Oracle revealed April 28 that high-flying video communications provider Zoom is now using Oracle Cloud Infrastructure (OCI) to support its core meetings service. Zoom has seen unprecedented growth because the video service is being used for a wide variety of use cases, including virtual parties, homework sessions, company meetings, Pilates classes and the most recent NFL draft. With use like that, it’s no wonder that Zoom needed to beef up its cloud capabilities, and so CEO Eric Yuan tapped Oracle Cloud for that.
Despite Warming Up to Cloud Recently, Oracle Lags in Cloud Mindshare
The decision to use OCI is somewhat a surprise, given Oracle isn’t exactly a household name in cloud. TechCrunch published a chart from Synergy Research positioning OCI as a niche player, which it has been for several years. Also, Oracle’s attitude around cloud historically had long been negative, although it was forced to move most of its applications and virtualized infrastructure to the cloud over the last three or four years. Co-founder Larry Ellison no doubt has had to bite his tongue many times, because for years he criticized and downplayed cloud services as “overrated,” “idiocy” and simply “connected computers,” when most informed IT people knew better.
Now, here in 2020, Oracle’s main businesses have all shifted to the cloud, and Ellison has quit mouthing off against cloud services. Given the attitude Oracle had, the win with Zoom certainly shows how far the company has come.
To be clear, Zoom isn’t running all of its meetings in the Oracle Cloud. AWS, a major Oracle competitor, is and will continue to be its primary cloud provider, and the majority of its processing needs will be done by Amazon. However, it’s smart to not put all its eggs into a single basket, meaning Zoom needed a second cloud provider.
Go here to see an eSPEAKS video interview with Zeus Kerravala about the importance of this Zoom-Oracle deal to both companies.
What’s interesting is that, it’s my understanding that Zoom does have a small piece of its business fall to Microsoft Azure, and it chose to take its chips over to Oracle’s table instead of leveraging Azure more. If it didn’t want to use Azure, it could also have picked Google Cloud Platform, but it eschewed both of them for Oracle. I don’t know the reason, nor will Zoom likely ever share all the reasons why it didn’t use Azure or GCP, but perhaps it has to do with the cracks both are starting to show under the strain of COVID-19 that I pointed out in this eWEEK post.
Did Zoom Choose OCI Because of Competitive Reasons?
One reason that Zoom may have veered away from Google and Microsoft is that both of them compete with Zoom. Google has Hangouts and Microsoft has Teams. In practicality, Teams is certainly a formidable foe, but Google has never managed to establish itself as anything other than an afterthought in the collaboration space. Also, AWS has Chime, which is better than Hangouts, so that argument falls apart.
Zoom CEO Likes Oracle’s Performance and Support
So, if it’s not competitive, then I’ll take Zoom CEO Yuan’s words at face value. Obviously, CEOs say things to spin a story a certain way, and it’s possible Yuan is doing that here, but I’ve gotten to know him over the past year and find him to be very matter of fact. In a media advisory, he said: “We chose Oracle Cloud Infrastructure because of its industry-leading security, outstanding performance and unmatched level of support.”
Oracle isn’t the most popular brand in the world. Customers have told me it can be difficult to work with, it's expensive and the reps are often arrogant. But the company does have a security-first mentality and stands by its products with outstanding support. Also, its cloud does perform at scale, and that’s what Zoom needs right now.
I don’t believe the decision to add Oracle is an indictment of AWS. Rather, Zoom needs a second cloud provider. I had a back-channel discussion with someone at Zoom, and he told me AWS has been and will continue to be important, but OCI will be handling some of the video meeting traffic.
For a company that was anti-cloud for a long time, winning Zoom's business—even as a secondary provider—is a huge feather in Oracle’s cap. I think if given the opportunity, customers will find OCI can go toe-to-toe with the other cloud companies. Let’s see if Oracle can parlay this into something bigger.
Zeus Kerravala is an eWEEK regular contributor and the founder and principal analyst with ZK Research. He spent 10 years at Yankee Group and prior to that held a number of corporate IT positions.