Analysys Mason Oracle: IoT cloud service · supply chain solution that is ready to deploy. Furthermore, Oracle has developed more inclusive industrial solutions such as the Digital

Oracle: IoT cloud service

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COMPANY PROFILE

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ORACLE: IoT CLOUD SERVICE

AHMED ALI



Founded 1977

Offices Headquarters in Redwood Shores, California

Employees 138 000 (May 2017)

Regional focus Global

Revenue USD37.7 billion (FY2017)

Selected IoT

customers

GEMÜ, Lochbridge, Mitsubishi Electric, Noble Plastics,

SoftBank, VINCI

Selected IoT

Partners

Advantech, Aricent, Bosch Connected Devices and

Solutions, Bosch Rexroth, Cisco, Cisco Jasper, Dell,

Deloitte, Eurotech, Fathom, Freematics, Fujitsu, Gemalto,

Greenwave, Huawei, OSISoft, Primal Sensors, relayr,

Texas Instruments, Windriver, Zentri

2

Figure 1: Oracle company factsOracle is an enterprise database and business application

provider. The company offers hardware and software IT solutions

and is known for its own trademark database products in addition

to owning the Java platform, following the acquisition of Sun

Microsystems in 2010.

Oracle’s innovation strategy relies on a combination of internal

development and acquisitions. Oracle’s spend on research and

development (R&D) was USD6.2 billion, equivalent to 16%

revenue, in the fiscal year ending in May 2017. The company has

40 000 employees in its R&D division.

Oracle entered the IoT market in 2013 when it launched a version

of its Java platform, ‘Java ME Embedded’, as a software stack for

resource-constrained hardware such as microcontrollers.

The company introduced the Oracle Cloud Integration Platform

portfolio in 2015, which included the Oracle IoT Cloud, the Oracle

Integration Cloud, the Oracle SOA Cloud, and the Oracle API

Manager Cloud. Among other services, the portfolio was offered to

support enterprises’ requirements for IoT device management and

for integration with existing IT systems.

Company summary



Figure 3: Oracle’s revenue by region, worldwide, FY2017

3

Oracle generated USD37.7 billion in FY2017 (Figure 2). The

revenue grew by 2% YoY due to growth in its cloud business,

software updates and support. Net income grew by 5% YoY

reaching USD9.3 billion in 2017.

Oracle breaks its revenue into three business segments; cloud

and on-premise software, hardware, and services.

The cloud and on-premise software business includes cloud IaaS,

PaaS and SaaS offerings in addition to on-premise licenses,

software updates and product support. This is Oracle’s largest

revenue segment and has been growing at 2% CAGR since 2013.

The hardware business includes on-premise appliances and the

related support and services while the services business includes

consulting, advanced customer support, training and certification

programmes. Revenue from both the hardware and the services

businesses have declined by 6% and 4% respectively between

2013 and 2017.

In FY2017, sales in the company's largest region; the Americas,

(where the USA makes 85% of the region’s revenue) grew by 3%

YoY, offsetting the decline in hardware and services. However, in

Europe, sales declined across all businesses resulting in a total

2% YoY drop in the region. Asia-Pacific saw the highest growth with

6% YoY mainly because of the higher software and services sales.

More than quarter of the revenue in the region came from Japan.

Figure 2: Oracle’s revenue and net income, worldwide, FY2013 – FY2017

Company summary: financials

37.238.3 38.2 37.0 37.7

10.9 11.0 9.9 8.9 9.3

-

10

20

30

40

FY13 FY14 FY15 FY16 FY17

(US

D b

illio

n)

Services revenue Hardware revenue Software revenue Net income

Source: Oracle

56%28%

16%

Americas

EMEA

Asia-Pacific

Total revenue:

USD37.7 billion

Source: Oracle



Figure 5: Oracle’s roles in the IoT value chain

4

Oracle Internet of Things (IoT) Cloud Service platform is available

as PaaS offering hosted on its own cloud. The company also offers

IoT SaaS applications for asset, fleet, worker and production

monitoring. Oracle’s cloud business has seen a significant growth

in the recent years, rising from USD2.1 billion in 2015 (5.5% of the

total revenue) to USD4.6 billion in 2017 (12% of the total revenue)

(Figure 4).

Oracle offers its platform as a bundle of device and data

management services including lifecycle management,

messaging, event store and management and visualisation. It also

supports integration with the enterprise systems as well as other

Oracle cloud services to execute more advanced tasks such as

analytics and application development (Figure 5).

Oracle IoT Cloud operates on top of Oracle Database Cloud

Service and Oracle Storage Cloud Service. Supporting clouds

include Oracle Big Data Cloud Service and Oracle Event Hub Cloud

Service for advanced IoT analytics and machine learning

capabilities.

Oracle licenses the service on either a usage-based pricing model

(Universal Credit Services) or on a discounted monthly

subscription-based model (Non-Metered Services). Both methods

are charged based on the number of the allocated Oracle CPUs

(OCPU) per hour.

