oracle SaaS applications, including ERP, Financials, HCM, and SCM, making it the only solution that delivers a fully integrated cloud experience for IaaS, PaaS, and SaaS directly on-premises.

Key features of DRCC:

  • Full Public Cloud Parity: DRCC offers the same services, APIs, and operational experience as Oracle’s public cloud. This includes Oracle Autonomous Database, Exadata, high-performance computing (HPC), Kubernetes, and more.
  • Private Cloud: The infrastructure is deployed within the customer’s data center, meaning all data stays on-premises, which is ideal for industries with strict data privacy or residency requirements.
  • Managed by Oracle: Oracle is responsible for managing, monitoring, updating, and securing the infrastructure, ensuring it operates with the same level of service as Oracle’s public cloud.
  • Pay-as-you-go: DRCC operates under a consumption-based pricing model, similar to public cloud services, where customers pay based on the resources they use.

Oracle Alloy

Oracle Alloy is a cloud infrastructure platform designed to allow service providers, independent software vendors (ISVs), and enterprises to build and operate their own customized cloud environments based on Oracle Cloud Infrastructure.

Becoming an Oracle Alloy partner  diagram, description below

Some key features of Oracle Alloy:

  • Customizable Cloud: Oracle Alloy allows organizations to brand, customize, and offer their own cloud services to customers using Oracle’s OCI technology. This enables service providers and enterprises to create tailored cloud environments for specific industries or regional needs.
  • Full Control: Unlike DRCC, which is managed entirely by Oracle, Alloy provides organizations with full control (of operations) over the infrastructure. They can operate, manage, and upgrade the environment as they see fit.
  • White-label Cloud Services: Oracle Alloy allows organizations to build and offer cloud services under their own brand. This is especially useful for telcos, financial institutions, governments or regional service providers who want to become cloud providers themselves.

In addition, partners can set their own pricing, rate cards, account types, and discount schedules. They can also define support structure and service levels. With embedded financial management capabilities from the Oracle Fusion Cloud ERP offering, Oracle Alloy enables partners to manage the customer lifecycle, including invoicing and billing their customers.

Final Words

Just because organizations call the combination of their data center solutions (even the components are coming from the same vendor) a private cloud, doesn’t mean that they have the right capabilities (people, processes, technology – not only technology!) and private cloud maturity to enable business transformations.

So, if you want to bring your on-premises environment to the next level with a true private cloud and a cloud operating model, why don’t you bring a complete public cloud region into your data center? 🙂