Cloud performance in fiscal 2Q18
If Oracle’s (ORCL) fiscal 2Q18 earnings exceed the analysts’ expectations, its stock price should get a boost and continue to inch upwards. Its performance in the cloud will likely be a major stock booster, because SaaS (software-as-a-service) revenues are not only viewed as more predictable than licensing revenues—only more measurable and built-to-scale. This trend could explain the increased preference among software companies for subscriptions.
According to John Dinsdale, chief analyst and research director at Synergy Research Group, “IaaS [infrastructure-as-a-service] and PaaS [platform-as-a-service] markets tend to get more attention and are indeed growing more rapidly, but the SaaS market is substantially bigger and will remain so for many years.”
Leadership in enterprise business applications and ERP
Oracle should also benefit from the current trend wherein customers are increasingly moving their ERP (enterprise resource planning) systems to the cloud. According to Oracle CTO (chief technology officer) Larry Ellison, ERP is the largest application market and enjoys a leadership position in this space.
In the recent past, Oracle has claimed that it aims to hold a position among the world’s top two SaaS providers. It goes without saying that Microsoft (MSFT), which currently leads the enterprise SaaS space, is on Oracle’s radar.