Oracle Chairman Larry Ellison
CNBC learned that Alphabet, Google’s parent company, plans to stop using Oracle financial software in the next few weeks and start using SAP software.
Google told employees in an e-mail viewed by CNBC that Alphabet and Google’s core financial systems will switch to SAP in May. The move is only related to the software Google uses to track financial conditions, and there is no sign that the company is moving other systems from Oracle.
This change occurred at a time when Google and Oracle compete increasingly fiercely in the cloud computing market, and Amazon, the leader of cloud services, has also taken similar measures. In the past few years, Amazon has greatly reduced its use of Oracle software in favor of its own cloud services.
This shift seems to have nothing to do with the long-term litigation between Google and Oracle regarding the use of Java code in the application programming interface of Google̵
Oracle competes with Google to sell public cloud resources for hosting applications to organizations. For years, Oracle has refused to certify its long-standing database software for Google’s cloud, which means that customers are not sure whether they can host Oracle databases in Google’s cloud without violating Oracle’s licensing policies.
Ellison said at a meeting with analysts in 2018: “We are not working with Google because we are trying to compete with Google.”
The lack of certification has become a problem for Google’s cloud business as it tries to win business from large companies, many of which use Oracle database software. A person familiar with Google’s cloud business said that as a result, Google began to focus more on deploying SAP database software in the cloud. In addition, this year Google introduced a method to run Oracle databases on bare metal without virtualization technology.
A Google spokesperson said: “Google Cloud actively enables Oracle customers to run their Oracle database workloads on Google Cloud through our Bare Metal Solution. But this is completely separate from our decision as a financial software enterprise customer. The system transitioned from Oracle to SAP.” told CNBC in an email. An Oracle representative declined to comment.
Oracle’s co-founder, chairman and chief technology officer Larry Ellison (Larry Ellison) regularly demonstrates how the company agrees to use Oracle’s software and services. In March, Ellison used one-third of Oracle’s 45-minute revenue call to talk about customer activities. He said Oracle will attract more than half of SAP customers.
It is not clear how much Google has paid Oracle to purchase the financial software. Despite this, Ellison boasted about his business with Google. He said in a meeting with analysts in 2019 that when Google classifies a large amount of information, the data “actually resides in an Oracle database.” This may still be the case, because the move is only related to Oracle’s financial software.
Another person familiar with the matter said that the migration from Oracle financial software requires months of work and a lot of engineering resources.
Affected by this news, Oracle stock price fell slightly, while SAP stock price rose and closed up 4.8%.
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