Oracle stock is rocketing higher Tuesday, helped by a strong earnings report and its plan to partner up with Amazon web Services. Analysts say both Amazon and Oracle can benefit by working together.
Oracle announced late Monday a deal to offer Oracle's database services on infrastructure from Amazon Web Services. Oracle has been working to catch up with Amazon's lead in the cloud. The rivalry has at several points turned heated. But the companies have a mutual goal in bringing more data into the cloud.
"Oracle and Amazon had been competitive for database customers, so new partnership suggests companies have a lot to gain by working together," BofA Securities analyst Justin Post wrote to clients early Tuesday. "We think all cloud providers have a sizable opportunity to unlock demand for infrastructure/applications using data housed within Oracle's databases."
The product, called Oracle Database@AWS, is expected to launch next year. Oracle Chairman Larry Ellison will discuss the partnership later Tuesday at Oracle's CloudWorld event in Las Vegas. AWS Chief Executive Matt Garman will join him.
Oracle Partners Up Amazon, Microsoft, Google
The partnership with Amazon is part of a broader push from Oracle to allow customers to connect their data across cloud providers. Ellison said in a news release that there is "huge demand" from customers for so-called multicloud services.
"To meet this demand and give customers the choice and flexibility they want, Amazon and Oracle are seamlessly connecting AWS services with the very latest Oracle Database technology, including the Oracle Autonomous Database," Ellison said.
Oracle already has similar deals with Microsoft and Google Cloud parent Alphabet.
Amazon, Microsoft and Google are the three largest cloud providers by market share, according to Synergy Research Group. Oracle ranks fifth, behind Alibaba.
"By making the Oracle database available in the different (cloud service provider) data centers, Oracle reduces the need for complex cloud data migrations, enabling customers to focus on building new applications and running analysis," William Blair analyst Sebastien Naji wrote Tuesday.
Oracle Stock: AWS Deal Provides Easier Data Access
For the Amazon tie-up, both sides had to overlook some historical grudges. The battle for Oracle's cloud infrastructure business to catch up to Amazon's big lead often included public trash-talking in 2018 between Ellison and Amazon Chief Executive Andy Jassy, who led AWS before taking the top job at Amazon.
But current AWS leader Garman said in a news release that "many of the world's largest and most security sensitive organizations" already deploy Oracle software on AWS.
The new offering, which the companies expect to launch next year, will offer a "low-latency bridge" between two cloud platforms.
As described by BofA's Post, "AWS customers would benefit from more seamless access to their data, simplified database administration, billing (customers will be able to purchase Oracle services on the AWS Marketplace with existing commitments), and unified customer support."
Oracle Stock Outpacing Amazon Stock In 2024
On the stock market today, Oracle is up more than 11% at 155.93. Amazon, meanwhile, is up more than 2% at 179.65.
With Oracle's jump Tuesday, the stock has gained more than 50% this year. Oracle stock broke out of a flat base with a 146.59 buy point, according to MarketSurge pattern recognition.
Amazon stock, meanwhile, has gained about 18% this year. Shares are still working to recover from a sell-off that followed Amazon's Q2 earning report in early August. The stock is in a consolidation pattern with a buy point of 201.20 but have yet to retake their 50-day moving average.
