Oracle (ORCL), Microsoft Form Multi-Cloud in South Africa
Oracle ORCL recently announced the opening of a new Oracle Interconnect for Microsoft MSFT Azure location in Johannesburg, South Africa. The new location will provide direct connectivity between the Oracle Cloud Johannesburg region and the Microsoft Azure South Africa North region.
With the latest Oracle Interconnect for Microsoft Azure, organizations across Africa can now use the Oracle Database Service for Microsoft Azure.
This Oracle service builds upon the core capabilities of Oracle Interconnect for Microsoft Azure and enables customers to easily integrate workloads on Azure with Oracle Database service on Oracle Cloud Infrastructure (OCI).
In July, Oracle announced the general availability of Oracle Database Service for Microsoft Azure. With this new offering, Microsoft Azure customers can easily provision, access and monitor enterprise-grade Oracle Database service in OCI with a familiar experience. Users can migrate or build new applications on Azure and then connect to the high-performance, high-availability, managed Oracle Database service such as Autonomous Database running on OCI.
Oracle Corporation Price and Consensus
Oracle Corporation price-consensus-chart | Oracle Corporation Quote
Oracle’s Longstanding Partnership With Microsoft: A Key Catalyst
Since 2019, Oracle and Microsoft have partnered to deliver 12 Oracle Interconnect for Microsoft Azure locations around the world, including San Jose, Phoenix, Ashburn, Toronto, Vinhedo, Amsterdam, London, Frankfurt, Tokyo, Seoul, Singapore, and Johannesburg. These locations offer customers multi-cloud capabilities to run their business-critical applications.
According to Walker, the total spending on public cloud services in South Africa is forecast to witness a five-year CAGR of 24.6% from 2021 to 2026.
The announcement comes after Oracle opened its Johannesburg-based data center in January — its first cloud region on the African continent.
The cloud region allows organizations looking to build high-performing, secure applications to meet data sovereignty requirements and devise disaster recovery plans to cater to the demand for enterprise cloud services across the continent.
Increasing Costs & Competition to Hurt Balance Sheet
Acquisitions have played an important part in Oracle’s growth trajectory over the years. Being a late entrant in the cloud computing space, the company is trying to build its position through aggressive acquisitions. The company is making significant investments in these acquisitions in order to catch up with Amazon’s AMZN Amazon Web Services, Microsoft Azure, Alphabet-owned GOOGL Cloud, salesforce and IBM.
Amazon continues to dominate the global cloud computing space on the back of an increasing number of availability zones and regions served by Amazon Web Services as it recently opened one in Bangkok, Thailand.
Alphabet’s Google Cloud services have been growing investments in infrastructure, security, data management, analytics and AI. It is expanding its footprint worldwide as the company is about to open a data center in Japan in 2023, marking its third such establishment in Asia.
As the SaaS market is getting overcrowded, we believe that all acquisitions may not perform as per Oracle’s expectations, which will eventually hurt this Zacks Rank #4 (Sell) company’s profitability.
Large acquisitions can negatively impact the company’s balance sheet in the form of a high level of goodwill and intangible assets, which totaled $74.1 billion as of Aug 31, 2022, up from $45.5 billion in the previous quarter.
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