Oracle President Larry Ellison
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Alphabet, the father of Google, plans in the coming weeks to stop using Oracle’s financial software and instead start using SAP software, CNBC found.
The main financial systems of Alphabet and Google will be transferred to SAP in May, Google told employees in an email that CNBC read. The change relates only to the software that Google uses to control finances, and there is no indication that the company is withdrawing other systems from Oracle.
The shift comes at a time when Google and Oracle are increasingly competing in the cloud computing market and following a similar move by cloud leader Amazon, which over the years has largely reduced the use of Oracle software in favor of its own cloud services.
The move does not appear to be linked to the longstanding process between Google and Oracle regarding Google’s use of Java code in the application programming interface for Google’s Android operating system. On Monday morning, the Supreme Court ruled that Google’s copy of the Java code was fair use.
Oracle competes with Google to sell public cloud resources to application hosting organizations. For years, Oracle has refused to certify its long-standing database software to the Google cloud, which means that customers were unsure whether they could host Oracle databases in the Google cloud without conflicting with Oracle’s licensing policies.
“We have no partnership with Google because we are trying to compete with Google,” said Ellison at a 2018 meeting with analysts.
This lack of certification has become a problem for Google’s cloud business, which sought to win business from large companies, many of which use Oracle database software. As a result, Google began to focus more on deploying SAP’s database software in the cloud, said a person familiar with Google’s cloud business, who asked not to be identified to discuss confidential business matters. In addition, this year Google introduced a way to run the Oracle database on a bare-metal server that does not include virtualization technology.
“Google Cloud allows Oracle customers to run their Oracle database workloads on Google Cloud through our Bare Metal solution. But this is totally different from our decision as an enterprise financial software customer to transition from our Oracle financial systems for SAP, “a Google spokesman told CNBC in an email. An Oracle representative declined to comment.
Larry Ellison, Oracle co-founder, president and chief technology officer, regularly shows how companies are agreeing to use Oracle software and services. In March, Ellison spent a third of the 45-minute call about Oracle’s earnings talking about customer activity and said that Oracle would win more than half of SAP’s customers.
It is unclear how much money Google paid Oracle for the financial software. Still, Ellison bragged about his business with Google. During a 2019 meeting with analysts, he said that when Google catalogs large amounts of information, that data is “actually stored in Oracle databases”. This may still be the case, as this change refers only to Oracle’s financial software.
The effort to migrate from Oracle’s financial software took months of work and extensive engineering resources, said another person familiar with the change.
Oracle’s shares fell slightly with the news, while SAP’s shares rose, closing with a 4.8% rise.
TO SEE: Google Cloud will be a very profitable business: Investor