Tuesday, 15 September 2020 19:35

Oracle's TikTok buy will help its cloud prospects, add 'hip factor': claim Featured

Oracle's TikTok buy will help its cloud prospects, add 'hip factor': claim Image by iXimus from Pixabay

Database giant Oracle is buying TikTok to increase its relevance in the cloud market by demonstrating the scalability of its cloud platform, and also increase its "hip factor" with brands like Zoom, analysts from the American market research company Forrester claim.

The deadline for a US firm to buy TikTok or for the latter to be shut down is Tuesday US time. ByteDance, the owner of TikTok, was wooed by Microsoft, but then refused to cut a deal with that company.

In a blog post, the analysts said Oracle wanted to make up ground on AWS, Azure, Google Cloud and Alibaba Cloud, adding that the company had been trying to compete with IBM and grow its cloud in two dimensions simultaneously.

"[Oracle has been trying to] expand its penetration in traditional enterprise and prove its cloud platform’s scalability and the 'hip factor' with well-known brands like Zoom," the Forrester researchers said.

"Nothing is more hip than TikTok at the moment, and it has 100 million monthly active users in the US, putting a check mark by both of Oracle’s goals.

"This probably doesn’t buy Oracle much enterprise credibility, but it does buy the company visibility and exposure. Competitors have pioneered this approach: in 2017, Google Cloud won the right to host Snapchat’s infrastructure."

The analysts who put their name to the post were Jeff Pollard, vice-president and principal analyst; Jessica Liu, senior analyst; Glenn O'Donnell, vice-president and research director; Dave Bartoletti, vice-president and principal analyst; Keith Johnston, vice-president and group director; Charlie Dai, principal analyst; Xiaofeng Wang, senior analyst; Alla Valente, analyst; and Brian Kime, senior analyst.

The analysts pointed out that Oracle chief Larry Ellison had been working with the US Government for ages. "Oracle’s first customer was the CIA, and the company is named after a CIA project Ellison and his co-founders worked on prior to starting the company," they wrote.

"Based on the ambiguity in the current deal, it’s unclear exactly what degree of insight this will provide — and it appears Oracle gains little control over TikTok — but the links between the US Government and Oracle certainly make the deal more likely to pass through White House review, which is required before the partnership is authorised."

Selling TikTok to Oracle was also a positive for its owner, ByteDance as it would not have to reveal the IP that made TikTok work the way it does. Forrester said, adding that recent tech rules introduced by China made it impossible for ByteDance to sell its IP.

The analysts recommended that Oracle continue to allow the US TikTok team to continue developing the platform instead of trying to take over this function.

"But the US app could ultimately evolve and diverge from the ByteDance version of the app, which is not unprecedented: the WeChat app within China’s firewall is different and more robust than the WeChat app version outside China," the analysts pointed out.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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