Oracle ORCL recently announced that it intends to recruit around 2,000 employees globally to strengthen its expanding Cloud Infrastructure business.
The new employees will assume roles pertaining to cloud operations, software development, among other business processes. This is expected to aid Oracle in managing new product enhancements, and internationally expanding clientele.
The company will also undertake further real estate investments in a bid to maintain the new workforce. Reportedly, the new jobs are primarily based in the San Francisco Bay Area, Seattle, and India.
Notably, per the latest 10K filing, as of May 31, 2019, the company had approximately 136,000 full-time employees, including approximately 18,000 in cloud services and license support operations.
With the new hires, Oracle plans to boost development of new cloud regions and data centers. The company aims to capitalize on growing cloud penetration among enterprises with the aggressive hiring drive.
The latest development reinforces Oracle’s focus on strengthening competitive position in the cloud market, against the leading cloud vendors, including Amazon AMZN and Microsoft MSFT.
Oracle Corporation Price and Consensus
Oracle Corporation price-consensus-chart | Oracle Corporation Quote
Cloud Business Expansion Initiatives Hold Promise
Oracle is making every effort to enhance functionalities of cloud-based database applications. For instance, at OpenWorld 2019, the company had announced a slew of robust software updates on operating system and automated database, including Autonomous Linux, among others.
In the last reported quarter, Oracle added around 500 new Autonomous Database cloud customers. Management anticipates the count to grow more than twofold in fiscal second quarter. The new workforce addition is expected to aid Oracle secure incremental deal wins.
Moreover, Oracle Cloud Infrastructure has secured FedRAMP Authorization, which is expected to aid the company in expanding clientele comprising U.S. Government-based agencies.
Furthermore, the company presently operates 16 Oracle Cloud regions globally and intends to introduce 20 new regions by 2020.
With this recruitment drive, Oracle is well positioned to capitalize on its cloud business expansion initiatives. Per Gartner, the public cloud service market is projected to hit $331.2 billion in 2022 from $182.4 billion in 2018 at a CAGR of 16.1%.
Additionally, increasing spend on public cloud platforms favors the initiatives taken by Oracle to strengthen database and cloud platform.
In fact, per IDC data, global spending on public cloud services and related infrastructure is envisioned to hit $500 billion in 2023, from estimated $229 billion in 2019, at a CAGR of 22.3%. The growth projection reinforces the company’s prospects in the domain.
Oracle has been expanding cloud business strategically and is leaving no stone unturned to catch up with fellow cloud rivals. The company is also investing more in ML and AI capabilities to enhance database.
The latest step to recruit more personnel is a testament to Oracle’s commitment to deliver enhanced cloud services and expand clientele.
However, increasing expenditure on product enhancements is likely to weigh on margin expansion at least in the near term.
Moreover, competition is intensifying in the cloud computing market with IBM IBM, and Google, ramping up efforts in the domain to make the most of the growth prospects. For instance, IBM’s Red Hat acquisition, and Google’s Elastifile acquisition in the recent past, remains noteworthy in this regard.
Oracle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research