Proving that the future is not written and that it’s probably not wise to bet against Larry Ellison, Oracle next week will release fiscal Q1 results showing cloud-revenue growth of more than 40% and displacing Google Cloud as the world’s fastest-growing major cloud provider.
In the fairly recent past, it was still quite fashionable for the ankle-biting know-it-alls to drone on drearily about how Oracle was “late to the cloud” or “doesn’t get the cloud” and was a legacy dinosaur destined for the tar pits.
However, no enterprise-tech company has done a better job than Oracle of navigating the tech industry’s wild technological as well as business-model gyrations over the past few decades. Further, Ellison’s willingness to play the long game and ensure his company was fully prepared for an all-out assault on the cloud — from one end of its massive product portfolio to the other — was interpreted by some as being tardy or, even more foolishly, not understanding what the cloud is all about.
But about next week’s earnings announcement: Oracle will release its Q1 numbers on September 13. As those numbers come out, we’ll see if Oracle delivered on the guidance for cloud revenue provided 3 months ago by CEO Safra Catz, who said overall cloud revenue for Q1 — including Cerner — would be between 44% and 47%.
In Oracle’s June 13 press release announcing its FY22 Q4 results, Catz offered a big-picture view of the company’s cloud prospects, with a particular emphasis on its cloud infrastructure business that Catz said had “entered a hypergrowth phase.”
Here’s the core comment from Catz from that press release:
“These consistent increases in our quarterly revenue growth rate typically have been driven by our market-leading Fusion and NetSuite cloud applications. But this Q4, we also experienced a major increase in demand in our infrastructure cloud business — which grew 39% in constant currency. We believe that this revenue growth spike indicates that our infrastructure business has now entered a hypergrowth phase. Couple a high growth rate in our cloud infrastructure business with the newly acquired Cerner applications business — and Oracle finds itself in a position to deliver stellar revenue growth over the next several quarters.”
So, hypergrowth for Oracle Cloud Infrastructure — which includes the Autonomous Database — plus the ability for Oracle to include Cerner revenue in next week’s FY23 Q1 numbers combine to drive the enthusiastic outlook Catz offered for Oracle’s ability to “deliver stellar revenue growth over the next several quarters.”
A short time after that June 13 press release was issued, Catz, on the fiscal-Q4 earnings call, quantified what that performance might look like on two distinct timelines:
- For Oracle’s full fiscal 2023 ending May 31, 2023, Catz offered guidance of 30% revenue growth for Oracle’s organic cloud business (that is, without Cerner); and
- For the fiscal Q1 ending August 31, 2022, Catz offered guidance of revenue growth for Oracle’s entire cloud business — including Cerner — of 44% to 47%.
Even by the lusty standards of the remarkable companies in the Cloud Wars Top 10, cloud-revenue growth in the mid-40s is extraordinary. In the recent slew of earnings releases for the quarter ended June 30, as well as for the fiscal quarter ended July 31, Google Cloud was the fastest-growing at 36%, followed by SAP at 34% and AWS at 33%.
So, when Oracle’s numbers come out next week, if it’s able to fulfill Catz’s guidance and Ellison’s vision, then Oracle will be, beyond any reasonable doubt or equivocation, the fastest-growing major cloud provider in the world.
It’s a remarkable story of vision and drive, commitment and purpose, and Ellison’s singular ability to chart a course that a few others might be able to see but that almost no one else could complete.
And it’s a lesson for all of us to keep very close at hand: the future is most certainly not written.
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