Oracle Pushing Further Into the Cloud

According to TheInfoPro Wave 5 Cloud Computing Study, the worldwide cloud computing market is projected to grow 36% annually to $19.5 billion by the year 2016. The study estimates that of the cloud-related projects being conducted by organizations, the biggest demand is in internal private cloud, followed by cloud provider strategy planning. Cloud projects related to Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS) come a close third and fourth in terms of priority projects. It’s little wonder, then, that Oracle (Nasdaq: ORCL) is investing heavily in the cloud space.

Oracle’s Financials

Oracle’s Q1 revenues of $8.4 billion fell marginally short of the market’s projected revenues of $8.48 billion while reporting growth of 2% over the year. EPS of $0.59 was also ahead of the Street’s projected earnings of $0.56 for the quarter.

By segment, software licenses and cloud software subscriptions revenues grew 5% to $1.7 billion. Software license updates and product support revenues grew 7% to $4.4 billion. Hardware systems products revenues stood at $669 million.

For the current quarter, Oracle expects revenues to grow 1-4% over the year to $9 billion-$9.28 billion, compared with market projections of $9.41 billion. EPS projections of $0.64-$0.69 were short of the market’s projections of $0.69. Oracle did not disclose fiscal year projections.

Oracle Grows on the Cloud

Oracle continues to push its presence into the cloud segment. Last quarter, it announced several important partnerships within cloud computing with Microsoft and Salesforce.com. For instance, it announced both several new products and upgrades to existing products at the recent Oracle Open World conference. Over the past few quarters, Oracle has expanded its presence within cloud computing through acquisitions, and it now offers customers enhanced products from these acquisitions. The most recent product upgrades include improved integration of communications and social media interactions for customer acquisition solutions developed by Eloqua. New releases are also lined up for Taleo’s human capital management solutions.

Oracle also announced the roadmap to integrate the IaaS software solution, Nimbula Director, with Oracle Exalogic Elastic Cloud. The integration will result in a scalable IaaS product that will include self-service provisioning of virtual resources, single management for cloud and traditional IT estates, and the capabilities of Oracle Exalogic and OpenStack on a single system.

Oracle also announced the release of its in-memory database, Exadata. In 2000, Oracle’s competitor, SAP released HANA, its in-memory database. Since its release, SAP has managed to establish a strong presence within the segment and is offering stiff competition to Oracle. Oracle is trying to counter HANA’s threat through this new release. Exadata is the in-memory option for Oracle’s12c Database and will help accelerate real-time analytics on big data. Oracle claims that their solution will improve speed of database search queries a hundred-fold and double the rate of transaction processing. But, according to Oracle, the product can not be compared with HANA simply because HANA implementation requires HANA to be coded, while Oracle’s offering does not require any changes to the application and can be implemented by enabling the option.

In response to the growing demand for mobile cloud computing, Oracle released a mobile cloud service that leverages its mobile platform to enable organizations to build and extend apps to mobile devices. The solution extends Oracle Identity Management to mobile to ensure mobile devices are secure and corporate data is kept isolated from personal apps.

Oracle’s stock is trading at $33.50 with a market capitalization of $155.64 billion. It touched a 52-week high of $36.43 in March 2013.