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Oracle (ORCL) Focuses on Customer Flexibility, Launches Services

·4 min read

Oracle’s ORCL cloud services platform, Oracle Cloud Infrastructure (OCI), announced the launch of new capabilities and services that are focused on providing customers with more flexibility.

OCI will expand with 11 new compute, networking and storage capabilities and services, which will enable customers to run their workloads more efficiently and securely at lower costs.

Global cloud adoption continues to expand rapidly as business models transform and the demand for secure remote technology accelerates.

Oracle’s performance is gaining from momentum across the cloud business, driven by strong uptake of OCI services and Autonomous Database offerings. Healthy adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management (HCM) augurs well in the long haul.

Oracle shares are up 21.7% in the past year compared with the Zacks Computer - Software industry’s return of 11.4% and the Computer and Technology sector’s decline of 4.5%.

Oracle Corporation Price and Consensus

Oracle Corporation Price and Consensus
Oracle Corporation Price and Consensus

Oracle Corporation price-consensus-chart | Oracle Corporation Quote

Momentum in Cloud Offerings to Drive Top Line

The company’s SaaS, infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) products are likely to grow strongly over the next few years as enterprises rapidly migrate to the cloud environment.

In December 2021, Oracle announced that India-based Wipro Limited WIT would implement Oracle Cloud Infrastructure (“OCI”) services to boost the Cargo Reservations, Operations, Accounting and Management Information System (“CROAMIS”) Application suite.

Wipro’s CROAMIS solution is a comprehensive platform designed to handle all airline cargo management requirements. By migrating to OCI, Wipro will be able to provide CROAMIS as part of Wipro FullStride Cloud Services. This will help Wipro to modernize the air cargo operations for clients and help the latter achieve scalability, increased security and slash data storage and outbound data transfer costs.

For the fiscal third quarter, Oracle’s Cloud services and license support revenues (73% of total revenues) in the reported quarter increased 5% year over year (up 8% at cc) to $7.637 billion. The upside can be attributed to continued strength in the Fusion, Autonomous Database and Oracle Cloud Infrastructure (OCI) services.

In the fiscal third quarter, management noted that the company’s total cloud revenues on annualized basis stood at $11.2 billion and were up 26%. Management added that the strategic back-office cloud applications business increased 29% and the strategic back-office cloud applications business now has $5.1 billion in annualized revenues.

Revenues from Fusion ERP, Fusion HCM and NetSuite ERP were up 35%, 22% and 29%, respectively, in the fiscal third quarter.

The growing clientele is helping the company to maintain its leading position in the cloud domain.

In the fiscal third quarter, consumption revenues for OCI services, which includes Autonomous Database, soared 93% at cc. Cloud customer consumption revenues increased 43% year over year.

Noteworthy deal wins for OCI during the last reported quarter include Wipro Limited, Red Bull Racing Honda, Siemens, Toyota, Institut National d'Assurance Maladie au Togo (INAM) and Cognizant.

The next-generation autonomous database launched by Oracle, supported by ML, is also witnessing steady traction. New product introductions, including new OCI managed services, are likely to boost growth in the category. The autonomous database in Gen2 public cloud infrastructure is witnessing a healthy uptake.

Oracle is expanding its worldwide cloud region footprint to support its cloud services. The company unveiled a cloud region each in France (Marseilles), Singapore and the United Arab Emirates, taking the total number of cloud regions to 34 at present. Oracle is planning to have 44 cloud regions by the end of 2022.

Zacks Rank and Stocks to Consider

Oracle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Here are some better-ranked stocks worth considering in the broader Computer and Technology Sector:

Advanced Micro Devices AMD flaunts a Zacks Rank #1 (Strong buy).

AMD shares are up 32.3% in the past year compared with the Zacks Electronics - Semiconductors industry’s return of 9.9% and the Computer and Technology sector’s fall of 4.6%.

Apple AAPL has a Zacks Rank #2 (Buy).

AAPL shares have returned 24.8% in the past year compared with the Zacks Computer - Mini computers industry’s rise of 24.8% and the Computer and Technology sector’s fall of 4.5% in the past year.

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Apple Inc. (AAPL) : Free Stock Analysis Report

Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

Wipro Limited (WIT) : Free Stock Analysis Report

Oracle Corporation (ORCL) : Free Stock Analysis Report

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