Is Oracle Cloud at Customer Meant for Data Center Mobility?



Oracle Cloud at Customer provides workload mobility between cloud and data center

Previously in the series, we looked at Oracle’s (ORCL) new offering, Oracle Cloud at Customer. We saw how it could improve Oracle’s position in the cloud space since increased spending in security and public cloud is expected to cross $200 billion in 2016.

With Oracle Cloud at Customer, Oracle is offering an easy way to shift to the cloud. It provides workload mobility between cloud and an on-premise data center.

Regarding its pricing, Oracle employs a pay-by-usage model for its new offering. Customers are charged according to their usage and spared from incurring an upfront expense of an annual enterprise software license.

Article continues below advertisement

Increasing competition pushes Oracle to consider new offerings

The cloud space is dominated by five players: Amazon (AMZN), Microsoft (MSFT), IBM (IBM), Google (GOOG) (GOOGL), and Salesforce (CRM). Although Oracle’s cloud revenues reported a growth of 44% on a YoY (year-over-year) basis in its recent fiscal 3Q16, it’s yet to make a mark in the cloud space.

Oracle could face competition in the database space, a place where it holds a leadership position. Microsoft recently announced that it’s making its SQL Server database available on Linux OS (operating system) by mid-2017. With its new offering, Oracle is trying to expand its reach in the cloud as well as build its customer base.

Investors who want to gain exposure to Oracle could consider investing in the Technology Select Sector SPDR ETF (XLK). While XLK invests ~3% of its holdings in Oracle, it also has an exposure of 31% to application software.

Next, we’ll see why Oracle is suing Hewlett Packard Enterprise (HPE).


More From Market Realist