Enterprises’ ongoing migration of databases from on-premises hardware to the cloud has encouraged Oracle (ORCL) to boost its cloud computing service. Despite entering the cloud space later than established players such as Amazon (AMZN), Microsoft (MSFT), IBM (IBM), and Google (GOOGL), Oracle has accelerated its cloud computing service through acquisitions and new product developments.
Acquisitions could allow Oracle to deliver more software application support in the cloud, thereby reducing the time for the company to develop its own applications. The company’s Fusion ERP (enterprise resource planning) and HCM (human capital management) products are generating strong growth due to growing demand across industries.
In fiscal Q3 2018, the company inked major ERP and HCM contracts with companies such as Dubai Ports, Morrisons, Avis Budget Group, Principal Financial, and Marina Healthcare, which may reflect in the company’s upcoming fiscal quarters.
As shown in the graph above, Oracle’s cloud software-as-a-service revenue has grown at a compound annual rate of 7% in the last five quarters. In the last three quarters, it has maintained excellent growth, of above 30% per quarter.
In fiscal Q3 2018, its total cloud revenue rose 32% YoY (year-over-year) to $1.6 billion. In the first nine months of 2018, its cloud revenue rose YoY to ~$4.6 billion from ~$3.2 billion. Oracle’s cloud business has maintained average quarterly revenue of $1.5 billion in fiscal 2018, against $1.1 billion in fiscal 2017.