Technologies Inc. plans to move its information-technology from its own data centers to
cloud-computing platforms, the companies said Monday.
The San Francisco-based ride-hailing company struck two seven-year deals, one with Google Cloud and the other with Oracle, to move off its data centers completely within a few years, said
Uber’s senior director of technology strategy. Over 95% of Uber’s IT is currently housed in those data centers, he said.
The companies declined to comment on the value of the deals. Uber declined to comment on how it plans to spread its data and applications between Google and Oracle’s cloud platforms.
Uber, since its 2009 founding, has primarily relied on its own server hardware rather than the cloud, an anomaly among its peers in the technology sector, said
a senior vice president and analyst at International Data Corp.
A tipping point came during the Covid-19 pandemic, when supply-chain disruptions pushed IT hardware delivery timelines to more than 12 months, according to Mr. Zargahi. Using a cloud provider lessens the company’s reliance on the hardware supply chain, he said, and allows Uber to make use of the cybersecurity defenses and compliance with certain data-handling standards that cloud providers offer.
And, like some companies that are re-evaluating their workforces to focus on skills like artificial intelligence and away from legacy technologies, Uber wanted to shift its engineers from managing data centers to “areas that make differentiation for our product” and to supporting its cloud move, Mr. Zargahi said.
In a broader shift spanning industries, large companies have continued moving to the cloud despite greater constraints on IT budgets.
Uber began an 11-month search for cloud partners last year, seeking out multiple cloud vendors to help mitigate the risks of relying on a single provider, and to take advantage of “areas of super expertise,” Mr. Zargahi said.
While Uber and Google have an existing partnership, the new cloud deal brings them closer together in other areas including launching new services, said Google Cloud Chief Executive
For instance, Uber will tap Google’s mapping service for routing its vehicles, and Google’s advertising product for its nascent ads business, Mr. Kurian said.
“Once they move these applications and data to the cloud, they can take our platform capability with our data analytics BigQuery, machine learning, to create both better insights and new service experiences for customers,” Mr. Kurian said.
With Oracle, Uber is planning to integrate its freight business into Oracle’s cloud-based enterprise resource planning system, as well as other database-related projects, said Oracle Cloud Executive Vice President
“It’s much more than just, ‘Here’s some infrastructure,’” Mr. Magouyrk said. “It’s a lot about partnering together to push multi-cloud forward.”
Mostly known as an enterprise database and software provider, the addition of a customer like Uber boosts Oracle’s profile as a cloud vendor, said
a vice president and analyst at market-research and consulting firm
Google Cloud holds 7.1% of cloud market share, less than front-runners Amazon.com Inc. and Microsoft Corp., which hold 38.9% and 21.1% respectively. Oracle trails far behind all three, according to Gartner’s most recent estimates.
While companies across sectors have recently begun pulling back on IT investments amid economic uncertainty, moving to the cloud can still represent an opportunity to cut back on costs, especially compared with running data centers, Mr. Nag said.
Uber spent $221 million on office and data center rent expenses in 2018, according to paperwork filed for its 2019 initial public offering. Mr. Zargahi said Uber eventually expects the cloud to cost less than its data centers, and will not renew certain data center leases as it moves to the cloud.
The company last week reported $8.6 billion in revenue for the three months through December, a 49% increase from the same period a year earlier, but it isn’t immune to changes in consumer spending due to inflation and recession fears.
“At the end of the day, everyone’s looking to cut internal costs so they can maximize their profits,” Mr. Nag said. “I think this was an inevitable outcome for a company like Uber. They eventually had to do this.”
Write to Belle Lin at [email protected]
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