Analysis: Cloud dominance remains corporate focus, with Chairman Larry Ellison’s sights set on $10B record, writes Technology Business Research Analyst Meaghan McGrath.
HAMPTON, N.H. – Supported by its newly implemented Accelerated Buying Experience cloud sales strategy, which eases and expedites the quote to book process for customers purchasing Oracle Cloud solutions, Oracle grew Cloud SaaS & PaaS revenue more than 18% sequentially, almost 66% YTY, to $690 million in the final quarter of the company’s FY16.
Simultaneously, declines in new software licenses, hardware systems products and support, and professional services continued amid Oracle’s shifted focus. Oracle looks to continue reforming itself as a leading cloud vendor in FY17, particularly maintaining a focus on adoption growth across continually expending cloud portfolios, and improved profitability with improved efficiencies and economies of scale. While not the focus of growth efforts, Oracle’s hardware and legacy software capabilities remain key factors in its ability to innovate and differentiate itself in the competitive cloud market and be the first company to reach $10 billion in annual Cloud SaaS & PaaS revenue
Uniting the best of both on-premises and public cloud solutions
In its company-wide shift to becoming a leading cloud vendor, Oracle has aligned its hardware assets and capabilities to further support customers’ transitions. Early in the quarter, Oracle unveiled the Oracle Cloud at Customer family of offerings, the most marketed of which was the Oracle Cloud Machine. Similar to previously release engineered systems, these units utilize Oracle’s breadth of capabilities across hardware, software and managed services to deliver pre-integrated units, but the Oracle Cloud Machine brings PaaS and IaaS identical to those available in Oracle’s public cloud portfolio, into customers’ data centers, at the same subscription or metered price point as Oracle Public Cloud. Customers are able to access the benefits of public cloud including scalability, performance, agility, and subscription pricing, while keeping data within their corporate data center and firewall. Comprised of flexible hardware configurations and the exact same software as Oracle-hosted cloud solutions, the cloud on-premises solution is fully compatible with the truly public cloud solutions, and workloads can be moved seamlessly.
The value (and differentiation from customer-hosted private clouds comprised of other Oracle systems) of the Oracle Cloud at Customer offerings comes in the subscription billing that removes the need for capital expenditures and diverts the delivery, installation and maintenance tasks to Oracle, as well as the identical pre-configuration that ensures that developers will be able to shift applications and workloads from public cloud to their cloud on-premises, without alterations. Oracle Cloud at Customer’s greatest appeal will be for organizations in highly regulated industries or geographies that face data residency barriers to public cloud adoption, but who wish to reap the benefits of a public cloud subscription, and will support Oracle’s emergence as a leader in currently underserved regions or segments with restrictive regulations.
Oracle reignites investments in Industry Solution acquisitions
Further building on its transition to a cloud vendor, Oracle has broken its predominantly LOB-driven After a more than 18 month hiatus that saw acquisition dollars fund middleware- and data and marketing cloud-focused portfolio additions, Oracle refocused $1.2 billion on its industry solutions strengths with the acquisition of Textura and Opower in April and May, respectively. Textura further extends Oracle’s Primavera portfolio, which like much of the Oracle portfolio has been re-architected for cloud consumption in the last year, with specific expertise in construction and engineering. Former SVP and GM of Oracle’s Primavera Global Business Unit, Mike Sicilia, will head the new Oracle Engineering and Construction Global Business Unit to drive adoption of the vertically-oriented project management solutions. Similarly, Opower further extends Oracle Utilities Cloud Solutions and Oracle’s 2012 DataRaker acquisition with end-customer data ingestion and analytics that fuel improvements in customer satisfaction, compliance and operational efficiencies.
(C) TBR
