Uber goes multicloud, announcing big deals with Oracle and Google

Uber goes multicloud, announcing big deals with Oracle and Google

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Ride-sharing company Uber Technologies Inc. today unveiled its multicloud strategy, announcing a new seven-year strategic cloud partnership with Oracle Corp. that will see it move the bulk of its most critical workloads to Oracle Cloud Infrastructure.

At the same time, Uber revealed it’s expanding its partnership with its existing cloud partner, Google Cloud. It said it’s working with Google to “modernize its cloud infrastructure” and “reimagine the customer experience for Uber users, drivers, and merchants.”

According to Uber, the new cloud deals will allow it to focus its resources on its core strengths and strategic initiatives at a time when it continues to grow and enter new markets. By working with Oracle and Google, it believes it will be able to accelerate its path to profitability.

Given Uber’s brand recognition, the deals are a big win for both Oracle and Google, analysts said. However, Oracle is believed to have won the biggest slice of the pie, with its contract estimated to be worth more than a billion dollars.

“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,” said JP Morgan analyst Mark Murphy in a note to investors. “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’s understood that Uber will close down its own on-premises data centers and move the entirety of its information technology workloads to Oracle and Google Cloud.

“Uber is revolutionizing the way people, products, and services move across continents and through cities,” said Uber Chief Executive Dara Khosrowshahi (pictured). “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 said in an announcement that its partnership with Uber will extend to other areas of collaboration. For instance, Oracle will become a global Uber for Business client, meaning it has selected Uber as its preferred rideshare partner for employees to travel and eat globally. It also plans to work with Uber on additional retail and delivery services.

“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,” said Cowen Inc. analyst Derrick Wood.

The Uber contract is important for  Oracle and Google Cloud because both companies trail rivals in the cloud infrastructure space, like Amazon Web Services Inc. and Microsoft Corp., by some distance. The Information’s Martin Peers says in his analysis that it would probably have made better sense for Uber to choose AWS, at least from a technical standpoint. That’s because AWS already knows the business, having served Uber’s rival Lyft Inc. for a number of years already. However, Uber’s decision was likely motivated by cost, and it’s believed that Oracle and Google Cloud were both able to undercut AWS on price.

Although Google Cloud has reportedly gotten the smaller end of the deal, it insisted that it will play a key role in Uber’s plan to modernize its customer experience. This includes “technical investments” across Google Cloud, Google Ads and Google Maps that will aid Uber in its efforts to reduce its cost per trip, accelerate new revenue channels and improve in-house analytics. It will also help Uber to improve the performance of its mobile application, it said.

“Our partnership with Google centers around a shared commitment to putting customer experience at the forefront of everything we do,” Khosrowshahi said.

Photo: Fortune Brainstorm Tech/Flickr

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