How Oracle Won Automaker Subaru As A Cloud Customer By Being Cheaper Than The Competition

How Oracle Won Automaker Subaru As A Cloud Customer By Being Cheaper Than The Competition

  • Japanese automaker Subaru uses Oracle’s cloud for its high-performance computing.
  • Subaru told Insider that Oracle is a third of the cost of its cloud competitors.
  • As automakers migrate to the cloud, price is becoming a key factor in vendor selection.

Seeking to cut its technology costs, Japanese automaker Subaru began looking around a year ago for a cloud computing provider to supplement its in-house data centers.

The automaker was looking for a cloud provider to power its high-performance computing, a form of data processing capable of performing fast and complex calculations that allow the company to run simulations to test vehicle safety and performance .

Yoshihiro Takekuma, a leader in Subaru’s IT operations and management group, told Insider that the automaker chose to move data to Oracle’s cloud because it offered a price that turned out to be third. that of other cloud providers. That made choosing Oracle “an easy decision,” Takekuma said, adding that Subaru received a discount.

Indeed, Oracle has touted the price of its cloud platform as an advantage over rivals Microsoft Azure, Google Cloud and cloud computing market leader Amazon Web Services. The database giant recently reported strong quarterly earnings with 45% growth in cloud revenue, a sign that it is making progress in the field, although the company is still far behind Amazon, Microsoft and Google in terms of overall cloud market share.

High-performance computing applications have long been hosted in automaker data centers, but in recent years cloud providers have come up with their own solutions that allow customers to use hardware hosted by cloud providers. This can help automakers save on operating costs for these servers and allows them to expand beyond the limited computing power of their internal data centers.

Taylor Newill, senior director of motorsport engineering who helped launch Oracle’s high-performance computing service in 2018, told Insider that Oracle was one of the first to offer HPC on its servers, which makes the opportunity to take on automakers and manufacturers particularly attractive.

“For us, the backbone of the cloud was high-performance computing,” Newill said.

Yet versions of HPC from AWS, Microsoft, and Google Cloud also target these same automakers, and all major automakers use them.

This makes price and discounts especially important for these customers, who can rack up high bills for the intensive processing power. Discounting is also a common tactic to win over these big-name customers, especially as using multiple cloud providers has become more common.

Subaru completed moving its data centers to Oracle’s cloud in about six months, anticipating a 30% reduction in its technology costs after moving to the cloud, Takekuma said. Although the automaker is now spending roughly the same amount as before, Takekuma expects the costs to even out once Subaru transfers some data to its own servers in a few years. Oracle says automakers can see a 50% reduction in total costs over five years by moving to its cloud from internal servers.

Overall, Subaru plans to use a mix of its own data centers and Oracle’s cloud, Takekuma said, adopting a hybrid model that allows it to leverage the speed of the cloud and its own infrastructure. . Subaru also uses other cloud providers in other parts of the business, including Google Cloud for some of its machine learning and artificial intelligence capabilities.

Newill said Oracle, which has publicly embraced the use of multiple cloud providers among its customers and has a formal partnership with Microsoft, made some technical changes designed to make it easier for customers.

“These automakers are global companies with all-cloud relationships,” Newill said. “So it’s absolutely critical that our data transfer, our authentication, all of those things, can interface smoothly with other cloud providers.”

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