Oracle Cloud Infrastructure is competing aggressively for video conferencing business, winning two deals with video conferencing providers seeking additional capacity to support pandemic-driven user growth. Oracle’s customer wins with Zoom and 8×8 Inc. were reportedly driven by Oracle’s competitive pricing for data egress at scale, especially compared to cloud rival Amazon Web Services.
The wins could be good news for Oracle’s data center providers, as video content requires substantial storage and network resources. Oracle has been rapidly expanding its cloud infrastructure, which now runs in 21 data center locations, with a goal of reaching 36 regions by the end of 2020.
“Oracle Cloud has grown dramatically over the last several years,” said Andrew Reichman, director of product management for Oracle Cloud. “We’ve developed an approach that supports our plan to quickly meet enterprise requirements around the world. We’ve automated every step of the region building process, which lets us expand rapidly without sacrificing quality or consistency. In fact, each new region exists because of significant demand for Oracle Cloud from the leading enterprises in those countries.”
Zooming to Additional Capacity
Zoom has become the poster child for rapid growth during the COVID-19 pandemic. At the end of December, the maximum number of daily meeting participants using Zoom was 10 million. In March, Zoom reached more than 200 million daily meeting participants.
“We recently experienced the most significant growth our business has ever seen, requiring massive increases in our service capacity,” said Zoom CEO Eric Yuan. “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.”
Oracle said it was able to quickly help Zoom scale up to using seven petabytes through Oracle Cloud Infrastructure servers each day, roughly equivalent to 93 years of HD video.
Zoom houses its infrastructure in 17 data centers around the world, as well as on Amazon Web Services. The deployment at Oracle will help expand Zoom’s support of educational users. As schools shifted to online curriculum during the pandemic, Zoom decided to eliminate the 40-minute limit for K-12 schools.
Oracle said that its engineering team worked quickly to help Zoom add enough cloud capacity to serve the hundreds of thousands of students and teachers flocking to its service.
“Video communications has become an essential part of our professional and personal lives, and Zoom has led this industry’s innovation,” said Oracle CEO Safra Catz. “We are proud to work with Zoom, as both their cloud infrastructure provider and as a customer, while they grow and continue to connect businesses, people and governments around the world.”
8×8 Shifts Video from AWS to Oracle
Just days after the Zoom announcement, Oracle said that integrated cloud communications platform 8×8 is now using Oracle Cloud to power its secure Jitsi.org and 8×8 video meeting solutions as it scales to handle explosive growth in users. 8×8 has seen a significant increase in usage across its video meetings, exceeding 20 million monthly active users worldwide, as video conferencing has become the standard communication tool.
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8×8 moved its video meetings services from AWS to Oracle for substantial performance enhancements, and savings of more than 80 percent in network outbound costs.
“Video conferencing has become a critical service and one of our fastest-growing segments,” said Clay Magouyrk, executive vice president, development, Oracle Cloud Infrastructure. “Oracle’s Gen 2 Cloud Infrastructure provides the right platform for resource intensive applications like video conferencing and streaming content at a price that removes barriers for 8×8 to accelerate onboarding more end-users.”
A Competitive Opportunity in Data Transfer
What’s behind Oracle’s success in winning video-centric customers who previously used AWS? It comes down to pricing on data egress, according to Corey Quinn, Cloud Economist at The Duckbill Group, which specializes in cost optimization for cloud users.
In a blog post, Quinn outlined the potential cost differences between the two services on data transfer, a particular concern for video-intensive customers.
“This is real-time video we’re talking about here. The lion’s share of that spend has got to be data transfer, given the product’s purpose,” Quinn wrote. “The question for Zoom becomes rather straightforward: Who can run our application and provide reliable network infrastructure in a cost-effective way to help us run our business?
“My back-of-the-napkin calculations highlight the fact that AWS’s public, retail rates for data transfer pricing starts at 10x higher than Oracle’s,” he added. “So while Zoom certainly isn’t paying AWS’s retail rates, their discounted rate is still likely higher than Oracle’s public rate. The real story is AWS’s horrifically-priced data transfer, which I believe had serious influence in Zoom’s decision to start putting workloads in Oracle Cloud rather than doubling-down on AWS.”
Data Center Frontier is edited by Rich Miller, the data center industry’s most experienced journalist. For more than 20 years, Rich has profiled the key role played by data centers in the Internet revolution.
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