Previously in this series, we discussed Oracle Corporation’s (ORCL) revenue growth in 1Q16. Its cloud business continued to report double-digit growth in the same quarter. Oracle’s cloud revenue rose by approximately 29% on a YoY (year-over-year) basis to reach $611 million. In constant currency terms, this growth was 34%. Continuing its habit of citing Workday (WDAY) and Salesforce.com (CRM) in its earnings release, Oracle stated that its billings grew by 70%, which was faster than both these companies.
The double-digit growth in Oracle’s cloud business indicates that the company’s transition toward cloud technology has finally started yielding results. However, despite this decent growth, cloud revenues still account for less than 10% of Oracle’s overall quarterly revenue. In 1Q16, cloud revenues contributed 7% of Oracle’s overall revenues.
Approximately 65% of the Oracle’s products and offerings are currently in cloud. Oracle’s Co-Chief Executive Officer, Mark Hurd, has said that this percentage will increase to 95% by October 2015.
Triple-digit growth in bookings
Oracle’s 1Q16 bookings grew by 165% to $191 million. Oracle expects this growth to translate into SaaS (software-as-a-service) and PaaS (platform-as-a-service) revenue in the second half of 2015. Combined revenues from SaaS and PaaS grew by 38% on a year-over-year basis to $452 million. Thus, Oracle’s cloud business continued to post double-digit growth on the back of SaaS and PaaS revenue growth.
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Later in this series, we’ll continue to discuss in detail the growth in Oracle’s SaaS and PaaS businesses. We’ll also discuss how the expected growth in these two segments is likely to expand Oracle’s margins in the future.
In the next part of this series, we’ll look with more in detail at how Oracle’s SaaS and PaaS businesses maintained double-digit growth in 1Q16.