Amazon may be planning to move from Oracle by 2020

3 min read

Amazon is reportedly working towards shifting its business away from Oracle’s database software by 2020 as per the CNBC report last week.

In fact, according to the CNBC report, Amazon has already started to transfer most of its infrastructure internally to Amazon Web services and will shift entirely by the first quarter of 2020.

Both the organizations, Amazon and Oracle, have been fierce competitors for a really long time, comparing whose products and services are more superior. But, Amazon has also been Oracle’s major customer. It has been leveraging Oracle’s database software for many years to power its infrastructure for retail and cloud businesses.

Oracle’s database has been a market standard for many since the 1990s. It is one of the most important products for many organizations across the globe as it provides these businesses with databases to run their operations on. Despite having started off its business with Oracle, Amazon launched AWS back in 2006, taking Oracle SQL based database head on and stealing away many of Oracle’s customers.

This is not the first time news about Amazon making its shift from Oracle has stirred up. Amazon’s plans to move away from Oracle Technology came to light back in January this year.

But, as per the statement issued to CNBC on August 1, a spokesperson for Oracle mentioned that Amazon had “spent hundreds of millions of dollars on Oracle technology” in the past many years.

In fact, Larry Ellison, CEO at Oracle, mentioned during Oracle’s second quarter fiscal 2018 earnings call that “A company you’ve heard of just gave us another $50 million this quarter to buy Oracle database and other Oracle technology. That company is Amazon.”

The recent news of Amazon’s migration has come at a time of substantial growth for AWS. AWS saw 49% growth rate in Q2 2018, while, Oracle’s business has remained stagnant for four years, thereby, putting more pressure on the company.

There’s also been an increase in Amazon’s “backlog revenue” ( i.e. the total value of the company’s future contract obligations) as it has reached $16 billion from $12.4 billion in May. In addition to this, AWS has been consistently appearing as “Leader” in the Gartner’s Magic Quadrant for Cloud Infrastructure as a Service (IAAS) since past six years.

There have also been regular word wars between Larry Ellison and Andy Jassy, CEO AWS, over each other’s performance during conference keynotes and analyst calls.

Andy Jassy, CEO at AWS took a shot at Oracle last year during his keynote at the AWS big tech conference. He said “Oracle overnight doubled the price of its software on AWS. Who does that to their customers? Someone who doesn’t care about the customer but views them as a means to their financial ends”.

Larry Ellison also slammed Amazon during Oracle OpenWorld conference last year saying, “Oracle’s services are just plain better than AWS” and how Amazon is “one of the biggest Oracle users on Planet Earth”.

With all the other cloud services such as AWS, Microsoft, Google, Alibaba and IBM catching up, Oracle seems to be losing the database race. So, if Amazon does decide to phase out Oracle, then Oracle will have to step up its game big time to gain back the cloud market share.