- Vik Verma, CEO of 8×8, said the cloud communications startup chose to expand its video conferencing platform on Oracle’s cloud, after the tech giant offered a deal that was 80% lower than what it would pay with Amazon Web Services
- Verma said he was also struck by the tech giant’s accommodating approach, which stood in contrast to Oracle’s reputation as a hard-driving tech vendor.
- “This was not the traditional Oracle,” he told Business Insider. “It was very proactive the way they worked with us.”
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When 8×8 needed more capacity to meet a spike in traffic due to the shift to remote work, the cloud startup explored options with its current cloud providers, led by Amazon Web Services.
But CEO Vik Verma said they eventually opted to use a new vendor to expand: Oracle.
They had never tried Oracle’s cloud before, but the tech giant offered a deal that was priced 80% lower than Amazon’s, Verma said. Verma said he was also struck by the way his team was approached by the tech giant, which had been notorious for using hardball tactics in dealing with customers.
“This was not the traditional Oracle,” he told Business Insider. “It was very proactive the way they worked with us. It literally happened over a weekend.”
Oracle has been on a roll on the cloud front, signing back-to-back partnerships with major video conferencing platforms,including the trailblazing Zoom. These customer wins underscore the tech giant’s cloud offensive, often based on aggressive pricing and projecting a kinder, gentler image than what the industry may be used to from the company.
The deals also highlight how the COVID-19 crisis and the drastic pivot to remote work have created openings that Oracle is moving quickly to exploit.
How the deal came together
The crisis triggered the growth in popularity of video conferencing platforms, which led to greater need for cloud infrastructure capacity.
At 8×8, the demand surge was astronomical, from 150,000 monthly users in January to 21 million in the last few weeks, Verma said. That left Verma’s team scrambling for more capacity.
“I reached out to everybody, all of the big cloud providers, our existing vendors as well as Oracle,” Mehdi Salour, 8×8’s senior vice president for global networks, told Business Insider. “And we were surprised with the response that we got from Oracle, such a rapid and nimble response, jumping on the stuff that we’re requesting.”
And the price was pretty awesome too, he said: “We saved 80% actually on our network costs…compared to where we were when we were actually at with AWS.”
Verma said the sudden demand for capacity was tough on all the major cloud vendors. Amazon and Google could not immediately be reached for comment.
“Everybody was stretched,” he said. “Amazon was stretched. Google was stretched. They are all good partners and doing good things for us. But Oracle was very forward leaning.”
Analysts have said Oracle’s aggressive expansion of its data center capacity over the last few years has boosted its ability to respond to the demand surge during the crisis.
Clay Magouyrk, the Oracle executive vice president who was the point-man for the company’s new partnerships with Zoom and 8×8, said the tech giant’s ability to offer competitive prices in a downturn is going to be a key to its success.
“These are massive differences in expenses to large companies,” he told Business Insider. “When you’re in a 10-year bull market, people aren’t so worried about costs. But in a world where you have to look at the bottom line, for a lot of customers, they’re going to evaluating the costs of their cloud providers. They are going to be asking the question, ‘Hey, why is this so expensive?’ And we’ve done a whole lot of work to make sure that we can offer it at very very attractive prices.”
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