Oracle Bests Cloud Rivals To Win Blockbuster Zoom Deal

‘We explored multiple platforms, and Oracle Cloud Infrastructure was instrumental in helping us quickly scale our capacity and meet the needs of our new users,’ says Zoom CEO Eric Yuan.

Surging video communications star Zoom has selected Oracle as its cloud infrastructure provider for its core online meeting service as demand skyrockets. The deal comes after Oracle founder, executive chairman and CTO Larry Ellison endorsed Zoom, saying the company “has become an essential service” for Oracle.

“We recently experienced the most significant growth our business has ever seen, requiring massive increases in our service capacity,” said Zoom CEO Eric S. Yuan in a statement. “We chose Oracle Cloud Infrastructure because of its industry-leading security, outstanding performance, and unmatched level of support.”

A Zoom spokesperson said it is teaming with Oracle on its latest expansion to provide multicloud solutions to customers. The spokesperson said the company is maintaining its cloud relationships with AWS and Microsoft.

Oracle is currently in the midst of its largest data center expansion initiative in the company’s history.

“We explored multiple platforms, and Oracle Cloud Infrastructure was instrumental in helping us quickly scale our capacity and meet the needs of our new users,” said Yuan. Financial terms of the deal were not disclosed.

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Allen Falcon, founder and CEO of Cumulus Global, a 14-year-old Westborough, Mass.-based cloud solution provider, said the blockbuster deal positions Oracle as a secure back-end for Zoom, which has been criticized for its security shortcomings.

“This is going to be great for Zoom given the lingering concerns about Zoom meetings routing through servers in China,” said Falcon. “This is going to allow Zoom to relocate their services in properly secured facilities and locations that respect customer privacy. This is going to let them fix their security issues.”

The deal comes in the midst of a government report released by the Department of Homeland Security’s Cyber Mission and Counterintelligence Mission Centers that alleges Zoom’s videoconferencing platform could be vulnerable to intrusions by foreign governments including China, according to a report by ABC News.

Given the Zoom security issues, Falcon said he expects the deal includes professional services and expertise from Oracle, which has long maintained that its cloud service is more secure than rivals AWS, Google, and Microsoft.

“Oracle has been a niche provider that focuses on verticals that have high security requirements so this is a great fit for both them and Zoom,” said Falcon.

San Jose, Calif.-based Zoom has seen a spike in users to reach 300 million daily meeting participants as the coronavirus pandemic has forced companies to create at-home workforce's. Within hours of deployment, Oracle Cloud Infrastructure supported hundreds of thousands of concurrent Zoom meeting participating on Oracle Cloud Infrastructure. Zoom said Oracle Cloud Infrastructure will help the company scale to deliver service to its growing customer base, adapt to changing demand and lead the video communications industry.

In an interview with CRN last week, Laura Padilla, head of channel and partners for Zoom, said the surge in demand is creating an “even better” Zoom platform. “I look at this experience as making us an even better platform for partners to sell because the list of things that we have introduced have made us stand out even more from our competitors,” said Padilla.

Zoom said it is already transferring upwards of 7 petabytes through Oracle Cloud Infrastructure servers each day, which is roughly equivalent to 93 years of HD video. Redwood City, Calif-based software giant Oracle is building around 20 new data centers across the globe to accommodate demands for Oracle Cloud, with expectations to have a total of 36 cloud data center availability regions by the end of this year.

In March, Zoom launched its first-ever referral partner program. The new program, which teamed Zoom with several U.S.-based master agents, has seen staggering growth in its first two months with about 2,000 agent partners signing on to work with zoom through master agents.