In today’s Cloud Wars Minute, I challenge Oracle’s skeptics and explain why its aggressive AI infrastructure investments could position the company for extraordinary growth.
Highlights
00:03 — Oracle made a significant announcement last week. It had nothing to do, really, with its technology or partnerships, although those have been remarkable. It had to do with what I have called the monkey on its back, the negative cash flow monkey on its back. And in light of that announcement, I’m recommending to all the Oracle skeptics out there: just breathe.
01:06 — Oracle’s already got the incredible demand in the form of contracted business, almost as much as Microsoft has built up in this cloud and AI backlog. No other company ever in the tech industry, in any other industry, has ever assembled a backlog as big as the one Oracle has.
01:47 — In the next three years, that backlog will convert to $332 billion of revenue. So, this is a company with a huge business, customers lined up, demand is there. It’s building out the capacity to meet that. To do that buildout, it had to borrow some money, but the big thing is the demand is there.
03:29 — Its RPO is already, like I said, $664 billion. The only company with a bigger RPO backlog is Microsoft, which is $677 billion. So, you know, Oracle’s almost on pace with them, bigger than AWS, bigger than Google Cloud. So, at AI World, they had this ambitious product blitz and also partnerships at AI World that are showing that Oracle’s not sitting back.
04:00 — Its whole huge portfolio is now 100% oriented around AI. The partnerships are going to push them into new areas, new capabilities. It’s partnering with Google to use Google TPUs. It had Sam Altman from OpenAI there. It’s infusing OpenAI’s technologies throughout all of Oracle’s software suite. Its database business is picking up, especially with the Oracle AI Database coming out now.
04:29 — I think that you know I understand why some people say, “Huh, nobody’s done this before. What if it doesn’t work?” But, Oracle’s way of doing things is always say, “Hey, nobody’s done this before. We will make it work”, and I’ve got a link in this article to a great presentation at the Oracle Investor Day by the president of Oracle Cloud Infrastructure, Mahesh Tiagarajan, in which he explains how they’re doing that to scale the build out of these data centers.
