Oracle and Samsung Electronics have reportedly forged a new partnership through which they will work together to deliver mobile cloud services.
In a meeting last Thursday, Oracle co-CEO Mark Hurd and Shin Jong-kyun, head of Samsung Electronics' mobile division, met in Seoul to discuss the details of the union, which will aim to help Oracle boost its database cloud solutions while enriching Samsung's enterprise client opportunities, according to a Monday report in The Korea Times.
Samsung has already partnered with Microsoft and SAP. Recently, it has denied reports suggesting that it offered to buy BlackBerry Ltd., even as it has admitted that it would like to deepen its relationship with the Canadian handset maker.
Oracle declined to comment for this story. Samsung did not respond to requests for comment.
In its fiscal 2015 second-quarter earnings report in December, Oracle announced that software and cloud revenues in general were up 5 percent to $7.3 billion, while cloud software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) revenue was up 45 percent to $516 million.
A relationship between Oracle and Samsung could have strategic similarities to IBM's recently created partnership with Apple, said Charles King, principal analyst with Pund-IT.
"That could be especially important for Oracle if the rumors about Samsung pursuing Blackberry prove to be correct," King said. "Though Blackberry is a shadow of what it once was, the company still has a presence in large private and public-sector organizations where Oracle and Samsung would love to do mobile business."
Given the rapid encroachment of mobile devices on enterprise terrain in general, the consumerization of technology is another key underlying motivator, noted Ray Wang, founder and principal analyst with Constellation Research.
"Lots of organizations are still figuring out how to manage all these devices," Wang noted.
Through a partnership with Samsung, Oracle would gain broader distribution of its software along with opportunities to get into the consumer market. Samsung's device channel, meanwhile, offers price points much more accessible to emerging markets, Wang said.
For Samsung, margins are much higher on the enterprise side than they are when providing devices to consumers.
Looking ahead, it remains to be seen to what extent Oracle can convince its existing customers to adopt cloud-based mobile services.
"While Oracle's traditional software is deeply embedded in many businesses, its cloud efforts and strategies are less clear, and the company is perceived to be a late-comer compared with more aggressive players," King said. "Overall, while an Oracle/Samsung partnership is certainly intriguing, there are far more questions than answers at this time."
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