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Google Dropping Oracle Finance Software for SAP: Report
By: TheStreet | April 5, 2021

• Alphabet and Google's core financial systems will reportedly move to SAP in May.

Google parent Alphabet (GOOGL) reportedly will stop using Oracle financial software and switch to software from SAP.

Alphabet and Google's core financial systems will move to SAP in May, CNBC reported in an article published on Monday afternoon before the market closed.

The move only relates to the software Google uses to track finances, and there’s no indication that the company is moving other systems off Oracle, CNBC said, referring to an email to Google employees that it viewed.

Oracle competes with Google in selling organizations public cloud resources for hosting applications.

SAP shares rose 4.81% to $131.80 in trading on Monday, while Oracle shares were up 3.27% to $74.16 and Alphabet rose 4.19% to $2,218.96. All three companies were trading flat in after-hours trading.

Oracle has refused to certify its longstanding database software for Google’s cloud, so that customers weren’t sure if they could host Oracle databases on Google’s cloud without running afoul of Oracle’s licensing policies.

The lack of certification became a problem for Google’s cloud business as it sought to win business from large companies, many of which use Oracle database software.

As a result, Google began to focus more on deploying SAP’s database software in the cloud, CNBC said, citing a person familiar with Google’s cloud business who asked not to be named discussing confidential business matters.

This year, Google introduced a way to run Oracle database on a bare-metal server that doesn’t include virtualization technology.

The move to SAP does not appear to be tied to the longstanding lawsuit between Google and Oracle (ORCL) regarding Google’s use of Java code in the application programming interface for Google’s Android operating system.

Earlier on Monday, the Supreme Court ruled that Google’s copying of Java code was fair use.

The justices determined in a 6-2 vote that Google’s use of Oracle’s software code in creating the Android operating system didn’t violate federal copyright law.

Alphabet was recently upgraded to buy from hold at Stifel with a higher price target. Analyst Scott Devitt said that he was impressed with "the resilience and speedy recovery of Alphabet's digital advertising businesses through the course of the pandemic."

In February, Alphabet beat Wall Street's fourth-quarter earnings estimates.

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