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Why Zoom Chose Oracle
- jklinger410 6y agoConsidering that at least Google is a direct competitor, and Amazon is very aggressive at stealing ideas from their partners, I think choosing an alternative like Oracle makes sense simply from a business ecosystem and competition perspective.
- zelly 6y agoTrue, Oracle is so old and docile that they'd never attempt a competitor
- hindsightbias 6y agoOracle entering a consumer market would be great way to screw themselves. One can dream.
- Spooky23 6y agoPlus, Oracle will end up acquiring them, it’s unlikely that Zoom will last as a long term standalone business.
- oefrha 6y agoZoom market cap 38.24B (70% more than Twitter), Oracle market cap 167.05B. Can’t last as a long term standalone business and has to be acquired by Oracle? Sounds like a pretty baseless claim.
- quicklyfrozen 6y agoWon't =/= Can't i.e. they may been seen as an attractive acquisition
- Spooky23 6y agoOracle has that much cash on hand, and the market cap is inflated by the COVID outbreak. That market cap could be $10B in a week. Assuming that valuation will stay in place in the economic disaster that we find ourselves is a big leap. Where are they going to pivot to?
- MattGaiser 6y agoZoom is profitable, so I do not see why.
- johnqpub 6y agoAmazon has a direct competitor already: https://aws.amazon.com/chime https://aws.amazon.com/chime
- jklinger410 6y agoI thought this might be the case, I haven't used chime and didn't really research into Amazon's messaging capabilities.
- chance_state 6y ago>Amazon is very aggressive at stealing ideas from their partners Are there some examples of this? edit - this is somewhat related, from another comment in this thread: https://www.bbc.com/news/technology-40367626 https://www.bbc.com/news/technology-40367626
- jklinger410 6y agoI think Amazon as a company has earned a bad faith reading into all of their business ventures by bullying small sellers on their own platform by directly competing with them and using sales data to beat them in their own niche. I'm sure there is much less evidence of this at the cloud/enterprise level.
- TheSoftwareGuy 6y ago>Google is a direct competitor I think that people over estimate potential damages of being your competitors customer. Google is not going anywhere, with or without this contract, and if they want to make an investment in video conferencing, they already have more than enough capital & resources to do that. Staying away from GCP purely because it is under google would be a crazy decision
- davidwihl 6y agoAs of April 29, Google Meet is now free, which is seemingly direct competition to Zoom, especially with the emphasis on security. https://blog.google/products/meet/bringing-google-meet-to-more-people https://blog.google/products/meet/bringing-google-meet-to-mo... Opinion my own not Google's.
- awill 6y agoFirst, Google Meet is also not e2e encrypted. Second, Google Meet is not now free. They're rolling it out over several weeks. My account isn't activated yet. Is yours? Google is really, really late to game here. What was Google doing for the last 2 months while Zoom capitalized on our situation?
- haneefmubarak 6y agoGoogle Meet is "free" for 60 minutes, which conveniently enough won't be enforced until September. That's just a shady deal, especially if they end up trying to retire Hangouts chat and so normal users can no longer use free video / voice call services that they've come to rely on having for like 10+ years now. Don't get me wrong - I love Meet on my business accounts and along with all the other Apps in G Suite, it is well worth paying for. But I also value the fact that normal ass standard Google users have been able to have access to a semi-decent video and voice conferencing platform for over a decade now. I hope that doesn't change come September.
- mikestew 6y agoEven for free I won't use it. I already have solutions that I (and the business I work for) have been using for several months. (Personal: Skype or Zoom; Business: MS Teams) Those solutions work. Not only do I not assume that the Google solution won't be half-assed, I also do not assume that it will remain free, nor even remain in their product line for any reasonable length of time for that matter. In fact, being "free" makes even more leery that Google will axe it down the road. Regardless, if I (and I assume many beside myself) need a video conferencing solution, I would have found one by now and no longer need a "me, too" product.
- Aperocky 6y agoHeard of Chime? It's been there for years.
- hyperpape 6y agoI thought Corey Quinn's take was very smart: https://news.ycombinator.com/item?id=23013960 https://news.ycombinator.com/item?id=23013960. According to him, the cost of bandwidth is probably the issue, and would make Oracle a compelling choice even if Zoom didn't have negotiating leverage. Nota bene: it gives me no joy to say good things about Oracle. I hope it will not happen again.
- eloff 6y agoYeah, the other clouds charge way too much for bandwidth. For zoom this is probably their dominant cost. Also transfer between zones is expensive: $0.02/GB at AWS. And you typically need that if you're going to make any highly available system.
