By Stephen Nellis
(Reuters) - Oracle Corp (NYSE:ORCL) on Tuesday launched a cloud computing service powered by data center chips from Ampere Computing based on technology from Arm Ltd, the second major cloud company to offer an Arm-based service after Amazon.com (NASDAQ:AMZN)'s Amazon Web Services.
Cloud providers are some of the biggest buyers of chips because they rent out the computing power they generate to thousands of other companies. Until recently, however, almost all the chips cloud services bought came from Intel Corp (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) because most business software is written to run on those processors.
That began to change in 2018 when Amazon, the largest cloud provider, announced a service using its own custom chip made with intellectual property from Arm, the British firm whose technology already underlies most smartphone chips and is steadily making its way into laptops and data centers to challenge Intel and AMD.
Oracle on Tuesday joined the fray with chips from Ampere Computing, the company founded by former Intel President Renee James, who also sits on the board of Oracle. Oracle said it would rent out the chips at 1 cent per computing core per hour, less than half of what it said were its rivals' comparable rates.
"We’re at an inflection point in the industry,” Clay Magouyrk, executive vice president of Oracle Cloud Infrastructure, told Reuters in an interview. "Now that there’s a very competitive Arm product, I view my job as to offer my customers value and choice.”
Oracle also announced a range of initiatives to help expand the amount of business software that runs on Arm chips, a move that could help its rivals. Microsoft Corp (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) Inc's Google do not yet offer Arm-based cloud services to the public, but Magouyrk said he expects they will -- and that all cloud customers will eventually benefit from the competition.
"We’ll be ahead of them in that regard, but I also think they’ll have Arm offerings and they’ll be highly competitive. I view this is a multi-year process where Arm becomes ubiquitous on the server," Magouyrk said.