Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder Bob Evans. Each episode provides insights and perspectives around the “reimagination machine” that is the Cloud.
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In this Cloud Wars Minute, Bob Evans details how accelerated customer demand for Oracle Cloud Infrastructure (OCI) has led the company to double its CapEx investments.
Highlights
00:40 — Oracle is in the midst of a $10 billion data-center buildout in 2023. Bob notes that this goes back to the company’s last earnings call, during which CEO Safra Catz revealed that roughly, in the calendar year 2022, the company spent about $6.7 billion on CapEx.
01:18 — Throughout 2022, “it wasn’t a straight-line investment,” says Bob. During the first three quarters of 2022, Oracle spent $4.3 billion. In the last quarter of 2022, it spent $2.4 billion. Catz noted that the accelerated demand, including triple-digit bookings growth for Oracle Cloud Infrastructure (OCI) means that the company will keep this $2.4 billion CapEx pace up for at least the next few quarters.
01:53 — One measure of this is that the accelerated demand has raised Oracle’s remaining performance obligation (RPO) balance by 68% to over $61 billion.
02:18 — All of this information was presented late last year in the company’s earnings call. Bob says this “50% jump” in the data-center buildout caught his attention. In a few weeks, Oracle’s fiscal Q3 ends on Feb. 28. In mid-March, the company will announce its quarterly earnings.
03:09 — As of late last year, Oracle’s intentions are to boost its CapEx by 50% to meet data-center capacity and accelerated customer demands. Bob suggests that this will force the three original hyperscalers — Microsoft, Amazon, and Google Cloud — to continue to get better.