Figure 4: Oracle’s cloud revenue, global, FY2015 – FY2017

IoT business overview

1.52.0

3.20.6

0.9

1.4

-

1

2

3

4

5

FY15 FY16 FY17

Re

ven

ue

(US

D b

illio

n)

Cloud IaaS & PaaS Cloud SaaS

Source: Oracle

Devices, Sensors, Modules, Hardware

Cellular, LPWA, Management platform

IoT Cloud

Database Big Data Event Hub

API Catalog Java App Integration

Analytics CloudBusiness

Intelligence

Big Data

Preparation

Fleet

Monitoring

Asset

Monitoring

Production

Monitoring

Connected

Worker

Partners’

Apps

Application enablement

Connectivity & connectivity

mgmt.

Device management

Data management

Hardware

Analytics & BI

Applications

Oracle’s

supporting clouds

Oracle’s Core IoT

cloudPartnersKey


© Analysys Mason Limited 2018 5

Oracle’s major acquisitions in the recent years such as Apiary

(2017), Palerra (2016) and NetSuite (2016) allowed the company

to enhance its cloud computing capabilities with several

components including application development, integration and

security. However, Oracle has not made any IoT-specific

acquisitions.

The Oracle IoT Cloud Service builds on Oracle’s cloud components

to meet the IoT services providers’ requirements for device

management and data storage. Through a single integrated cloud

platform, Oracle’s IoT proposition is suitable for customers in the

early stages of IoT projects or are prioritising ease of use over

modular platform design.

Oracle’s partner ecosystem encompasses a range of connectivity,

device, gateway and networking partners to complement the

company’s cloud solution with edge-related components. Partners

include Cisco Jasper, Dell, Eurotech, Windriver and Bosch.

However, Oracle has fewer partners in the higher levels of the IoT

value chain such as the application enablement, advanced

analytics and artificial intelligence platforms. The company wants

to promote its own capabilities and presence in these areas. To

reflect its strengths in these technologies, Oracle has introduced

integrated AI and machine learning within its IoT Cloud. It has also

added support for emerging technologies such as digital twin and

digital thread.

The interest in industrial IoT is rising and Oracle has taken several

steps to secure its place in this market and counter growing

competition. The company relies on building strategic partnerships

and expanding its product portfolio by adding advanced platform

services and applications.

In terms of industrial IoT partnerships, Oracle is collaborating with

companies that have operational technologies and digital

transformation expertise such as Bosch and GE. A significant

partnership in 2017 was with Mitsubishi Electric. With Mitsubishi

providing connectivity at the edge and access to manufacturing

customers, Oracle handles data processing in the cloud and

provides access to application developers.

Oracle is also targeting the industrial IoT market with its pre-

packaged applications. The company has developed its own digital

supply chain software, combining elements from its Supply Chain,

Big Data and IoT Clouds . The solution allows Oracle to target

existing customers with siloed sets of data within Oracle Supply

Chain cloud and also target new customers that are looking for a

supply chain solution that is ready to deploy.

Furthermore, Oracle has developed more inclusive industrial

solutions such as the Digital Field Service and the Smart

Connected Factory. These solutions go beyond asset monitoring to

offer comprehensive digital platforms with features such virtual

reality to simulate the manufacturing floor and help with worker

remote training.

IoT strategic direction



Figure 6: Oracle’s IoT Cloud Service components

Product summary

Service Function Description

Device

Virtualization

• Device

connectivity

Abstracts the complexity of device connectivity by creating a set of resources with data properties and message formats

for every connected device. It standardises the way devices are integrated with the enterprise. Applications can directly

communicate with the device regardless of the connectivity protocol. Device monitoring and control can be preformed

using the client software library API or through the REST calls made to those devices.

High Speed

Messaging

• Telemetry

• Communication

The service uses a number of extensible device protocol adapters to enable reliable bidirectional communications

between the connected devices in the network and the Oracle IoT Cloud Service. It also supports communication with all

other backend elements that connect to the Oracle IoT Cloud Service.

Endpoint

Management

• Device

management

• Gateway

management

Provides secure endpoint management through the APIs and the Management Console. An endpoint can be a gateway,

a programmable device, device software running on the Oracle IoT Cloud Service Gateway device, a device adapter, or

an enterprise application. The service can also deliver device software updates and managing the security policies.

Event Store • Data storage Offers data storage services for different types of messages sent to and from the devices with storage duration

configured between 1 month and forever. The types of data stored include the entire device repository, configuration

information, the device software repository, the log files from devices, device data and alert messages.

Stream

Processing

• Stream

analytics

Provides real-time processing capabilities and basic analytics such as event aggregation, correlation and filtering for the

ingested data streams that are sent to Oracle Cloud. Users have access through a graphical interface to a range of pre-

developed and built-in analysis patterns. Uses can build their own analysis applications and visualise their data.

