In past endeavors, Oracle has sold database software to major businesses using licensing agreements. In contrast to companies like IBM, Oracle has seen where it must go in order to thrive in the new high tech world. It is going to the cloud.
In the latter part of 2014, Oracle acquired major cloud companies, such as Datalogix, a data analytics firm. Oracle can both store information and analyze it, making it able to not only provide technology but also a solution.
The Oracle cloud engine has four distinct parts: Software-as-a-Service, Platform-as-a-Service, Infrastructure-as-a-Service and, most recently, Data-as-a-Service. The aim of the Oracle cloud engine us to be able to provide a solution to a company no matter what level it is.
Due to the rise of the cloud and companies such as Amazon that operate outside of the standard of locking customers into contracts, Oracle has had to be become more flexible in order to keep its customers.
Oracles latest financial report exemplifies how well it has been performing in the cloud market. While Wall Street was looking for earnings of 87 cents per share with $10.95 billion in revenue, Oracle reported non-GAAP revenue of 78 cents per share on revenue of $10.7 billion. Oracle blamed this disappointing news on currency fluctuation.
The company has noted a seventeen percent decline in new software licenses year after year. Customers have began to break away from the traditional model and have started to utilize more recently developed cloud technology.
“We sold an astonishing $426 million of new SaaS and PaaS annually recurring cloud subscription revenue in Q4,” CEO Safra Catz wrote. “We expect our rapidly increasing cloud sales to quickly translate into significantly more revenue and profits for Oracle Corporation. For example, SaaS and PaaS revenues grew at a 34% constant currency rate in our just completed Q4, but we expect that revenue growth rate to jump to around 60% in constant currency this new fiscal year.”