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In today’s Cloud Wars Minute, I delve into Oracle’s Q3 results, examining the dynamics of meeting cloud infrastructure demand and the company’s distinctive approach to building smaller data centers globally.
Highlights
00:15 — Oracle just reported its Q3 results. The big picture is its cloud growth was overall 25%, which is flat. That is because the demand surge among customers is simply outstripping supply. The company says it’s not able to meet all the requests and demands from customers for new infrastructure as quickly as either the customers like or certainly it would like.
01:06 — On the one hand, these large cloud infrastructure deals continue to be won by Oracle. But it had been expecting throughout its current fiscal year that its cloud growth would be about 30%. Its cloud growth has been 25% because it just can’t get enough data center capacity up and running. So, we could put that in the category of, “Hey, that’s a good problem.” But the bottom line is, it’s still a problem.
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02:12 — I think with the magnitude of this opportunity, Oracle is moving everything in its power to get those data centers up and running. But the current situation is it just cannot meet the demand. To use the cliché, it’s leaving some money on the table
02:36 — CEO Safra Catz said that the OCI portion of its overall cloud infrastructure business grew 53% for the quarter. So, 52%, one quarter ago for OCI growth, 53% this quarter. Catz said that OCI will remain in what she called hypergrowth for the foreseeable future. There is, with the GenAI revolution, the overall uptake and awareness and demand for AI services, more and more companies finding, “I need to move into the cloud, off of my on-premise systems.”
03:37 — Oracle might be unique in its challenge to build cloud data center capacity. We’ll see if they can catch up on that. I’m sure they’re throwing everything they have at it. In other details here with Oracle’s Q3 results, we saw that their cloud applications business was up 14%.
04:35 — Overall, its Cloud ERP business was up 18% to $800 million for the quarter. So, big jump overall within the cloud business for future commitments, but challenges in the short term to get data capacity built out.
