Oracle is experiencing a transformation akin to that of Amazon, with their cloud business growing significantly while the rest of the company is shrinking. This has resulted in a 3% year-over-year revenue increase for the quarter. Customers are shifting to managed Software as a Service (SaaS) versions of Oracle’s software, impacting the traditional side of the business. However, focus is on the rapidly growing cloud side, particularly Infrastructure as a Service (IaaS), which is positioning Oracle as an AI powerhouse.
Despite a somewhat disappointing quarter, Oracle has seen impressive growth in its order backlog, with significant deals signed with major players in the AI industry. The company projects accelerated growth in its IaaS segment, which is expected to drive double-digit company-wide growth in the coming fiscal year. Additionally, Oracle’s free cash flow margins, while impacted by capital spending, are expected to recover gradually.
Oracle’s emphasis on cloud services is paying off, with demand for its IaaS offerings on the rise. The company is investing heavily in new data centers to meet this demand and has a technologically advanced data center architecture. As the company transitions into primarily a cloud-focused organization in the next few years, riding the wave of AI, Oracle’s transformation is set to accelerate.
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https://seekingalpha.com/article/4701209-oracle-shakes-off-the-dust