Oracle's new Telefonica deal shows why telcos are key to the cloud

As Oracle ramps up its cloud footprint, it's enlisting the help of telcos across the globe.

Oracle on Thursday announced that it's expanding its relationship with Telefonica, working with the Spanish telecommunications giant to grow its cloud business in Spain and the broader market that Telefonica serves. 

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The new arrangement is two-fold: First, Oracle and Telefonica will jointly offer cloud platform-as-a-service and applications to enterprises and public sector organizations. Next, Telefonica will serve as a hosting partner for Oracle's upcoming cloud region in Madrid.

Oracle has been expanding its cloud business across the globe rapidly -- the Madrid region is one of at least 44 cloud regions Oracle plans to have open by the end of 2022. The company currently has 37 cloud regions in 20 countries. 

As it opens up new locations, Oracle partnering with telcos offers a unique opportunity: they can help Oracle meet local data governance rules, and they can help the business connect with local and regional enterprise customers. 

On top of that, telcos are big cloud customers in their own right, particularly as the 5G era opens up new business opportunities for the industry. Telefonica España, for instance, recently signed a multi-year agreement to migrate its mission-critical commercial and operational systems to Oracle Cloud Infrastructure. It's also building its new communication services for consumers and businesses on OCI. 

Oracle has similar relationships with Telecom Italia, the Indian telecom Bharti Airtel, french telecom Orange and other global telcos.

Oracle's approach to cloud reflects "a trend you're starting to see," Oracle Cloud Infrastructure VP Leo Leung said to ZDNet. "It's less about having a handful of very big, hyperscale regions and more about having a footprint in every country. Spain is just the latest example of that."

Oracle's hybrid and multi-cloud strategy aligns with Telefonica's goal of hosting customer data regionally or in-country where possible and giving customers cloud services that meet their data sovereignty needs. Besides meeting regulatory requirements, local data hosting has clear benefits in terms of latency and performance. 

Meanwhile, Telefonica will help bring Oracle Cloud services to market with its team of more than 3,000 expert professionals with certifications in cloud services and cybersecurity. 

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