Oracle CTO Larry Ellison said the company will soon deliver the world’s first autonomous database. The new artificially intelligent Oracle database is fully automated and requires no human labor for administration.
“We guarantee the price of running the Oracle Autonomous Database in the Oracle Cloud is less than half the cost of running a database in the Amazon Cloud,” Larry Ellison said.
TBR said benefits of Oracle’s fully-autonomous database will drive adoption both in license and subscription offerings in the latter half of 2018.
Oracle posted revenues of $9.6 billion (+6 percent) in Q2 fiscal 2018 lifted by 9 percent increase in Cloud plus on-premise software revenues of $7.8 billion.
Oracle has generated revenue of $1.1 billion (+55 percent) from Cloud Software as a Service (SaaS), $396 million (+21 percent) from Cloud Platform as a Service (PaaS) plus Infrastructure as a Service (IaaS) and $1.5 billion (+44 percent) from total Cloud.
Oracle posted operating income of $3.1 billion (+1 percent) with operating margin of 32 percent. Net income of Oracle rose 10 percent to $2.2 billion.
Oracle CEO Safra Catz said: “Our success in the quarter was based on the increasing scale and the gathering momentum in our cloud business.”
Oracle said its Fusion ERP and Fusion HCM SaaS applications suite revenues grew 65 percent in the second quarter. Oracle is the market leader in enterprise back-office SaaS applications with over 5,000 Fusion customers.
Oracle CEO Mark Hurd said: “We expect to extend our lead by selling around $2 billion in new enterprise SaaS application cloud subscriptions over the coming four quarters. That’s more new SaaS sales than any of our competitors.”
Oracle’s earnings delivered 55 percent growth in Cloud SaaS revenues, nearing $4.5 billion in annual run rate, particularly driven by growth in ERP and HCM uptake.
TBR Analyst Meaghan McGrath said Cloud PaaS and IaaS revenue struggled to deliver year-to-year growth, as Oracle’s now de-emphasized hosting business declines in the wake of new cloud focus. Oracle’s license and maintenance “on-premises” revenues, on the other hand, saw accelerated growth as customers begin to understand and embrace BYOL as a cost-effective means to leverage license investments in their transition to cloud.
Oracle expects this improvement in license and maintenance on the platform and infrastructure side to improve notably as the autonomous database becomes available and customers purchase supporting technologies around database licenses and host them on Oracle’s Cloud Infrastructure.
TBR expects SaaS growth to weaken in 2018, as the acquisition of NetSuite becomes incorporated in year-ago compares, but shows promise for reaccelerated growth as features of Release 13 resonate with customers and as Oracle’s Adaptive Intelligence capabilities become deciding factors for adoption.