Mar
20
2018
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Oracle’s cloud biz heading in the wrong direction right now

Oracle announced its quarterly earnings last night, detailing that its cloud business grew 32 percent to $1.6 billion in the quarter. That might sound good at first blush, but it’s part of three straight quarters of reduced growth — a fact that had investors jittery over night. It didn’t get better throughout the day today with Oracle’s stock plunging over 9 percent as of this writing.

When you consider that enterprise business is shifting rapidly to the cloud, and that the cloud business in general is growing quickly, Oracle’s cloud numbers could be reason for concern. While it’s hard to nail down what “cloud” means when it comes to technology companies’ earnings because it varies so much in how each one counts infrastructure, software, or platform; the general trend from Oracle seems contrary to the eye-popping growth numbers we have seen from other companies.

Oracle against the world

Oracle’s cloud revenue broke down as follows: SaaS, up 33 percent to $1.2 billion, and platform and infrastructure revenue combined up 28 percent to $415 million. To put those figures into context, consider that last quarter Alibaba reported overall cloud revenue of $533 million,which was up a whopping 104 percent year over year.

Looking purely at Infrastructure services, Canalys reported that in the third quarter of 2017, Microsoft grew at around 90 percent year over year, while Google grew around 75 percent YoY. Even market leader Amazon, which controls over 30 percent of the market, had around a 40 percent growth rate, fairly remarkable given its size.

All of that suggests that Oracle, which came to the cloud late, should be on a higher growth trajectory than it’s currently showing.That’s because it’s generally easier to grow from a small number than it is from a big number to bigger number (as Amazon has had to do).

The company’s on-prem software revenue continues to grow (which includes lucrative license and maintenance revenue from existing customers), and still accounts for the vast majority of its top line. However, at this point, you would think Oracle would want to see that revenue growth shifting away from on-prem and towards its cloud business.

What’s worse is that co-CEO Safra Catz predicted in the earnings call with analysts that the cloud growth could dive even further next quarter. “Cloud revenues including SaaS, PaaS and IaaS [all cloud business combined] are expected to grow 19% to 23% in USD, 17% to 21% in constant currency,” she told analysts this week.

Oracle co-CEO Safra Catz Photo: KIMIHIRO HOSHINO/AFP/Getty Images

Looking for a brighter future

Chairman Larry Ellison tried to point to the fully automated cloud database product announced at Oracle OpenWorld last fall as a proof point of a brighter cloud future, but so far the numbers are not bearing that out. It’s worth noting that he did also indicate that more automated cloud products are on the way.

Oracle has spent the last several years putting a lot of cloud pieces together, and as Catz pointed out, they don’t have to invest further to handle additional capacity in their SaaS business, but with the numbers heading in the wrong direction that may not be the problem.

Oracle certainly has enterprise credibility, and that should bode well for its cloud business, but as a late comer to the market we should be seeing much brisker overall growth than this. Over time that may happen, but for now Wall Street was not happy with Oracle’s results and the firm probably has to show more from its cloud products before they can change investors’ minds.

Feb
12
2018
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Oracle to expand automation capabilities across developer cloud services

Larry Ellison, chairman of Oracle Corp. Last fall at Oracle OpenWorld, chairman Larry Ellison showed he was a man of the people by comparing the company’s new autonomous database service to auto-pilot on his private plane. Regardless, those autonomous capabilities were pretty advanced, providing customers with a self-provisioning, self-tuning and self-repairing database. Today, Oracle announced it was expanding that… Read More

Oct
04
2017
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Splunk is latest company to take exception to Larry Ellison’s slams at Oracle OpenWorld

 Larry Ellison was at it again yesterday, making friends, influencing people and pissing off rivals. It was AWS in the keynote earlier in the week. Yesterday, it was Splunk, a seemingly innocuous logging software company, which somehow fell into Ellison’s marketing cross-hairs. The company took serious exception. Splunk is best known for logging all events related to IT. Ellison announced… Read More

Oct
04
2017
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Cloud computing has demanded a kinder, gentler Oracle

 Oracle has always had a swagger that reflects the public persona of its bombastic leader, Larry Ellison, but over the last several years, as the company has transitioned to the cloud, it has required a transformation to one that is softer and more customer-centric. Mind you, this was a company that was the poster child for vendor lock-in the 90s and early 2000s. They knew you were looking for… Read More

Oct
02
2017
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AWS fires back at Larry Ellison’s claims, saying it’s just Larry being Larry

 When Oracle chairman Larry Ellison announced his company’s new autonomous database product at the Oracle OpenWorld conference keynote, he took several minutes to disparage AWS, one of his chief rivals in the cloud market. As market leader, Amazon stands firmly in Ellison’s crosshairs, but AWS took exception to his comments, and decided to issue a public rebuke. Read More

Oct
02
2017
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Oracle adds AI development service to platform offerings

 Oracle came late to the cloud and it’s been playing catchup in recent years trying to add a wide range of services that customers are going to be demanding from a cloud vendor. To that end, the company added artificial intelligence as a service to its dance card today at Oracle OpenWorld. The company has been busy today with a flurry of announcements including a new autonomous database as… Read More

Oct
02
2017
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Oracle climbs on blockchain bandwagon with new cloud service

 Oracle is working hard to be a SaaS vendor that matters, whether with its new autonomous database service or getting involved with blockchain. Today, the database giant announced a new blockchain service at Oracle OpenWorld that aims to give enterprise customers who want to get involved with the blockchain, a fully managed approach. “There are not a lot of production-ready… Read More

Oct
02
2017
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Larry Ellison pokes AWS while unveiling intelligent database service at Oracle OpenWorld keynote

 Oracle is far behind in the cloud and chairman Larry Ellison knows it, so he takes whatever opportunity he can to take a swipe at market leader AWS. Last night’s Oracle OpenWorld keynote was no exception. When Ellison introduced the company’s new autonomous database, he couldn’t resist going after his chief rival while he was at it. The autonomous database actually does… Read More

Sep
18
2014
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Oracle Stock Drops 2.5% On News That Larry Ellison Has Relinquished His CEO Title

larry-ellison-181621516 Today after the bell, Oracle announced that its long-time premier Larry Ellison is no longer its CEO. Former HP CEO Mark Hurd will take over the job in partnership with Safra Catz. Catz will manage finance and manufacturing, while Hurd will handle sales. Ellison will take on the titles of Executive Chairman of the Board and CTO. Hurd left HP under negative circumstances, including allegations… Read More

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