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Vocado Could Accelerate Oracle’s Cloud Penetration

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May. 14 2018, Published 3:14 p.m. ET

Vocado helps students identify funding eligibility

Last month, Oracle (ORCL) acquired Vocado, a software startup focused on student loans. Vocado helps colleges and students with matters of higher education financing. It works with thousands of financial aid sources to optimize higher education funding. It helps students identify education funding eligibility and obtain financing for their academic goals.

Although Vocado’s solution is cloud-centric, it supports both cloud and on-premise student information systems.

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Oracle’s cloud revenue grew 32%

Oracle intends to absorb Vocado into its Oracle Student Cloud division, which provides a software suite aimed at institutions of higher learning. “Vocado adds the most advanced financial aid solution with a highly-automated and scalable platform. Together, Oracle and Vocado offer institutions the most complete SaaS solution suite in higher education,” Oracle said in a statement.

SaaS (Software as a Service), which involves delivering software over the Internet, is a category of cloud computing. Oracle’s SaaS revenue increased 33% YoY (year-over-year) in fiscal 3Q18 (February 2018 quarter). As a result, Oracle’s overall cloud revenue increased 32% YoY to $1.6 billion. Amazon’s (AMZN) cloud revenue grew 49% YoY to $5.4 billion in 1Q18 (March quarter), while Microsoft’s (MSFT) core cloud business grew 93% YoY in the same period. Cloud revenue increased 20% YoY at IBM (IBM). Google (GOOGL) said in February that its cloud business was producing an average of $1 billion in quarterly revenues.

Less than 15% of Oracle customers have migrated to cloud

The acquisition of Vocado, whose solution marries cloud and on-premise applications, could help accelerate Oracle’s penetration in the cloud computing market, especially by bringing its existing customers to cloud quickly. Oracle recently said that less than 15% of its on-premise application customers have migrated to cloud.

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