Oracle/TikTok Partnership: More Politics than Strategy
by Betsy Burton
This week, Oracle confirmed that it had reached an agreement with ByteDance to become the company’s “trusted technology provider” for TikTok.
This move happened as a result of the US administration’s stated plans to ban TikTok from operating in the US, citing data privacy and security reasons.
Originally, Microsoft seemed like the likely candidate to assume this partnership/provider role. However, this week’s announcement confirms ByteDance’s rejection of Microsoft in favor of Oracle.
Data Privacy and Security Strategy Is Key
Clearly, it is important that the US government take a leadership role with respect to protecting data privacy and the security of US government entities, business interests, and citizens. And there have been significant concerns regarding the collection, selling, and use of personal data (information, images, search data, etc.) of TikTok users, particularly given the application’s heavy use by young people.
It is important that the US government take a strategic position and takes action to protect information privacy and security. However, this should be taken as a strategic initiative that includes critical global partners, as well as adversaries, not just one administration’s tactical reaction to a single company in China.
It has also not been clarified if this partnership will include Oracle having some control over ByteDance’s algorithms, and how it will protect users’ data in the US. If ByteDance continues to operate and control the TikTok algorithms, then this partnership will do little to protect users.
Oracle Is an Unlikely Partner
Oracle does have a need to increase its market position with respect to cloud-based offerings and services. However, Oracle is all about enterprise-class applications, data, services, and partnerships, while TikTok is all about consumer-based services, advertising, and information. Strategically, this partnership is not aligned with or complementary to the rest of Oracle’s offerings.
Oracle management, including Ms. Catz and Mr. Ellison, are strong supporters of the current US administration, and therefore were likely a much more attractive technology partner for TikTok than Microsoft.
It appears that there are few, if any, assets to be exchanged in this partnership. Oracle is essentially gaining the favor of the current US administration at little cost to the company. Whether this results in an additional financial or operating benefit to the company in the future is yet to be seen.
US Administration Can Claim a Win
The current US administration has made clear that it is unhappy with China’s trade policies and concerned with China’s use of US intellectual property.
With this partnership, the administration can claim/signal that it has been tough on China and that it is focused on protecting US cyber privacy and security. The reality is, these issues will not be resolved until the details of this partnership are made clear, and it is understood how the algorithms, data, images, and advertising will be protected. It is highly unlikely ByteDance will cede control of its algorithms and intelligence.
Why TikTok? Why Now?
It is also not news that the current US administration is struggling with its engagement on social media platforms. It is also well-known that TikTok users are credited with causing the Trump campaign to mistakenly expect huge crowds at a rally.
With Oracle at the helm of this partnership, rather than another company, the current US administration will have a more friendly social media platform that it can have more influence over.
With this move, the current US administration can claim success with respect to its position on China trade, taking a position on data privacy and security, and more friendly control of a popular social media platform.
For US citizens, business interests, and government entities, this partnership will provide little if any additional privacy and security. Users of any platform or service must proactively define and manage their security.
In the immediate future, this is a big nothing for Oracle. It may curry favor with this US administration for future business and engagements. But, this favor will not be explicitly linked to this event.
The current US administration will be far more comfortable with Oracle as the partner in this deal. And, as mentioned above, it can claim a number of political wins.
The US government must develop a proactive, strategic policy for protecting the cybersecurity and privacy of its citizens, business interests, and government, including information, context data, search, advertising, and algorithms. This policy must guide strategic engagement of global partners and adversaries.