Oracle Chairman Larry Ellison
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Google parent Alphabet plans to stop using Oracle financial software in the coming weeks and start using SAP software instead, CNBC has learned.
Alphabet and Google’s main financial systems will move to SAP in May, Google told employees in an email that CNBC looked at. The move only affects the software Google uses to track its finances, and there is no indication that the company is removing other Oracle systems.
The change comes as Google and Oracle increasingly compete in the cloud computing market, and follows a similar move by cloud leader Amazon, which over the course of a number of years sharply reduced the use of Oracle software in favor of its own cloud services. .
The move does not appear to be related to the lengthy lawsuit between Google and Oracle over Google’s use of Java code in the application programming interface for Google’s Android operating system. Earlier on Monday, the Supreme Court ruled that Google copying Java code was fair use.
Oracle competes with Google in selling public cloud resources from organizations for hosting applications. For years, Oracle 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 licensing policies.
“We are not partnering with Google because we are trying to compete with Google,” Ellison said at a meeting with analysts in 2018.
That lack of certification became a problem for Google’s cloud company as the company wanted to beat 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 operations, who asked not to be named when discussing confidential business matters. In addition, this year Google introduced a way to run the Oracle database on a bare-metal server that does not contain virtualization technology.
“Google Cloud actively enables Oracle customers to run their Oracle database workloads on Google Cloud through our Bare Metal solution. But that is completely separate from our decision as a corporate financial software customer to transition our financial systems. from Oracle to SAP, ”a Google spokesperson told CNBC in an email. An Oracle representative declined to comment.
Larry Ellison, co-founder, chairman and chief technology officer of Oracle, regularly demonstrates how companies agree to use Oracle’s software and services. In March, Ellison spent a third of Oracle’s 45-minute revenue call talking about customer activity, and said Oracle would pick up more than half of SAP customers.
It is not clear how much money Google paid to Oracle for the financial software. Still, Ellison has boasted about his business with Google. At a meeting with analysts in 2019, he said that when Google catalogs massive amounts of information, that data is “ actually in Oracle databases. ” That may still be the case as this step only pertains to Oracle’s financial software.
The effort to migrate from Oracle’s financial software required months of work and extensive technical resources, another person familiar with the move said.
Oracle shares fell slightly in the news, while SAP shares rose and closed 4.8%.
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