Why Amazon and Microsoft Shouldn't Lose Sleep Over Oracle's New Cloud Database

Though Oracle's new 18c database could lower labor costs for companies managing their own databases, it's still competing against reasonably-priced managed services from rivals.

Oracle Corp. (ORCL) is eager to declare the latest version of its flagship database is far more intelligent and user-friendly than the databases commonly run today on cloud infrastructure platforms from Amazon.com Inc. (AMZN) , Microsoft Corp. (MSFT) and other rivals. On a narrow, technical level, that just might be true. But it's also an apples-to-oranges comparison.

Oracle isn't merely competing against cheaper rival databases here, but against reasonably-priced services that pair database licenses with human admins. The company's response to this threat is something of an end-around, hoping to maintain its premium software pricing in part by making those human admins less necessary. It's an intriguing gambit, but it's far from a given that this will be a game-changer for Oracle, considering what the competition has been up to.

Never shy to make big claims, Oracle asserts its new 18c database "uses ground-breaking machine learning to enable automation that eliminates human labor, human error and manual tuning." 18c is said to be capable of upgrading and patching itself, as well as adjusting the computing and storage resources available to it, while still running. That, Oracle says, allows its new Autonomous Database Cloud service, which relies on 18c, to achieve 99.995% reliability (less than 30 minutes of annual downtime), as well as lower the risk of human error.

Oracle also launched Autonomous Data Warehouse Cloud, a service for data warehousing that's based on 18c. It involves taking in data from many sources, and converting it into standardized database tables that can be used for analysis and reporting.

It, too, is said to use machine learning to automate administrative tasks. Oracle also promises a high level of performance by having the service run on its high-end Exadata server/storage systems.

The big catch: Though Oracle (like Amazon, Microsoft, etc.) has long offered fully-managed cloud database services, it also offers cheaper self-managed services for which companies are responsible for managing the database copies running within Oracle's cloud data centers. A lot of the automation features built into 18c are clearly aimed at lowering labor costs for and increasing the convenience of its self-managed offerings.

However, pricing for the fully-managed services offered by rivals still appears to be pretty competitive -- particularly for the use of lower-cost databases. For example, Amazon Web Services' (AWS) very popular RDS managed database service costs about 50% less when running the open-source MariaDB database than it does when running Oracle's database. And it costs about 40% less when using Amazon's Aurora database engine, which aims to provide enterprise-class performance and reliability while using the open-source MySQL and PostgreSQL databases.

Microsoft and Alphabet Inc./Google (GOOGL) also offer aggressive pricing for their managed database services. They also offer Cosmos DB and Cloud Spanner, respectively, a pair of innovative services for running distributed databases whose servers could be thousands of miles apart. And Amazon, Microsoft and Google all offer managed data warehousing services.

Jim Cramer and the AAP team hold a position in Alphabet for their Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells GOOGL? Learn more now.

And while 18c has some impressive features, that doesn't necessarily mean it can automate all of the tasks that managed database services typically rely on admins to do.

Amazon's RDS, for example, manages database backup and recovery, patching and -- should a company choose this option -- the management of a replica database in a different "availability zone." Microsoft claims its Azure SQL Database managed service, which relies on its SQL Server database, handles "all patching and updating of the SQL code base seamlessly and abstracts away all management of the underlying infrastructure."

Also: Amazon and Microsoft are hardly slouches when it comes to machine learning investments, and will probably make greater use of it in future database releases. As it is, Microsoft claims Azure SQL Database "learns about your database patterns and enables you to adapt your database schema to your workload," and can also intelligently tune a database's performance.