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Oracle makes major gains in video conferencing services

by Mike Jones in Other Cat 26/05/2020

Oracle Cloud Infrastructure is making significant steps into the video conferencing business, securing two major deals with video conferencing providers requiring the further capacity to support the rise of new users over the past few months. Recent wins with Zoom and 8×8 Inc. were believed to be due to competitive pricing for its services at scale, particularly in comparison with their cloud rival Amazon Web Services. 

Oracle has been focusing on expanding its cloud infrastructure, operating data centres in 21 locations and with a target of reaching 36 by the end of the year. Andrew Reichman, the director of product management for Oracle Cloud emphasises the growth of the business over the last few years. Reichman highlights that they focused on plans that can meet worldwide enterprise requirements, automating steps of regional development. 

The rise of Zoom has quickly become the most notable platform during the pandemic. At the end of 2019, daily meeting participants reached a maximum level of 10 million. In March, these numbers were more in the region of 200 million. Eric Yuan, the CEO of Zoom explains that they have experienced the biggest growth the business has ever seen and has resulted in a significant increase in a service capacity.

Yuan states they have researched a number of platforms and Oracle Cloud Infrastructure proved essential in quickly scaling their capacity and meeting the needs of their users. Video technology has become a necessity for our professional and personal lives, and Zoom has clearly led this industry transformation. Safra Catz, the CEO of Oracle explains that they are proud to be working with Zoom as their cloud infrastructure provider and as a customer. Following on from the Zoom announcement, Oracle announced that its integrated cloud communications system 8×8 is now using Oracle Cloud to support its secure video meeting services as it intends to prepare for a significant rise in users. 8×8 has already witnessed a big rise in usage with video meetings increasing and monthly active users reaching over 20 million worldwide. 8×8 transferred its video services from AWS to Oracle to enable performance improvements and considerable savings in network costs. Clay Magouyrk, the executive VP of Oracle Cloud Infrastructure explains that video conferencing has quickly become one of their fastest-growing services and critical service for its customers. So why has Oracle proven more popular than the AWS service? Research suggests that it really comes down to pricing.

The question for Zoom and other services comes down to who is capable of running their applications and providing reliable infrastructure in an affordable and efficient manner? Industry analysts suggest that retail pricing for data transfer is nearly ten times higher than Oracle’s. While Zoom won’t be paying the going retail rate for AWS services, the discounted price is likely to be higher than Oracle’s rates. The high price for data transfer was likely a key factor in Zoom’s decision to shift services towards Oracle Cloud.