In the Trump era, Oracle holds tech sway
Oracle, the business software giant, has maintained exceptional sway with the Trump administration that has helped it win policy battles and thwart its larger competitors.
Why it matters: The techlash that's causing headaches for Google, Facebook and Amazon has yet to hit Oracle. Instead, the company is helping stoke some aspects of the tech critique in D.C. itself — highlighting the distinction between its own fee-for-service model and free, ad-based businesses.
What they're saying: “We have been working hard to point out that there is no techlash. There is a substantial backlash against the business model where purportedly ‘free services’ are offered in exchange for massive and unconstrained collection of consumer data untethered to the underlying service, " said Ken Glueck, Oracle's executive vice president and top Washington lobbyist. "Winter is here for that business model.”
Driving the news: Over the last two years, Oracle has turned is sights on Amazon, a competitor in the cloud-computing business.
- Amazon recently lost the fight for a major Defense Department cloud contract worth up to $10 billion after the White House instructed the department to re-examine awarding the contract, according to The Washington Post.
- While Oracle didn’t win the contract, either — the Defense Department chose Microsoft — Oracle has a better relationship with Microsoft and prefers this outcome to an Amazon win.
- Oracle CEO Safra Catz reportedly discussed the contract issue with Trump during a dinner at the White House in April 2018.
- Glueck created a flow chart detailing the connections between Amazon executives and former Defense Secretary Jim Mattis, per the Post.
- Oracle was also among the funders of the Free and Fair Markets Initiative, an anti-Amazon group, according to a Wall Street Journal report.
The backstory: Catz developed ties with the Trump administration early on.
- Catz and other technology executives met with President Trump at Trump Tower in New York in Dec. 2016 before the inauguration, and Catz joined the transition team.
- Her name was floated for administration positions, including national security adviser.
- “Safra Catz in particular would have very good access, and different from the rest of the tech industry,” said a former administration official. “She was for Trump before a lot of other people, and a lot of the tech industry is still not for Trump. She gets meetings, she gets access.”
The big picture: Oracle grew rich and strong as a corporate database provider in the '90s and expanded into an array of business software markets from retail to HR via acquisition.
- It has held onto a big chunk of the business software market amid a shift from onsite servers to the cloud.
- Its market cap remains significantly smaller than that of Big Tech giants such as Apple, Microsoft, Amazon and Google.
- It has staked out positions on net neutrality and online platforms' legal immunity for user-posted content that set it apart from competitors.
Details: Oracle has successfully supported law and policy changes that may not directly benefit the company, but could cause problems for its rivals.
- The company weighed in with the FCC to support the repeal of Obama-era net neutrality rules that were favored by Google and other tech companies. Catz met with FCC Chairman Ajit Pai ahead of the commission’s Dec. 2017 vote to back the repeal.
- Oracle publicly supported a legislative carve-out to the law that protects online platforms from liability over user-generated content. The Internet Association, whose members include Google and Facebook, fought the change before reaching a compromise with lawmakers.
- Glueck said the liability shield, Section 230 of the Communications Decency Act, would never be signed into law today if proposed again. "There is no longer any justification for Section 230 in an era of artificial intelligence, machine learning, and advanced analytics," he said, adding, "If there are concerns for small businesses and small innovators, then 230 should be modified to protect those kinds of contributors."
What's next: Google is facing antitrust probes from the Justice Department, a bevy of state attorneys general and Congress. That has opened up a new front for Oracle.
- Oracle confirmed it received information requests relating to Google from states and congressional investigators, per Reuters, as well as regulators in Australia.
- Oracle and Google have also fought a decade-long copyright battle over code in the Android operating system that could end up at the Supreme Court.
- Google declined comment for this story.