After more than a decade of competition, Amazon Web Services (AMZN) is changing course against Oracle (ORCL).
AWS on Wednesday announced a partnership with Oracle that will give customers access to Oracle Autonomous Database and Oracle Exadata Database Service within AWS, making it easier for customers to integrate data and manage databases.
The partnership is a marriage of former enemies. Oracle Database@AWS marks a pivotal moment in the long-standing competitive relationship between the two companies.
“Hell hash frozen over,” Patrick Moorhead, CEO and chief analyst at Moor Insights & Strategy, told Yahoo Finance of the partnership. “These two companies have essentially been at war since AWS was founded 15 years ago, and AWS’s thesis going into this was that they were going to take out Oracle … and use their database. … What’s clear today … is that Oracle database is alive and well.”
Oracle shares rose 12% on Thursday morning on the news, while Amazon shares rose 2%.
AWS CEO Matt Garman spoke to Yahoo Finance about the partnership on Wednesday at the Goldman Sachs 2024 Communicopia and Technology Conference. According to Garman, who is three months into his CEO role at AWS, “We always wanted to have a broad offering for customers, … [and] “Customers love working with Oracle databases.”
“We were thinking about how integrating AI services into Oracle databases would work,” Garman said (video above). “It took a while to get there, but I think it’s a partnership that’s going to be hugely beneficial to customers, and that’s something that’s good for AWS. It’s good for Oracle.”
The partnership is certainly a shift. On Thursday, AWS and Oracle still had blog posts on their websites highlighting challenges and complaints about each other’s services. For example, AWS pointed to complaints about Oracle’s “non-standardized systems” and “staggering” price increases, while Oracle argued that AWS has complex pricing models and less flexible offerings.
Moorhead noted that the deal is mostly positive for Oracle stock.
“Cloud is not a winner-take-all game and this is a perfect example that it takes a village,” Moorhead said. “The most sophisticated investors now see the sustainability of Oracle database in the cloud. … This event will bring in more bulls.”
The partnership also reflects a broader strategy for AWS amid an AI boom that has tech giants racing to be first and have the best big language model. Garman says he’s not worried about that.
“There’s not going to be one model that’s going to rule them all,” Garman said. “We’re looking to collaborate, not necessarily compete.”
This strategy has put AWS on track to reach $105 billion in annual revenue, and the stock has outperformed the Nasdaq so far.
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