Oracle and Tencent – New Partners in the Chinese Cloud Market

US-based Oracle Corporation, and China-Based Tencent Holdings Ltd., have come together to tap into a growing Chinese cloud market. This partnership, announced last Wednesday, aims to make the most of Chinese government’s policy to promote the rapid development of cloud market. Earlier this year, the Chinese government announced that it will be earmark certain technological areas including cloud, in an effort to move the Chinese economy up the value chain from a mere manufacturing hub.

To tap into this initiative, Oracle and Tencent have partnered to sell cloud-based solutions to different companies within the country. Under the terms of the partnership, Tencent will be the local partner whose responsibility is to sell Oracle’s cloud computing products in China. Also, this partnership aims to integrate the benefits of Oracle’s cloud functions with Tencent’s WeChat social media platform, to provide a better and more streamlined experience for its users. Currently, WeChat has about 700 million active users, and is termed as one of the fastest growing social media platforms in China. This integration with Oracle is sure to bring on more users within its fold, thereby increasing its reach and customer base.

This is a new beginning for both the companies. For Oracle, this signifies a foray into the lucrative Chinese market, that is already dominated by some big names such as IBM, Amazon, and Microsoft. For the Shenzhen-based Tencent, this partnership opens up new possibilities to expand its business, especially in the areas of retail, and banking. Currently, Tencent plans to sell computing products based on Oracle’s technology to financial companies, manufacturers, and retailers. Depending on the success of these offering, it plans to expand to other sectors too in the near future.

This partnership with Oracle is a natural extension for Tencent for a host of reasons. Firstly, this company understands the importance of getting into the cloud business, but this is not really its domain. It needed a reliable partner with a strong foothold in the cloud market, and Oracle fitted this need well. Secondly, Tencent’s biggest source of revenue is its online games. Though it already uses a limited amount of cloud computing to power these online games, a solid partnership can help to boost revenue from this avenue. Thirdly, it wants to expand its business line, so it has a more diversified portfolio that can withstand any negative impact in the future. Due to these reasons, Tencent stands to gain enormously from this partnership with Oracle.

Besides the two companies, the Chinese market as well as millions of tech-savvy Chinese users will also benefit from this partnership, as it will give them more choices in an already competitive market. Besides, having more companies in the same segment is sure to encourage  innovation. Also, this partnership is expected to boost the digital lifestyle of young Chinese, and can even pave the way for a more interconnected life.

In all, this partnership between Tencent and Oracle augurs well for everyone, even if it’s a little late.

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