Oracle boosts cloud ambitions with help from TikTok, Trump
September 20 2020 09:56 PM
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Signage is displayed outside the Oracle Corp headquarters campus in Redwood City, California. Oracle
Signage is displayed outside the Oracle Corp headquarters campus in Redwood City, California. Oracle’s deal to attain a 12.5% stake in TikTok Global and provide computing services to the video-sharing app furthers the software maker’s years-long plan to become a cloud computing heavyweight.

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Oracle Corp’s deal to attain a 12.5% stake in TikTok Global and provide computing services to the video-sharing app furthers the software maker’s years-long plan to become a cloud computing heavyweight.
Executive chairman Larry Ellison leaned on his company’s close ties to the Trump administration to land the partnership with the newly formed company, which will help fulfil an ambitious strategy outlined with fanfare half a decade ago to become a credible cloud rival to Amazon.com Inc and Microsoft Corp.
Retailer Walmart Inc will buy as much as 7.5% of TikTok Global, which will be headquartered in the US and pursue a public listing in less than a year, the companies announced on Saturday in a statement.
While other Silicon Valley giants have kept US President Donald Trump at arm’s length, Oracle has embraced him, which may have helped the company gain preliminary US approval for the deal. Ellison spoke directly with the president Friday, two days after Trump said that he “conceptually” didn’t like the TikTok proposal, which would leave computer code and ownership mostly in the hands of its Chinese parent Bytedance Ltd.
There’s little to indicate the investment structure of the deal has dramatically changed since then, but Trump nonetheless gave his blessing Saturday. The deal does call for the addition of 25,000 jobs, the creation of a $5bn education fund, a mostly US led board and several precautions aimed at safeguarding the data of American users.
There are very few leaders of Fortune 1000 companies who back Trump and the president is “giving a cloud contract and investment opportunity” to a firm “whose CEO is openly supporting him,” said Scott Galloway, a professor of marketing at New York University. “The only way I would describe the proposed agreement is strange and a giant step backward for the government’s approach to capitalism.”
The administration’s assent gives the Redwood City, California-based company a desperately needed win. Oracle, the world’s second-largest software maker after Microsoft, has struggled to find its footing in the fiercely competitive public-cloud market. 
In 2019, Oracle’s share of the cloud infrastructure market was so small that Gartner lumped it into an “Others” category of niche players.
“For Ellison and Oracle this is a strategic win on the infrastructure/cloud front by inking this partnership and should competitively help its efforts within the Beltway going forward,” Dan Ives, an analyst at Wedbush Securities, wrote in a note. “A TikTok technology partnership is a symbolic shot in the arm and could have positive financial ripple impacts.”
Ellison’s courtship of the president predates this business opportunity. In February, the Oracle co-founder, who is the world’s ninth-wealthiest man, let Trump use one of his California estates to host a political fund-raiser. Not long after, he offered his company’s help in building a database to track the effects of hydroxychloroquine, which the president said was a treatment for Covid-19. The anti-malaria drug proved ineffective.
Trump has expressed his admiration for Ellison on more than one occasion, calling him a “tremendous person” in August and saying Oracle was a “great company.”
”I have a high respect for Larry Ellison,” the president said earlier this month. “He’s somebody I know. He’s been really a terrific guy for a long time.”
Oracle chief executive officer Safra Catz supported Trump since before his administration began, visiting him in Trump Tower after the 2016 election, serving on his transition committee and dining with him at the White House. Most recently, Catz personally donated more than $125,000 to the president’s re-election bid this year.
Last year, Oracle missed out on a deal to provide cloud services to the US Department of Defense. Catz told Trump at a 2018 dinner that the process was unfair and designed to favor Amazon, Bloomberg reported. Amazon had been widely expected to win the contract, but Microsoft instead prevailed. Amazon sued the US government, alleging that Trump unfairly interfered in the process.
The Pentagon deal, valued at $10bn over a decade, could have helped Oracle catch up to rivals. For more than half a decade, the company has promised to become a cloud powerhouse, with Ellison in 2014 saying that year would be an “inflection point” in its cloud advancement.
Oracle’s heritage is producing essential databases that help businesses process transactions – high-priced technology that was stored in client’s own server farms.



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