While Oracle chairman Larry Ellison said cloud-infrastructure demand is otherworldly and CEO Safra Catz said infrastructure and generative artificial intelligence (GenAI) services are “increasing at an astronomical rate,” the company’s fiscal-Q2 cloud growth rate of 25% descended toward Earth after multiple quarters of 30% or more.
With Q2 cloud revenue reaching $4.8 billion, Oracle remains one of the world’s fastest-growing cloud vendors but, at least for now, is no longer the runaway leader among the Cloud Wars Top 10 hottest companies.
Some Q2 details:
- cloud infrastructure revenue up 52% to $1.6 billion;
- cloud apps revenue up 15% to $3.2 billion;
- total cloud revenue up 25% to $4.8 billion;
- total RPO (remaining performance obligations) exceed $65 billion; and
- CEO Safra Catz said of the results, “Business is good and getting better.”
Chairman Larry Ellison used the Q2-results press announcement to showcase the company’s plans for an extremely ambitious buildout of its global network of cloud data centers to keep up with customer demand that he described as “over the moon.” Some key details from Ellison’s comments reveal that Oracle is:
- building 100 new cloud data centers;
- expanding 66 of its existing cloud data centers; and
- turning on 20 new Oracle cloud data centers that are co-located with Microsoft Azure facilities.
Final Thought
While 25% growth is nothing to sneeze at, Oracle has in recent quarters been bullish in its projections that its cloud business could continue to grow in the range of 30% exclusive of contributions from the Cerner acquisition.
In the press release about the results, neither Catz nor Ellison said anything about the slowdown in growth rates but instead, as outlined above, focused their comments on ongoing momentum, future prospects, and the company’s willingness to invest aggressively in cloud data centers to keep up with future demand.
No doubt each will have much more to say in the ensuing earnings call with financial analysts, and I’ll be sure to dig into that later this week.
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