Oracle Chairman Larry Ellison
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Google parent Alphabet plans to stop using Oracle financial software in the coming weeks and instead use SAP software, CNBC has learned.
Alphabet and Google’s core financial systems will transition to SAP in May, Google said in an email to CNN. The move is only related to the software that Google uses to track finances, and there is no indication that the company is moving other systems away from Oracle.
The change comes as Google and Oracle increasingly compete in the cloud market, and follows a similar move by the leader of cloud Amazon, which has significantly reduced the use of Oracle software over a number of years in favor of its own cloud services.
The switch does not appear to be linked to the long-running lawsuit between Google and Oracle over Google’s use of Java code in the application programming interface for Google’s Android operating system. Earlier Monday, the Supreme Court ruled that Google’s copying of Java code was fair use.
Oracle competes with Google to sell public cloud resources to organizations for offering applications to organizations. For years, Oracle has refused to certify its long-standing database software for Google’s cloud, meaning customers were unsure whether they could host Oracle databases in Google’s cloud without violating Oracle’s license policy.
“We are not working with Google because we are trying to compete with Google,” Ellison said during a 2018 meeting with analysts.
The lack of certification has become a problem for Google’s cloud business as it wanted to take advantage of large companies, many of which use Oracle database software. As a result, Google has begun to focus more on implementing SAP’s database software in the cloud, asking one person familiar with Google’s cloud business not to be named and discussing confidential matters. In addition, this year Google introduced a way to manage Oracle database on a bare metal server that does not include virtualization technology.
“Google Cloud is actively enabling Oracle customers to run their Oracle database workloads on Google Cloud through our Bare Metal solution. switching systems from Oracle to SAP, “said Google spokesman. said CNBC by email. An Oracle representative declined to comment.
Larry Ellison, co-founder of Oracle, chairman and chief technology officer, regularly gives a show of how companies agree to use Oracle’s software and services. In March, Ellison spent one-third of Oracle’s 45-minute revenue call on customer activity, and he said Oracle would reach more than half of SAP’s customers.
It is not clear how much money Oracle paid for the financial software. Still, Ellison boasted about his business with Google. During a meeting with analysts in 2019, he said that when Google catalogs large amounts of information, the data actually sits in Oracle databases. This may still be the case, as this step only applies to Oracle’s financial software.
The attempt to migrate some of Oracle’s financial software required months of work and extensive engineering resources, said another person familiar with the move.
Oracle shares fell slightly from the news, while SAP shares rose, closing 4.8%.
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