Shaking hands with TikTok, Oracle like a tiger growing wings

Even if it does not fully grasp the TikTok business in the US, Oracle is also seen as an extra step if it becomes a cloud service provider for Chinese video application.

TikTok deal success or failure is still in US President Donald Trump.  Photo: AFP
The successful or unsuccessful TikTok deal is still in the hands of US President Donald Trump. Photo: AFP

Relationship advantage with the US government

The name Oracle is only mentioned by the world when it participates in the TikTok deal, although before that, the group won big in April when it became a cloud service provider for online meeting application Zoom.

The US Treasury Department has said that the agency will consider an agreement between Oracle Corporation and other US businesses and Internet technology company ByteDance (China) to rearrange TikTok operations in the US. .

Oracle on September 14 revealed that the rearrangement of operations in the US was part of a proposal submitted to the US government by ByteDance, which owns the TikTok application, to ensure Oracle plays a “worthy technology partner. trust ”by ByteDance.

The TikTok side believes that the proposal they submit to the US Treasury Department will help resolve the Washington administration’s security concerns about the application. However, TikTok still did not disclose the details in the proposal.

In terms of capacity, the fact that Oracle knocked Microsoft out of the list of potential US partners in the TikTok deal is quite a surprise, but based on the good relationship between Oracle and the American world, it will step into the deal. TikTok is understandable again. US President Donald Trump last time urged the TikTok deal. The head of the White House on August 6 signed an executive order for TikTok to close the sale of its US business to its US counterparts before September 15 or face the threat of a closure in the US.

Oracle is considered to be a technology company that has a good relationship with the US government, which is evidenced by its good cooperation with the US government for decades, including the national security agency. In a statement on September 14, Oracle claims it has a 40-year history of providing superior and secure technology solutions.

In early 2020, Oracle President Larry Ellison organized a fundraiser for US President Donald Trump in his home country, while CEO Safra Catz was directly involved in Trump’s movement team during the war campaign. election year 2016. By the 2020 election season, CEO Safra Catz also sponsors the re-election campaign of Mr. Trump.

In mid-August 2020, President Trump voiced his support for Oracle to join the TikTok deal. “I think Oracle is a great company and I think the owner of this business is a generous man. Oracle is an enterprise that can undertake the deal, ”Mr. Trump commented when asked about Oracle’s participation in the TikTok deal.

A lucrative deal for Oracle

US Treasury Secretary Steven Mnuchin on September 14 confirmed the agency had received Oracle’s proposal for TikTok operations in the US over the weekend. The Foreign Investment Committee of the Ministry of Finance is currently considering this proposal.

“We will petition the President (Mr. Donald Trump) and consider the proposal with him,” said Minister Mnuchin. However, the President of the United States has the right to reject the request of the Foreign Investment Commission to approve or cancel the agreement.

The attraction of the TikTok deal is TikTok’s commitment to using its partner’s cloud computing service, according to the Wall Street Journal’s source. TikTok is now a global brand, it is in line with the user data platform that Oracle President Larry Ellison wants to develop to elevate the company into a formidable force in the cloud computing field, one of the areas the tech industry’s most exciting piece.

Oracle mainly provides software to support business operations and also has a large gap compared to two “empires” in the field of cloud computing such as Amazon and Microsoft.

The US market is one of the lucrative pieces of TikTok as the number of monthly TikTok users in the US has skyrocketed from 11 million in 2018 to around 100 million, accounting for nearly a seventh of the total global TikTok users. .

Oracle is expected to cooperate with TikTok to transfer US user data to cloud computing infrastructure and information storage at Oracle. If so, the TikTok deal could give a boost to Silicon Valley technology firms to accelerate the development of a silent data business and even become the “big” in cloud computing.

Mr. Ray Wang, founder of Constellation Research Consulting in Silicon Valley, said that shaking hands with TikTok will turn Oracle like a “tiger growing wings”, because TikTok’s nature is biased towards video and this is the customer in demand. is especially high because the video needs huge and stable clouds.

“Oracle is proving that this company is capable of storing large amounts of data in the public cloud and that is its direction in the future,” Wang added.

If the proposal of Oracle and ByteDance is approved by the US government, the TikTok deal will mark the second deal that Oracle has reached with its partners when competing with “heavyweight” competitors in the middle of Covid-19. Prior to that, Oracle became a cloud service provider for the Zoom online meeting application in April when it needed a large amount of storage to meet Covid’s soaring online learning and meeting demands- 19.

If the TikTok deal is successful, Oracle’s effort in its cloud service market share with Amazon and Microsoft will bear fruit. Prior to becoming a partner at TikTok, growth in cloud services helped Oracle’s second quarter profit exceed Wall Street analysts’ forecasts. It was Zoom’s business, Oracle explained, that brought the tech firm’s surprise growth, while its total revenue grew modestly.

Not long after Zoom, Oracle added the 8×8 video conferencing provider to the list of customers using the cloud service, and in the words of 8×8 Senior Vice President, Oracle’s partnership with the app brings. again effective, helping 8×8 significantly reduce costs.

TikTok algorithm is difficult to buy

Pursuing the TikTok deal, Oracle has cooperated with 3 other companies, including: General Atlantic, Sequoia Capital and Coatue Management. They are all major shareholders and have certain positions on ByteDance’s Board of Directors.

The TikTok deal so far has not shown any risks. In addition to having to go through a US national security censorship, the TikTok deal is likely to be scrutinized by Beijing.

Both Washington and Beijing have made moves that have disrupted TikTok deals in recent weeks. Most recently, China has issued new regulations on the list of technology goods subject to export restrictions, including artificial intelligence algorithms such as TikTok is using.

Although the TikTok deal is inclined to the plan that Oracle will be a “reliable technology partner” for TikTok in the US, many US officials and congressmen are still concerned about allowing TikTok to continue operating in the US when the unit This has relations with China.

In a letter to the US Treasury Secretary on September 14, Senator Josh Hawley suggested that the Foreign Investment Committee reject Oracle’s proposal to cooperate with TikTok. Mr. Josh Hawley said that allowing cooperation with TikTok is completely unacceptable, contrary to the executive decree that President Trump issued on August 6. On the other hand, this senator supported TikTok’s plan to sell apps and software to an American business.

The Chinese government on September 14 once again opposed US pressure on TikTok. “They (the US) are abusing national power on the pretext of national security to suppress and coerce non-American companies that are at the forefront of a particular field,” said Wang Wenbin, a spokesman. Ministry of Foreign Affairs of China said. However, Mr. Wang Wenbin did not mention Beijing’s position on the agreement between TikTok and Oracle.

The Wall Street Journal’s TikTok deal revealed that the deal between Oracle and TikTok will not contain the content of acquiring the artificial intelligence algorithms that TikTok uses to personalize video proposals for users, because it is considered a secret “card”, so it is difficult to sell to the US.

Both the Chairman and CEO of Oracle are “tossing” this technology company into the increasingly competitive social networking market. Earlier this month, Instagram launched Reels, a video app similar to TikTok.

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