Where Oracle Stands in the Overall Cloud Space
Cloud is dominated by the top five players
Earlier in this series, we discussed the likelihood of the cloud’s dominance in Oracle’s (ORCL) fiscal 1Q18 results. Although Oracle continues to scale up in the cloud space, it has not been able to crack the top five spots in the cloud space. As the chart below by Synergy Research Group shows, more than half the cloud space is dominated by Amazon (AMZN), Microsoft (MSFT), Google (GOOG), and IBM (IBM).
Oracle and Alibaba (BABA), both achieving high growth rates, are placed below these players among the next ten top-ranked cloud providers. Robust growth in the Chinese (FXI) market has helped Alibaba secure fourth place in the IaaS space.
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Double-digit growth could continue in the cloud
In 2Q17, cloud infrastructure service revenues such as PaaS, IaaS, and hosted private cloud services reached ~$11.0 billion. They are expected to grow 40% annually. Moreover, global cloud and SaaS (software-as-a-service) services markets are expected to be worth more than $200.0 billion by 2020.
Within the overall cloud, public IaaS (infrastructure-as-a-service) and PaaS (platform-as-a-service) are expected to be the fastest-growing segments. Plus, they are forecast to expand at an average annual rate of 29% in the next five years.
This expected growth in the cloud would benefit Oracle, which is aggressively trying to attract its on-premise software customers to its SaaS model.