- tthrowaway365 6y agoZoom wouldn’t pay list. Realize cloud providers can provide offline pricing to Zoom that would match or beat the oracle network pricing for a “like” offering. Things like fixed cost throughput links, and fixed network pricing is available with contracting for large companies. It’s likely oracle simply “bought the business” and is loosing money on the hosting. Hoping to make it up with a co-sell commission based contract, or by leveraging this as PR/marketing. Cory Quinn is right. List price is expensive. But if you spend 1mil/year or more you shouldn’t be paying list. If you are zoom getting 90% off egress is totally negotiable.
- hyperpape 6y agoOf course, Zoom won't pay list. But they also won't pay list on Oracle either. I wouldn't trust the "10x" comparison, but the bottom line that it's more expensive seems reasonable. Corey Quinn seems like a smart guy with a lot of connections. If he doesn't regularly have big fish in the AWS ecosystem telling him (off the record!) "here's the deals we got", he's not doing his job right. If someone similarly knowledge comes back and say "actually, Oracle doesn't beat AWS on bandwidth when you're a big fish", I'll say not to trust this article.
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- afwaller 6y agoZoom probably benefits heavily from access to the lobbyists and lawyers which form oracle’s core product offering.
- koblas 6y agoThe article misses the Amazon competitive problem. Quite a few retail companies will not do business with companies that host on AWS infrastructure (e.g. Walmart). https://www.bbc.com/news/technology-40367626 https://www.bbc.com/news/technology-40367626
- exhilaration 6y agoEDIT: I misread the parent; it refers to retailers not using tools like Zoom because they run on AWS. Original comment: You mean like this part of the article? If you deliver a product on top of a third party cloud platform, that cloud can see all the telemetry data. Such access becomes problematic when that same cloud platform offers a competing product, which is why no big retailer would ever run their e-commerce operation on AWS.
- throw_away 6y agoThe parent is referring to a second order issue. Your quote talks about how competing companies don't want to use AWS for their own products because it would reveal traffic numbers and telemetry and Amazon could potentially later release a competing product. Parent is talking about how zoom's customers won't want to use zoom because they don't trust their corporate communications to be trunked over amazon.
- exhilaration 6y agoI reread the comment and you are absolutely correct. I've added an edit.
- hyperpape 6y agoI work at an enterprise SaaS product in the logistics space, and this is 100% a concern. A recent project had endless discussions about whether we could put it in AWS, or if whether customers would refuse to use it if that happened. That said, it was still an AWS/Azure/GCP discussion.
- kerng 6y agoThey already are using AWS and Azure, it's not that they are moving away from that.
- fomine3 6y agoOracle Cloud's outgoing transfer pricing ($0.0085/GB) is absolutely cheaper than top competitors (like Amazon EC2 US $0.05/GB for over 150TB/month). Could it be one of a reason?
- stingraycharles 6y agoThese are list prices, and absolutely nowhere near the price large consumers pay. If you commit to a certain bandwidth per month for an extended period of time, it’s not difficult to get 80%-90% discount. (I worked at a video delivery startup a few years back and these were exactly the type of discounts we would get)
- edmundsauto 6y agoI think the point of bringing this up is the price ratio between the services. If you get 80-90% off both, Oracle is still ahead.
- hinkley 6y agoAWS would have to offer an 83% discount just to match Oracle's list price. At an 80% discount Oracle doesn't even have to lift a finger.
- edmundsauto 6y agoOTOH, the absolute numbers matter. If it's $1,000K/yr for AWS, that's $100K/yr for Oracle. That could be a deciding factor - $900M difference OTOH, if you are getting 90% off the list on both, you're talking $100M vs $10M. That's enough where features, SLA, QoS, matters more ($90M).
- hinkley 6y agoNot sure I agree with your examples but I think I get your gist. Saving a little might not be worth the labor costs and risk differences between two solutions. Paying a bit more to contract out a class of problem could be the thing to do. Though probably not in Zoom's particular case. If this were Patagonia, or Home Depot, sure. Pay someone else's IT nerds to deal with the problem. But Zoom is IT through and through. They better understand the low level details of how their stuff works, or when they get into trouble they won't even see it coming, and we will wonder very loudly why not.
- arbitrage 6y agoLooking forward to the update from Zoom in about 18 months -- "Why we switched from Oracle"
- dade_ 6y agoWow, conspiracies everywhere. Oracle has switched their provider from Cisco WebEx to Zoom and the transition seems to have been very smooth. I don’t hear their employees complaining about it, they seem to like it. I think it is just reciprocal business. It isn’t as though zoom will switch Google, Amazon or Microsoft.
