Highlights:
- Uber believes that the new cloud deal will help it channelize the resources toward strategic initiatives and core strengths while the company continues to expand and explore new markets.
- Uber deal is significant for both Google Cloud and Oracle as they compete against their cloud infrastructure market rivals, Microsoft Corp. and Amazon Web Services.
Uber Technologies Inc., a ride-hailing company, announced its multicloud strategy, the latest seven-year strategic cloud collaboration with Oracle Corp. With this development, Uber will shift a major chunk of its crucial workloads to Oracle Cloud Infrastructure.
Meanwhile, the company also disclosed expanding its partnership with Google Cloud, its existing partner. Uber mentioned it has been working with Google to “reimagine the customer experience for Uber users, drivers and merchants and modernize its cloud infrastructure.”
Uber believes that the new cloud deals will help it channelize the resources toward strategic initiatives and core strengths while the company continues to expand and explore new markets. As per the company, the way to its profitability will be catalyzed by working in conjunction with Google and Oracle.
Analysts stated that the deals are victorious for both Google and Oracle, perceiving Uber’s brand recognition. However, Oracle received considerably larger share in the contract worth over a billion dollars.
JP Morgan’s analyst Mark Murphy reported to investors, “Our sense is that Oracle’s portion of the contract likely includes a broader footprint than just Uber Freight, and Oracle may be handling 60-80% of the direct infrastructure/economics in this arrangement. We believe this is one of the 10-figure wins that Oracle had already booked and announced during its recent October quarter, and we are just learning of the logo today.”
It is evident that Uber will shut its own on-premises data centers and shift entire IT workloads to Google Cloud and Oracle.
Uber’s Chief Executive Dara Khosrowshahi said, “Uber is revolutionizing the way people, products, and services move across continents and through cities. To deliver on that promise for customers while building value for shareholders, we needed a cloud provider that will help us maximize innovation while reducing our overall infrastructure costs. Oracle provides an ideal combination of price, performance, flexibility, and security to help us deliver incredible customer service, build new products and increase profitability.”
Oracle announced that collaborating with Uber will also penetrate to other areas of collaboration. It has chosen Uber as the ride-hailing partner for employees to eat and travel globally. Oracle is also planning to continue with Uber for miscellaneous delivery and retail services.
Derrick Wood, analyst Cowen Inc., said, “This is a net new win for Oracle OCI and a notable competitive win over AWS, reinforcing the growing momentum and market share gains it has been driving over the last several quarters and giving us confidence that this momentum should continue.”
Uber deal is significant for both Google Cloud and Oracle as they compete against their cloud infrastructure market rivals, Microsoft Corp. and Amazon Web Services.
Martin Peers from a renowned media company, analyzed that AWS could have been a better choice for Uber, from a technical point of view. This is because AWS knows the business better as it has already served Lyft Inc., Uber’s rival for years. However, Uber’s decision is a function of pricing structure, as Google Cloud and Oracle are estimated to provide service at a cost lower than AWS’ offerings.
Despite receiving a smaller share of the deal, Google Cloud is keen on playing a major role in modernizing Uber’s customer experience. This can be accomplished by “technical investments” in Google Ads, Maps, and Cloud to help Uber reduce the price per trip, explore new revenue channels, and enhance in-house analytics. Besides, it assured to assist Uber in augmenting the mobile application performance.
Khosrowshahi said, “Our partnership with Google centers around a shared commitment to putting customer experience at the forefront of everything we do.”