Enterprise software giant Oracle may be starting to lose its fuddy-duddy image as it rapidly embraces Cloud computing. Latest figures show that it is starting to reap the benefits, posting its highest organic growth since switching to Cloud applications more than five years ago.
Third quarter results to 28 February 2022 up 7% to $10.5 billion, at constant currencies. Cloud services and license support grew 8% to $7.6 billion, while Cloud and on-premise licences were up 4% at $1.3 billion, again, after stripping out currency fluctuations.
The performance was underpinned by the progress across its suite of Cloud-based strategic back-office applications, such as Fusin and NetSuite. ‘These now have annualised revenues of circa $5 billion and are collectively growing at around 30% year-on-year,’ said Megabuyte analyst Cameron Naylor.
But coming late to the Cloud does come at a price, with earnings missing expectations as investment continue to run hot. Earnings per share came in at $1.13 versus the $1.18 forecast by analysts.
The miss saw Oracle shares slide in after-hours trading, down 4% at $73.56.
INVESTING IN A CLOUD FUTURE
Oracle will continue to spend big on Cloud infrastructure and applications next year as it tries to take on Cloud hyperscalers Amazon, Microsoft and Google-owner Alphabet, earmarking capital expenditure of $4 billion.
The company is also targeting more healthcare exposure, where it hopes to extend its embedded services and solutions. In December 2021, it agreed to buy health information technology vendor Cerner for more than $28 billion, a move that will ‘bolster its position in a sector where it has existing finance, operations, Human Capital Management, customer experience, analytics and Cloud computing capabilities.
