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Oracle Buys Dyn to Match Internet Offerings with Microsoft, AWS

Dyn purchased by Oracle for cloud services
To flesh out its cloud product line, Oracle is adding Dyn's DNS services to offer similar internet capabilities as rivals AWS and Microsoft.

It's another sign that 2016 is the year of cloud for Oracle.

Oracle this week agreed to purchase internet backbone company Dyn in a move intended to expand its capabilities for cloud computing. The move comes despite Dyn being recently in the news as the target of a major distributed denial-of-service attack that temporarily disrupted the activity of numerous big websites.

Still, Dyn DNS expertise proved compelling for Oracle, which is playing catch-up to cloud computing leaders like Amazon and Microsoft. Dyn DNS and cloud performance management will help extend Oracle's cloud computing platform, according to a statement from Thomas Kurian, president of product development at Oracle.

Dyn monitors and optimizes internet and cloud application traffic across a global network. The company, formally called Dynamic Network Services Inc., claims to drive "40 billion traffic optimization decisions per day." As such, it's something of an internet lynchpin, as was shown when Dyn unintentionally made headlines as the target of an Oct. 21 denial-of-service attack. That event disturbed the normal domain name system (DNS) services -- and operations -- of big sites such as GitHub, Twitter, Reddit and The New York Times.

Disruption in Cloud Model

Under the Oracle umbrella, the Dyn DNS capabilities would compete with domain name system offerings from Amazon Web Services, which fields the Amazon Route 53 DNS service, and Microsoft, which provides Azure DNS.

The fact that some cloud competitors have such DNS skills isn't crucial, according to David Linthicum, senior vice president at consultancy Cloud Technology Partners Inc. in Boston. Because DNS technology is broadly provided, Oracle's purchase can be seen as tactical, in his estimation.

"I don't see it on the critical path to becoming a top cloud provider," he said. "Dyn is a target of opportunity for Oracle."

Looking ahead, Linthicum said Oracle will be challenged to combine Dyn DNS into a synergistic offering that "will make sense to the market."

"The cloud model is directly disruptive as to how Oracle has traditionally sold its technology," he said. "But they really have no choice but to move to the cloud."


Dyn Deal Follows Cloud Spree

At its Oracle OpenWorld 2016 event, company founder and CTO Larry Ellison vowed to compete more aggressively in cloud services. That means providing optimized hardware, networking and other capabilities that dramatically reshape the nature of his company.

If completed, the Dyn deal would join a list of 2016 Oracle cloud-related acquisitions that includes cloud customer relationship management vendor Opower, cloud security player Palerra and cloud ERP pioneer NetSuite.

"Oracle will continue to buy up companies that will prove their cloud computing strategy," Linthicum said.

While Oracle didn't immediately disclose the cost of the transaction, a report by freelance business writer Dan Primack suggested the price was slightly over $600 million. Until the deal closes, the two companies will continue to operate independently. Oracle declined to comment further about the deal for this story.

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