Google will stop using Oracle financial software and switch to SAP

Larry Ellison, President of Oracle

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Google’s parent Alphabet plans in the coming weeks to stop using Oracle’s financial software and instead start using SAP software, CNBC has learned.

Alphabet and Google’s core financial systems will move to SAP in May, Google told employees in an email seen by CNBC. The move relates only to the software Google uses to track finances, and there is no indication that the company is moving other systems outside of Oracle.

The shift comes as Google and Oracle increasingly compete in the cloud computing market, and follows a similar move by cloud leader Amazon, which over the course of several years dramatically reduced its use of Oracle software in favor your own cloud services.

The change does not appear to be linked to the long-standing lawsuit between Google and Oracle regarding Google’s use of Java code in the application programming interface for Google’s Android operating system. On Monday, the Supreme Court ruled that Google’s copying of Java code was a legitimate use.

Oracle competes with Google in selling public cloud resources for organizations to host applications. For years, Oracle refused to certify its long-standing database software for the Google cloud, meaning that customers weren’t sure they could host Oracle databases in the Google cloud without conflicting with Oracle’s licensing policies.

“We do not partner with Google, because we are trying to compete with Google,” Ellison said in a 2018 meeting with analysts.

That lack of certification became a problem for Google’s cloud business as it sought to win business from large companies, many of which use Oracle database software. As a result, Google began to focus more on deploying SAP’s database software in the cloud, said a person familiar with Google’s cloud business, who asked not to be identified to discuss confidential business matters. Additionally, this year Google introduced a way to run the Oracle database on a bare-metal server that does not include virtualization technology.

“Google Cloud actively enables Oracle customers to run their Oracle database workloads on Google Cloud through our Bare Metal solution. But that is completely independent of our decision as an enterprise financial software customer to do the job. transition of our financial systems from Oracle to SAP, “said a Google spokesperson. he told CNBC in an email. An Oracle representative declined to comment.

Larry Ellison, Oracle Co-Founder, President and CTO, regularly shows how companies agree to use Oracle software and services. In March, Ellison spent a third of Oracle’s 45-minute earnings call talking about customer activity, saying Oracle would capture more than half of SAP’s customers.

It is unclear how much money Google has paid Oracle for financial software. Still, Ellison has bragged about his business with Google. During a 2019 meeting with analysts, he said that when Google catalogs large amounts of information, that data “actually resides in Oracle databases.” That may still be the case, as this move only relates to Oracle financial software.

The effort to migrate from Oracle’s financial software required months of work and extensive engineering resources, said another person familiar with the move.

Shares of Oracle fell slightly on the news, while shares of SAP rose, closing 4.8% higher.

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