Last Updated: January 18, 2022
It seems that Google has decided to distance itself from its competition by abandoning Oracle’s finance software and migrating to SAP. The news comes as a double whammy for Oracle, which just lost its major copyright lawsuit against Google.
If you haven’t heard of Oracle—it’s a relational database management system (RDBMS) that primarily offers its services to large enterprise businesses. After not rushing too much to embrace the cloud, it’s now hoping to establish itself as a leading cloud computing vendor.
SAP (Systems Applications and Products) also provides cloud-based solutions for data management “that facilitate effective data processing and information flow across organizations,” according to their website.
Both companies are well-established in their field and compete in the same market.
In 2010, Oracle sued Google for copyright infringement. Namely, Google was accused of plagiarizing Oracle’s Java software by copying 11,330 lines of code and using it to create its mega-popular OS—Android. The court initially ruled in favor of Oracle.
However, after a 2018 appeal by Google, the case was revived and finally settled on April 5, 2021. The US Supreme Court ruled that Google’s inclusion of the code constituted fair use. The ruling judge stated that keeping copyright on their code makes it a “lock limiting the future creativity of new programs. Oracle alone would hold the key.”
Of course, Oracle representatives made their disagreement known, stating that this decision increases Google’s power and condones its monopolistic behavior.
Cloud Computing Wars
There’s no doubt that the competition in the cloud computing market is getting fiercer. Companies are focusing on developing their own software solutions instead of relying on others, which is why there are so many accounting and even bookkeeping solutions around nowadays.
Such was the case with Amazon, which slowly transitioned away from Oracle’s software to focus on its own cloud services. It seems that Google is now following in Amazon’s footsteps for similar reasons by ceasing its usage of Oracle’s finance software (while its other systems will remain on Oracle) and moving on to SAP.
It’s no secret that Oracle and Google have become fierce rivals as Google is also developing its own cloud computing services. Both companies offer public cloud resources, hoping to appeal to large enterprise clients. Although they’ve been working together for years, Oracle refused to certify its database software for Google’s cloud, costing Google a good number of customers.
Oracle’s stance has been clear during the last few years: their CTO—Larry Ellison—has at one point said, “We don’t partner with Google because we’re trying to compete with Google.” This kind of behavior forced Google to start looking into other options, and they found an alternative in SAP.
Ellison is no stranger to a healthy dose of boasting—he often mentioned Oracle’s business with Google and other large businesses as well as Oracle’s intention to poach more than half of SAP’s customers. We can only imagine he didn’t take the latest news all too well.
This latest development caused a dip in Oracle’s shares, while SAP’s shares increased by 4%. All companies involved will undoubtedly continue growing and working efficiently, but Oracle will need some time to recover from this blow.