Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
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Today I dig into the second quarter financial results that Oracle reported on Monday.
00:39 — Oracle for the past six or seven quarters has been the fastest-growing major cloud vendor in the world. It has come back to earth a little bit with a Q2 growth rate for cloud revenue of 25%. But Larry Ellison said demand overall is over the moon. And CEO Safra Catz said demand for the company’s infrastructure and generative artificial intelligence (GenAI) cloud services is expanding at what she called an astronomical rate.
01:09 — Q2 came in with a cloud growth of 25% to $4.8 billion. Within that $4.8 billion, infrastructure growth rate was up 52% to $1.6 billion. Revenue for Oracle cloud applications revenue grew 15% to $3.2 billion. Total Remaining Performance Obligation (RPO) ballooned to $65 billion.
02:17 — Ellison said Oracle’s building 100 new data centers, expanding 66 existing data centers, and turning on 20 new data centers co-located with Microsoft Azure data centers.
03:12 — The growth superstar has clearly shifted over to the infrastructure business, which now makes up one-third of Oracle’s total cloud revenue and has an almost $20 billion run rate. Although Ellison and Catz said demand is astronomical, there’s likely to be some discussion about quarter-to-quarter irregularity or fluctuating growth. Even excluding the acquired Cerner business, Oracle’s cloud business was growing at 30%.
04:25 — I believe this is a short-term aberration and I think we’re going to see growth pick up again next quarter.