Oracle’s (ORCL) Cloud Platform, which includes its Database, Java, and Oracle Fusion Middleware, is gaining popularity as a reliable source of various SMAC (social, mobile, analytics and cloud) requirements. We believe, in the coming days, the company’s cloud platform will be one of its key revenue generating businesses.
Oracle’s Cloud Platform helps enterprises extend SaaS applications and migrate from existing on-premises applications to the cloud. The company’s cloud solution provides a broad portfolio of public cloud services including software-as-a-service (SaaS), PaaS, DaaS and IaaS.
Oracle is gaining ground in its cloud business as is evident from its first-quarter performance, wherein it fared better than competitor salesforce.com, inc. (CRM). We believe that the company’s partnership with cloud content management service provider, Box, will facilitate users to better manage their digital assets on Oracle Marketing Cloud.
Going forward, we believe that the partnerships with Salesforce, Microsoft (MSFT) and NetSuite along with the recent acquisition of TOA Technologies will provide a significant boost to Oracle’s cloud-computing endeavors. The SaaS segment should record strong growth over the next few years as enterprises increasingly transition to cloud. According to market reports, the SaaS market will grow steadily, with revenues touching $27.94 billion by 2015, up from $13.46 billion in 2011.
To tap this opportunity, Oracle introduced six Cloud Platform services in the last quarter that will not only help personalize SaaS applications, which are currently in demand, but also support easy migration of on-premise applications to Oracle Cloud. Overall, we believe that the company’s new commercial offerings further expand the cloud portfolio. Moreover, the cloud services offering has opened up a new source of recurring revenues (subscriptions), which is expected to improve visibility.
Further, the recent acquisition of marketing data analytics company, Datalogix, will primarily boost Oracle's digital marketing cloud business with the addition of enormous amounts of data on consumer spending patterns.
The Datalogix acquisition represents another milestone for Oracle to beef up its market share in digital marketing data as a service platform. Datalogix boasts over 650 customers, 1,500 data partners that track $2 trillion in consumer spending. In addition, its top notch clients including Ford, PepsiCo, Kraft Foods, Unilever and Lenovo and key digital media publishers such as Facebook (FB), Twitter and Google make it a valuable deal for Oracle.
Oracle currently has a Zacks Rank #4 (Sell).
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