In today’s Cloud Wars Minute, I share my thoughts on the ramifications of Oracle’s Q3 cloud revenue milestone.
Highlights
00:25 — Oracle’s unique technology, range, and go-to-market practices and the ways in which it offers distributed cloud are really differentiating it, often forcing the other big hyperscalers to react to what it is doing.
01:27 — In the recent earnings call, CEO Safra Catz said it has crossed over the point now, where cloud revenue is bigger than its raditional license support revenue. $5.1 billion revenue from the cloud; $4.9 billion from license support. It’s a clear indication that when Oracle talks about being a cloud company and cloud-first, it’s not just trying to convince people: The numbers show it.
02:26 — Oracle’s done the work with development to rewrite all of its software for the cloud. It’s got a very dynamic new cloud infrastructure business growing at a very high rate. It has booming new AI business. Oracle Cloud Infrastructure (OCI) was up 52% to about $1.7 billion. Its AI cloud services business, part of OCI, has been growing incredibly fast as well.
03:56 — Cloud is rapidly becoming a bigger and bigger percentage of the other three so-called legacy vendors’ overall businesses. With Microsoft, it’s about 53.3%. SAP is at about 44%. IBM, I had to do a little guesstimating there. It’s somewhere in the range of 28%-29%.
04:27 — Oracle is close to 39%. And with its cloud business growing as rapidly as it is, we’ll quickly, I think, see that number approach half of Oracle’s total revenue. So we see these big, traditional tech companies have all very elegantly — if not perfectly smoothly — have come around here, they’re doing phenomenally well.
05:06 — This means lots more choices for customers, lots of competition, and in the Cloud Wars, as we say, the customers always win.