- ComodoHacker 6y ago>Based on Ellison’s video endorsement of Zoom, Oracle the company appears to be using Zoom wall-to-wall, instead of dog-fooding any internal product under development. Such endorsement usually precedes acquisition.
- dylan604 6y agoWould that make Zoom's Oracle fees go up or down?
- stevehawk 6y agoit means soon you won't be able to use Zoom internally unless you have a 32 CPU license and PeopleSoft. /s
- smnrchrds 6y agoOnly audio will be available in the community license. If you click on the video button, of course it will start the video, but since it is an enterprise feature, you'll get an audit notice and an invoice for a bajillion dollars in the mail. /s
- Torwald 6y agowhatever accounting says saves more taxes
- dr-detroit 6y agoThis is I think more a reflection of the Zoom experience that has made it so popular. I have supported many video conference platforms and people learn what they want to learn. Usually they do not learn how to host a meeting or connect to a meeting. People want to learn Zoom. En masse people were installing it at places like government, research universities, general motors and many more private sector where this type of thing should be impossible. All these organizations had to buy the pro version. They had no choice. It is cool. People are talking about it on Facebook (the coolest level a thing can attain) so the average person is happy to learn how to use it which puts in a class of maybe 10 or less applications that the average person is comfortable with.
- projomni 6y agoHalf garbage, half true. I think what the author forgot to say, which is really important is, zoom tested their workload on various paas platforms, and they liked oracle's price performance ratio. Also Oracle is so laser focused on big new logos, like Zoom or Slack. The author is obviously an outsider.
- verdverm 6y agoThis explains so much...
- user5994461 6y agoThe title should say Oracle cloud, otherwise it reads as the Oracle database.
- dang 6y agoRecent, related: https://news.ycombinator.com/item?id=23010868 https://news.ycombinator.com/item?id=23010868
- bitcharmer 6y agoGoing with Oracle however you want to paint it is not going to end well. There are hundreds of cases to prove it.
- nolaspring 6y agoReads like oracle needed discounted licenses in exchange for a presser about adding some infrastructure to oracles cloud
- SeanFerree 6y agoGreat article!
- contemporary343 6y agoPartly because Ellison is a big-time Trump supporter, maybe? A path to avoiding both legitimate and illegitimate/scape-goating inquiries from the administration.
- contemporary343 6y agoPartly because Ellison is a big-time Trump supporter, maybe? A path to avoiding both legitimate and illegitimate/scape-goating federal inquiries
- lasky 6y agoit’s all downhill from here.
- jariel 6y ago"The deeper strategic consideration, I think, is Zoom’s concern with AWS and Azure accessing its telemetry. " This is really messed up. If there is a 'real risk' AWS is reading your data on S3 ... then how on earth does their business survive? 80% of businesses are dealing with sensitive data.
- rbanffy 6y agoI think it's a shame Oracle doesn't offer SPARC instances in their cloud. Are they still competitive in performance against POWER9?
- haneefmubarak 6y agoFrom Wikipedia: > As of September 2017, the latest commercial high-end SPARC processors are Fujitsu's SPARC64 XII (introduced in 2017 for its SPARC M12 server) and Oracle's SPARC M8 introduced in September 2017 for its high-end servers. > > On Friday, September 1, 2017, after a round of layoffs that started in Oracle Labs in November 2016, Oracle terminated SPARC design after the completion of the M8. Much of the processor core development group in Austin, Texas, was dismissed, as were the teams in Santa Clara, California, and Burlington, Massachusetts. SPARC development continues with Fujitsu returning to the role of leading provider of SPARC servers, with a new CPU due in the 2020 time frame. I don't think SPARC machines have been competitive in terms of (price / performance) or even just raw (performance / development time) in a long, long, long time. I imagine most of the market for SPARC machines are legacy customers who are continuing to build and maintain older codebases that have been running for a long time. --- POWER9 machines are pretty neat, but IIRC they compete somewhat with contemporary Xeons, which is to say that the difficulty / cost of obtaining said POWER9 system and developing optimized software for it is going to be a good bit higher, because IBM hasn't opened up that ecosystem enough and still prices those machines at remarkably high prices (so there's not a meaningful incentive for anyone to try bridging over to it as a new platform, with the exception of hyperscalers like Google who use it as a constant threat to negotiate prices with the like of Intel etc).
- rbanffy 6y agoIn the case of POWER, the scenario where they are clear winners is the scale up one. This is a scenario you usually don't want to be in.
- unnouinceput 6y agoQuote: "...more business with the U.S. government is the best “disinfectant” to the FUD around its connection with China." This cracked me up so hard that I've woken my wife and kids (it's ~3AM for me).