When the demand is high and increasing, tech companies must quickly find ways to scale up.
This is what Zoom is doing. As the video-conferencing software becomes the top video chat provider that sees huge surge of demands after many people are working from home due to the novel 'COVID-19' coronavirus, the company admitted that its infrastructure wasn't prepared the sudden surge.
For a long time, Zoom has long been a client of Amazon Web Services (AWS), while at the same time also handling a lot of capacity from its own data centers.
To help it scale, the company starts signing a cloud deal with Oracle.
The news came as a surprise, considering that both Google and Microsoft have showed signs of moving more aggressively into marketing their cloud offerings to Zoom.
Oracle on the other hand, has been touting its cloud infrastructure, but remains in the category of "somewhat niche players." This makes it rare to win big deal in the cloud market.
So it was kind of unexpected to see a press release from Oracle, saying that Zoom had chosen its cloud "for its advantages in performance, scalability, reliability and superior cloud security."
Oracle CEO Safra Catz said that:
And according to Zoom CEO Eric S. Yuan:
"We chose Oracle Cloud Infrastructure because of its industry-leading security, outstanding performance, and unmatched level of support.”
During the coronavirus pandemic, Zoom was met with rapidly increasing demand for its services, including a sudden spike to 300 million daily meeting participants.
By deploying its services through Oracle, Zoom wants to be better in dealing with its newfound ubiquity.
Within hours of deployment, Oracle Cloud Infrastructure started supporting hundreds of thousands of concurrent Zoom meeting participants. And shortly after achieving full production, Zoom is enabling millions of simultaneous meeting participants on Oracle's cloud, transferring upwards of seven petabytes through Oracle Cloud Infrastructure servers every single day.
Zoom's popularity is still unmatched. But others in the competition aren't staying quiet to see the junior Zoom enjoy all of the attention.
Google, which is third in public cloud infrastructure market share in the U.S., behind Amazon and Microsoft, said that it has improved Google Meet, and is giving away the video chat product for free. Zoom shares dropped 6.5% after the announcement.
Google has also improved Google Duo by giving it some new features.
Facebook also challenges Zoom by launching Messenger Rooms, which is free to use, and allows up to 50 people join a single room and interact with each other, with no time limit.
Microsoft that started seeing Zoom as an "emerging threat", improved Teams by copying Zoom's popular feature, and by introducing some new ones.
Even the straightforward chat app WhatsApp has increased the limit for group calls from 4 to 8.
While Zoom is singularly focused on video, Google, Facebook and Microsoft are massive tech companies sitting on a much larger resources and with the to lose money in certain areas.
But because all of them don't see video as a priority of their business, Zoom would rather not fund its rivals' cloud businesses (Google, Microsoft). This is one of the reasons why Zoom chooses Oracle.
According to a webinar, Zoom CEO Eric Yuan said that Oracle, which has been "a great customer," wanted to offer additional support on top of what Zoom was getting from AWS. After testing Oracle's service and "it worked so well," Zoom added the Oracle's servers to its arsenal.