Oracle buys acclaimed provider Dyn hoping to get around Amazon in the cloud market

Oracle continues to grow in the cloud services market. It is known that the founder of the company Larry Ellison wants to remove Amazon from a leading position in this market.

The next step in the fight against the competitor was the purchase of the American DNS provider Dyn. This will allow the company to expand the scope of its cloud solutions. The sale of Dyn became known on Monday, November 21.

Fortune journalist Dan Primack suggested that the sum is in excess of $ 600 million. According to a Fortune source close to the deal, Oracle will pay between $ 600 and $ 700 million for this purchase.

The publication notes that in its history, Dyn has attracted no more than $ 100 million investment. Not only Oracle claimed to buy Dyn: IBM was also interested in this company, an informed source told Fortune.

Dyn has over 3,500 corporate customers, including Netflix, Twitter, Pfizer, and CNBC.
“Oracle gets the most important unit for building its infrastructure as a service (IaaS) in the form of DNS, load balancing, content delivery and monitoring. This will instantly increase confidence in Oracle's cloud infrastructure, ”said Janakiram, an independent IT consultant at MSV.

The purchase of Dyn will give Oracle the opportunity to offer customers service packages that will combine IaaS (“infrastructure as a service”) and PaaS (“platform as a service”). In addition, Oracle customers will have access to Dyn tools to monitor Internet performance.

On October 21, 2016, Dyn DNS servers were subjected to a massive DDoS attack, which deprived users of access to such popular resources as Twitter, Amazon, PayPal, and Netflix. A total of 85 well-known sites were unavailable or intermittent.

The power of a cyber attack was 1 Tb / s. The damage from the attack is estimated at $ 110 million. Responsibility for its implementation took on the hacker groups RedCult and New World Hackers. A distinctive feature of this DDoS attack was the use of botnets created from equipment in the Internet of Things field.

Dyn is an American company that monitors Internet performance, optimizes online infrastructure, provides domain registration and mail services. The company was founded in 2005 and is based in Manchester, New Hampshire.

Initially, Jeremy Hitchcock and his cofounder Tom Daily launched Dyn as a free open source project. At that time, they were still studying at the Polytechnic Institute of Worcester.
Hitchcock and Daily put the server right in the dorm room. When they had difficulties with money, the project was on the verge of closure.

“We posted [on the project’s website] a donate button, but not much money was received. Then we told users that if they do not give us $ 25 thousand in a week, then we will close. [After that] we got $ 40,000, ” Hitchcock told Business Insider.

Oracle's ambitions in the cloud market

In September 2016, Larry Ellison announced the creation of second-generation IaaS data centers at Oracle and said that Amazon’s leadership in the cloud market is coming to an end . The company's goal is to offer Oracle customers a package of services where IaaS, PaaS and SaaS (“Software as a Service”) will be combined.

Amazon's dominance has come to an end. In the future, he will face serious competition. Our Generation2 IaaS solutions offer 2 times more computing power, 2 times more RAM, 2 times more storage and 10 times more I / O resources, and at a price 20% lower than Amazon Web Services. The Infrastructure-As-A-Service (IaaS) provides Oracle with a huge opportunity to add the cloud infrastructure to our fast-growing SaaS and PaaS businesses.

In addition to Amazon, Oracle's competitors in the cloud market are Microsoft, IBM and Google. Each of these companies has a much larger market share. At the end of 2015, Amazon controlled 31% of the market, Microsoft - 9%, IBM - 7%, Google - 4%, and Oracle was not even among the top five. However, the company is showing rapid growth: in the first fiscal quarter of 2017, sales of SaaS and PaaS grew by 82%.

Ready-made business can help Oracle quickly catch up with competitors. In particular, this month the company received the approval of the required number of shareholders of the cloud provider NetSuite for its purchase for $ 9.3 billion.