Oracle Cloud Services Now Fastest Growing Cloud Provider

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Oracle met revenue estimates when it released its financial results for the first quarter of the fiscal year 2023. The tech giant amassed $11.45 billion in revenues, representing an 18% growth for the quarter. This is much higher than the 5% growth that the company garnered in the previous quarter. Oracle’s total revenue was boosted by its $28 billion acquisition of tech company Cerner, from which it received a $1.4 billion contribution.

Despite its increasing revenue, Oracle missed expectations with regard to income. The company posted earnings of $1.03 per share, below the $1.07 anticipated by analysts. In addition, its net income tumbled from $2.46 billion in 2021 to $1.55 billion this year, which is a decrease of 37%. Its operating income also dropped by 23%, year-over-year. Oracle blames unfavorable exchange rates for its diminished earnings and says that the company would’ve had even higher revenues if not for these.

Revenue guidance for the upcoming quarter missed expectations as well. Oracle anticipates adjusted earnings per share, ranging from $1.16 to $1.20, below the $1.27 expected by analysts. Likewise, the company’s projected revenue growth of 15% to 17% is slightly lower than the industry expectation of 18% for the second quarter.

This is no cause for alarm, however. Oracle has surpassed some of the previous projections it made. In fact, the company’s revenue is $200 million higher than its guidance for the first quarter. And it has identified a key area of its business that drives the most growth: cloud applications and services. Oracle intends to further develop its cloud businesses, and its acquisition of Cerner comes as a step in the right direction.

Rising Cloud Provider

Cloud applications and services account for 30% of Oracle’s revenue. Quarterly revenue from its IaaS segment jumped by 52% ($0.9 billion) while its SaaS segment climbed by 43% ($2.7 billion). The company’s total cloud revenue amounted to $3.6 billion, representing a quarterly increase of 45%. This makes Oracle the fastest-rising major cloud provider in the market, exceeding the cloud revenue growth of Google Cloud (36%), SAP (34%), and Amazon Web Services (33%).

In view of this, Oracle intends to enhance the connectivity between major cloud providers. CEO Safra Catz announced that Microsoft Azure and Amazon Web Services (AWS) users can access Oracle Database and the company’s MySQL HeatWave, respectively. On top of the database, Azure users will also have access to Oracle Exadata Cloud Service and Oracle Autonomous Database. Meanwhile, AWS users get to leverage MySQL’s analytics, machine learning, and transaction processing solutions.

When it comes to market share for Q2 2022, recent cloud computing statistics reveal that AWS has a commanding lead at 34%. Following it are Microsoft Azure (21%), Google Cloud (10%), Alibaba (5%), and IBM/Kyndryl (4%). Oracle sits at the eighth spot with 2%. With the way things are going, the popular tech company would likely scale up the ladder and pass the 3% market share of Salesforce and Tencent. It can eventually threaten Kyndryl and Alibaba if it manages to sustain its unprecedented growth in the next few quarters.

As such, Oracle chair and co-founder Larry Ellis assured users and investors of more business down the line for Oracle Cloud Infrastructure. He presents the company’s cloud services as a more cost-effective alternative to industry leader AWS and is in the know of brands that have switched services. It looks like exciting things are coming up for Oracle and its cloud platform.