Enterprise

Connectivity

• Device and

application

integration

Allows enterprise applications to integrate with the Oracle IoT Cloud Service using the Cloud Service Client Software

Enterprise Library and REST APIs. Enterprise applications have a secure channel to acquire data from the devices or

send commands to them.



Figure 7: Oracle’s selected IoT use cases

IoT use cases

Customer/Partner Country Scope

L&T Infotech (LTI) India LTI is a global IT technology and service provider that supports more than 500 customers around the world in areas such as

manufacturing, utilities, banking and insurance. The company used Oracle IoT Cloud to develop a number of end-to-end IoT

solutions that target customers in the industrial sectors with sensors, connected assets, data visualization and advanced

analytics. The released solutions include: •Visual Cargo for fleet and shipment tracking •Smart Water Processing for

monitoring and maintaining water filtering systems •Time out of Environment for monitoring the refrigerating conditions for

stored products •Heavy Assets Management for tracking heavy assets and their energy consumptions •Industrial Pump

Optimization for management and control of industrial pumps in remote locations.

SoftBank Japan SoftBank, the Japanese mobile operator, launched a personal mobility service to support tourists in the island of Teshima in

Japan. The small and remote island is popular among tourists for its landscape and its international art festival. However,

the art exhibits are scattered across the island which is not well-connected with public transportation. SoftBank’s solution

was to introduce an electric motorcycle sharing service named Setouchi Karen. Visitors can rent scooters during their stay in

the island. SoftBank is using Oracle IoT Cloud to remotely monitor the scooters and collect data about the scooter locations

and usage patterns. Through the platform, SoftBank is offering extra features for customers such as sending notifications

about ferry departure times. The platform also analyses the driving patterns and the excessive use of the brakes to provide

suggestions to drivers on how to drive more efficiently to save battery.

VINCI Facilities France VINCI Facilities is a European facility management and building solution service provider supporting businesses across a

range of industries including healthcare, education, local authority, retail and social housing. The company has around

8000 employees and operates in more than 18 countries. The company was looking for a solution to reduce the cost of its

maintenance services and to improve staff interaction with customers. Using Oracle IoT Cloud, VINCI remotely monitors

different equipment and assets inside the buildings it manages. The platform helped the company to gain real-time

insights into the building conditions and to create service requests automatically. As a result, VINCI was able lower the

repair times and increase workforce utilisation.



OPPORTUNITIES

THREATS

STRENGTHS

WEAKNESSES

8

Analysis: strengths, weaknesses, opportunities and threats

▪ Oracle has a solid background as an enterprise application provider with

a growing SaaS business. Introducing IoT applications builds on these

strengths and extends the IoT capabilities to various types of customers.

▪ The strong focus on digitalising the supply chain and supporting the

industrial sectors allows for faster product development and targeted

customer acquisition strategies.

▪ Oracle is a trusted brand with an extremely large customer base to sell

to.

▪ Oracle lacks device connectivity expertise, has not acquired any IoT

device connectivity and its enterprise hardware business is declining. As

a result, the company relies strongly on its edge partners to ingest and

aggregate device data and send it to the cloud. Given its device

management approach, Oracle needs to secure its position in the edge

market.

▪ Strong competition from cloud and enterprise software providers such as

AWS, IBM and Microsoft Azure. These competitors are expanding rapidly

in the IoT stack, introducing new features, expanding partnerships and

experimenting with pricing more frequently than Oracle.

▪ Oracle offers a comprehensive set of device and data management

features that are integrated into a single IoT Cloud platform. This

simplifies IoT deployment for customers that want an uncomplicated

device management solution.

▪ Oracle also provide access to other cloud services such as big data,

analytics and business intelligence to support its IoT Cloud.

▪ Oracle has an extended ecosystem of partners, especially in the IoT edge

space. These include major hardware and gateway providers and system

integrators such as Bosch, Cisco, Dell and Huawei.

▪ Oracle does not promote integration with other public cloud providers

which can be considered limiting for customers that want more flexible

deployment options and operate across multiple clouds.

▪ Oracle is less visible in the IoT-related markets of AI and machine

learning than other cloud providers such as IBM and Microsoft Azure.



About the author

Ahmed Ali (Senior analyst) is the lead analyst for Analysys Mason's IoT Platforms and Technology research programme. His research covers

IoT software, applications and solutions used by service providers to enable their IoT offerings. Prior to joining Analysys Mason, Ahmed worked

as a senior analyst at ABI Research for more than 3 years, where he was part of the next-generation mobile network research programme,

covering wireless and core mobile markets like small cells, in-building solutions, network virtualisation, unlicensed spectrum, and other 4G and

5G technologies. Ahmed holds a master's degree in Electronics Communications and Computer Engineering from the University of Nottingham

and a bachelor's degree in Electrical Engineering from the University of Khartoum, Sudan.



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Analysys Mason Oracle: IoT cloud service · supply chain solution that is ready to deploy. Furthermore, Oracle has developed more inclusive industrial solutions such as the Digital