Streamlining Generative AI for Enterprises
Analysts believe that Oracle offers enterprises a more streamlined approach to lowering the costs and complexities associated with continuously training large language models (LLMs) on organizational knowledge. This is a significant obstacle for many enterprises, apart from a few use cases in customer experience and call center applications.
Ron Westfall, research director at The Futurum Group, highlights Oracle's key differentiation in its ability to drive generative AI innovation across the enterprise. This is due to Oracle's vast portfolio of Fusion and NetSuite applications, AI services, and infrastructure, as well as its machine learning (ML) capabilities in data platforms like MySQL HeatWave Vector Store and AI Vector Search in Oracle Database.
Optimizing for Cost and Complexity
According to Bradley Shimmin, chief analyst at Omdia, Oracle is integrating fundamental elements of generative AI into its core offerings, especially databases, to optimize compute resources and reduce costs. This is crucial as enterprises grapple with the immense scale and latency requirements of deploying AI models with billions of parameters.
Shimmin emphasizes that the underlying principle is to minimize the movement of data between different systems, which can be expensive and introduce latency. Companies like Oracle, with their optimized cloud infrastructure from database processing to chip networking and data retrieval, are well-positioned to provide differentiated value to customers by lowering complexity and enhancing performance.
Challenges in Generative AI Services
Oracle's plan might attract big business clients, Andy Thurai, who is a main analyst at Constellation Research, thinks that Oracle is "far behind" compared to its competitors when it comes to providing generative AI models and services.
Thurai says that Oracle's OCI Generative AI Service is not as strong as AWS's. AWS has more choices and features than Oracle's service. Thurai also points out that Oracle does not have many large language models (LLMs). This makes their service less useful compared to others in the market.
Potential Advantages for Oracle Customers
However, Thurai acknowledges that Oracle's choice to offer the generative AI service both in the Oracle Cloud and on-premises via OCI dedicated regions is a somewhat unique proposition that may be attractive to some large enterprise customers, especially those in regulated industries.
The analyst suggests that the option to integrate with Oracle's ERP, HCM, SCM, and CX applications running on OCI could make the Oracle AI services more appealing, if priced competitively, for their user base. Failure to do so could give AWS an advantage in capturing enterprise customers.
Oracle's Three-Tier Generative AI Strategy
In the last year, Oracle has been introducing its three-level generative AI plan across various product lines. The company recently launched OCI Generative AI Service, offering a managed platform where businesses can utilize pre-trained models or adjust their own models using their specific data.
This service, together with Oracle's other AI and ML features in its database and application products, shows the company's attempt to be seen as a strong option for Oracle AI services by business clients.
As the generative AI landscape continues to evolve, Oracle's focus on streamlining the adoption and scaling of these technologies, while addressing the cost and complexity challenges, could give it a competitive edge in the enterprise market.
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