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Inside Oracle’s Efforts to Expand into Cloud Computing Services


Jun. 20 2019, Updated 4:23 p.m. ET

Cloud computing growth

The growing adoption of cloud services technology, which enables a user to store and share data such as applications, files, and more to remote locations, has pushed Oracle (ORCL) to focus more on its cloud business.

As per the latest Gartner report, worldwide public cloud services revenues are projected to grow 17.3% ($214.3 billion) in 2019, up from $182.4 billion in 2018. By 2022, public cloud services revenues are expected to touch $331.2 billion.

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Oracle’s focus on the cloud

Despite being a late entrant in the cloud computing market, Oracle is aggressively investing in expanding its cloud-based software services, as many companies are shifting to cloud computing from the traditional on-premises database model to cut costs.

Oracle is gaining momentum in the cloud applications business. Revenue from its Fusion and NetSuite cloud applications businesses grew significantly in fiscal 2019, which ended in May. Fusion ERP (enterprise resource planning) and human capital management cloud applications revenue as well as NetSuite ERP cloud applications revenue each grew 32% in the year, making the company a leader in worldwide cloud ERP.

Peers on the cloud

Oracle’s peer Workday expects its cloud subscription revenue to rise 27%–28% in fiscal 2020, which will end in January 2020.

Earlier this month, Google announced its first cloud computing acquisition with the purchase of data analytics company Looker Data Sciences for $2.6 billion in cash. The addition of Looker will help the search engine giant sell more cloud storage and software services and compete with larger rivals Amazon (AMZN) and Microsoft (MSFT).

Earlier this month, Microsoft and Oracle also joined hands to work together on their cloud computing services via high-speed links between their data centers. According to Oracle’s CEO, the partnership is expected to help the company to accelerate its transition from an on-premises database to an autonomous database service.


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