Earlier today, we published a research report on the possibilities and the likely outcomes if Oracle was to land TikTok. Since then, I’ve received many calls from friends in the media about the implication for TikTok’s India business and whether or not this deal will also include India. So, here are a few observations:
1/ This deal is yet to be confirmed, but important to remember that it’s being touted as a technology partnership more than anything else.
At Greyhound Research, we believe this arrangement most likely means that while Oracle will manage the U.S. territory’s data, it won’t necessarily own the app, the source code, and the algorithms. For more on this, please read our research report from earlier today.
2/ Oracle managing TikTok’s U.S. territory’s data makes perfect sense since it’s a U.S. based company, but it operating India won’t work.
Besides the issue of data theft and misuse impacting national security, the ban of Chinese apps in India is also closely linked to the geo-political affairs and the recent battle that ensued on the India-China border. Hence, Oracle won’t cut the demands of the government. At Greyhound Research, we believe If a similar arrangement ought to be worked out for India, it will have to be an India-based company of repute.
3/ Among other things, India’s Government will mandate many essential and critical requirements for a similar deal to be constructed.
Besides being a local company, which is a given, requirements can include the need for this company to have significant deep pockets and current infrastructure investments, including local data centers. At Greyhound Research, we believe running a business like TikTok can be expensive and requires the ability to stay invested (directly or via partners and investors) for a longish period before returns can be secured. More than anything else, such a purchase only makes sense if and only if the company has a dedicated subscriber base it can potentially take mine with such investment or has a portfolio of internet-based offerings that can be cross-leveraged. What is important to note is that this space (in which TikTok operates) has seen many new additions in the past months. Hence, a large company that may already own (directly or indirectly) a similar player (like TikTok) may not attract as much scrutiny from statutory bodies like the Competition Commission of India.
Since we are speculating about a possible suitor for TikTok’s India business, then our bet is on Jio Platforms. To learn more about why we believe Jio fits the bill, check out our latest report ghound.co/JioPlatforms.
To read the full report on why we at Greyhound Research believe Oracle, as the trusted partner for TikTok in the U.S., maybe the best thing that happened to Oracle in recent times, please use the link below:
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