What Oracle and TikTok stand to gain from a partnership
- Oracle won the bid for TikTok's US operations.
- If the deal is approved, both companies could benefit from the partnership.
- Insider Intelligence analyzes this industry and several others to provide in-depth analyst reports, proprietary forecasts, customizable charts, and more. Learn more about what we offer.
Oracle confirmed yesterday that it won the bid for TikTok's US operations, beating out rivals Microsoft and Walmart. The last-minute bid made it in just before the original deadline set for today—but the deal will still need to be approved by the US government.
If approved, Oracle will become TikTok's "trusted technology provider" in the US, in a deal that's less a sale and more a partnership, per The Wall Street Journal. Though the specifics are unclear, this likely means that TikTok's data will be processed through Oracle rather than sent to ByteDance's data centers in China, alleviating some of the national security concerns that caused President Trump to demand a ban back in August.
Both players stand to benefit from the partnership. Here's what each has to gain:
- Oracle stands to benefit in two main areas: First, TikTok will likely switch to Oracle's in-house cloud computing service for its servers and storage. Such a large app making the move to Oracle could boost the tech company's presence in the cloud computing space as it competes with giants like Amazon, Microsoft, and TikTok's current provider, Google. Second, Oracle offers several ad tech and marketing tech products on its Oracle Data Cloud platform, including tools for audience analysis and measuring the success of ad campaigns. But the platform has been at risk due to privacy rulings like the General Data Protection Regulation (GDPR), which caused Oracle to pause selling third-party targeting services in Europe last week. TikTok's wealth of first-party user data could solve this issue—which, by extension, would provide marketers using the platform with access to better data and insights.
- TikTok, in addition to avoiding a ban, could save on operational costs by switching to Oracle's in-house cloud services and improving its ad products using Oracle's tools. Plus, the partnership appears more favorable to TikTok than an outright sale to Microsoft would have been. TikTok can continue building out the front-facing end of its business itself while reaping the back-end benefits that Oracle provides. For marketers, without concrete detail on what it means for Oracle to be a "technology partner," things will remain status quo in the short term.
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