According to a survey by IDG, IT decision makers’ spending on cloud computing is expected to increase 42% this year. Its Computerworld Forecast Study 2015 found that after security technologies, cloud computing will be the highest growth in enterprise spending for organizations with over 1,000 employees. Another report by Market Research Media expects cloud computing to grow 30% annually over the period 2015 through 2020 to be worth $270 billion by 2020. Clearly, there is no getting away from the Cloud.
Oracle’s (NYSE:ORCL) second quarter revenues grew 3% over the year to $9.6 billion, marginally ahead of the Street’s estimated $9.497 billion. EPS of $0.69 was also ahead of the market’s projected earnings of $0.68 per share.
By segment, revenues from Software and Cloud segment grew 5% to $7.3 billion. Cloud Software-as-a-Service, Platform-as-a-Service, and Infrastructure-as-a-Service revenues grew 45% to $516 million. Hardware Systems revenues increased 1% to $1.3 billion.
For the current quarter, Oracle expects revenues to grow 4%-8% compared with the market’s projections of 5.4%. Oracle projected an EPS of $0.69-$0.74 compared with the Street’s estimates of $0.73.
Oracle’s Cloud Focus
Oracle remains focused on the Cloud. They are confident that they will be able to sell more than $1 billion in new annual cloud software and cloud platform subscriptions during the next fiscal year, thus coming at par with Salesforce.com as this is “about the same total dollar amount of new SaaS and PaaS business as that of cloud market leader Salesforce.com”.
To get to this target, they are increasing focus on the adoption of cloud for mid-sized businesses. They introduced Oracle Accelerate for Oracle Sales Cloud, a solution that enables partners to minimize business downtime for customers migrating to Oracle Sales Cloud. With the new solution, Oracle PartnerNetwork partners can help mid-size customers accelerate transitions from CRM providers, reduce complexity for the migration, and ensure that their data is secure.
They recently extended the features of the Oracle Marketing Cloud by adding capabilities that enable CMOs and marketing teams to deliver marketing campaigns that show a measurable impact on revenue by delivering personalized and contextual customer experiences. The new platform supports integrations across Oracle’s marketing solutions including Oracle Eloqua Marketing Cloud Service and Oracle Responsys Marketing Platform Cloud Service.
Additionally, Oracle opened a new cloud development center in Toronto and has also expanded the business by adding thousands of new salespeople and engineers to expand the segment.
The market is pleased with Oracle’s progress in the Cloud. Their stock is trading at 52-week high levels of $46 with a market capitalization of $203.84 billion. This is the highest the stocks have reached since 2000. It touched a 52-week low of $35.44 in February this year.