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How R&D Is Driving Oracle’s Business

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Importance of R&D

The growing competition in the cloud computing space has prompted Oracle (ORCL) to boost its investment in research and development (R&D). The company’s policy of allocating a significant amount of funds toward R&D has allowed the company to launch products such as its Fusion ERP (Enterprise Resource Planning) and HCM (Human Capital Management).

The launch of its new fully autonomous self-driving database, which is available in the Oracle cloud, is engineered to reduce human labor and human error. Oracle plans to launch additional autonomous services such as analytics, mobility, application development, and autonomous integration services in the upcoming months. These cutting-edge technologies are the result of the company’s ongoing investment in R&D.

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R&D expense trend

From the graph above, we can see the R&D expenditure trend of Oracle in the last five quarters. In fiscal 3Q18, Oracle’s R&D expenditures reached $1.5 billion, down 1.3% YoY (year-over-year). In fiscal 9M18, the company’s R&D stood at $4.5 billion, nearly on par with fiscal 9M17. In the last five quarters, the company spent ~$7.7 billion in R&D at an average of ~$1.5 billion per quarter.

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