Oracle Corporation ORCL recently announced its plans to open a new datacenter in São Paulo, Brazil at its technology conference – Oracle OpenWorld Latin America 2015.
This modern facility will allow regional companies to harness cloud computing to enhance their IT infrastructures and thereby boost their productivity levels.
For Oracle, the new data center is a great opportunity to strengthen its foot hold in Latin America. The new center will allow the company to tap the growing demand for comprehensive cloud solutions while also getting customers accustomed to using the company’s Cloud Software as a Service (SaaS) product portfolio.
Oracle has deployed its Oracle Engineered Systems to design the system environment at the Latin America data center, thus increasing the performance, stability and security of its cloud services.
Latin America is a promising market for cloud-based companies like Oracle. According to research firm, Pyramid Research, enterprise cloud service revenues in Latin America are likely to increase to $21.5 billion by 2019 compared with $6.5 billion in 2014.
Oracle has been making consistent efforts to develop its SaaS offerings. For quite some time, the company has been investing in developing global cloud infrastructure. This data center will be the company’s 19th data center across the globe. In Apr 2015, Oracle had announced its plans to open a new cloud data center in Japan.
The company now designs solutions that can be integrated seamlessly with social and mobile platforms while enhancing the customer experience using insights from advanced analytical capabilities.
Recently, the company expanded its cloud offerings to include online storage for customers to allow them to run their applications in the cloud itself. This addition brings Oracle at par with the likes of Amazon.com Inc. AMZN.
Despite soft results in the fourth quarter of fiscal 2015, the company has been seeing solid growth in its cloud business. Cloud SaaS and PaaS revenues increased 29% in the quarter to $416 million while bookings and billings for the same rose 200% and 70% respectively.
We believe that the speedy adoption of cloud suites will drive incremental top-line growth going forward. However, Oracle’s continuing transition from licensing, where revenues are recognized upfront, to a cloud subscription model, where it is recognized over the years, will negatively impact the top line in the near term.
Currently, Oracle has a Zacks Rank #4 (Sell). Advent Software, Inc. ADVS and Aspen Technology, Inc. AZPN are better-ranked stocks in the space, each sporting a Zacks Rank #1 (Strong Buy)
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment