Home » Business » If the Oracle deal goes through, TikTok could face a process that experts say is incredibly complex, costly, and uncommon for any business: Switching from one cloud to another
If the Oracle deal goes through, TikTok could face a process that experts say is incredibly complex, costly, and uncommon for any business: Switching from one cloud to another
President Donald Trump has approved a proposed deal between Oracle and Walmart and the video sharing app TikTok. Although the details are still unclear, TikTok would likely need to move its operations from Amazon Web Services and Google Cloud onto Oracle's cloud.
It won't be easy: Experts say that switching clouds completely is uncommon because of how complicated and costly it can be.
When switching clouds, a company faces a host of challenges like egress charges, possible service lapses, and the need to retrain its workers. Experts delve into the issues, as well as what the process could look like in action.
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President Donald Trump gave his blessing to a proposed deal between Oracle and Walmart for the US operations of popular video sharing app TikTok in September, and although details of the deal are unclear and it could still be blocked, it could have interesting IT implications if it does pass muster:
A TikTok deal could entail a massive — and highly complex — move to Oracle's cloud.
Right now, TikTok uses both Amazon Web Services and Google Cloud, according to reporting from the Information, with AWS as its main provider and a three-year, $800 million agreement signed with Google in 2019.
While it's still unclear how TikTok's cloud strategy will play out, it will likely have to move much of its data from AWS and Google Cloud to Oracle if the deal goes through.
Completely switching cloud platforms is rare, mainly because it's a complicated and costly process, according to experts.
"We don't see that very often at all," Forrester VP and principal analyst Dave Bartoletti told Business Insider. All of the "hyperscale" public cloud providers now have hundreds of interwoven services, offering customers all they could need, he said: "You'd have to make a very strong case for your application on why you'd want to jump ship."
In this situation, that "strong case" would come directly from the US government. Here's why expects say that TikTok's process of moving onto Oracle's cloud would be difficult and expensive — and what it could look like in action:
The many costs and challenges associated with switching clouds
There are multiple reasons why switching cloud platforms can be expensive and difficult.
"One of the challenges that companies run into when they move from cloud to cloud is you're moving from one competitor to another, so you're going to get a certain amount of pushback," IT sourcing expert at consultancy UpperEdge, Greg Hall, told Business Insider.
When a company chooses a cloud platform it usually signs multi-year agreements that include "egress charges," meaning, the fees that the customer has to pay if it decides to break contract early. That being said, because the US government is pushing TikTok to move to Oracle, it's unclear whether the government would take steps to waive those charges, Forrester's Bartoletti said.
Beyond being bound contractually, a customer may be technologically bound, too. When a company uses cloud services they're often trying to strike a balance between portability and optimal use: Taking advantage of interlocking cloud services can help a customer's application run more efficiently and cut down on costs, but, on the flip side, create a sense of getting "locked in."
"The lock-in challenges are, the more you use any cloud the way it was designed and to get the full benefit out of it at the lowest cost, the more you're locked in," Craig Lowery, vice president analyst at Gartner, told Business Insider. "It's unavoidable."