Oracle cloud business hits $5B mark, Larry Ellison comes out swinging

Dive Brief:

Oracle Corporation announced fiscal 2017 Q3 results on Wednesday, reporting its total cloud and on-premise software revenues were $7.4 billion year over year, up 4% in U.S. dollars and up 5% in constant currency.
Cloud software as a service (SaaS) and platform as a service (PaaS) revenues alone were $1 billion, up 73% in U.S. dollars and up 74% in constant currency. In a statement, Oracle CEO Safra Catz attributed the "hyper-growth" in the cloud to the company bringing its SaaS and PaaS business to scale, growing 85% in Q3 year over year, which helped the total cloud business reach $5 billion.
Oracle Chairman and CTO, Larry Ellison, took the positive news as another opportunity to challenge Amazon Web Services. "Our new Gen2 IaaS is both faster and lower cost than Amazon Web Services. And now our biggest customers can run their largest and most demanding Oracle database workloads in the Oracle Cloud — something that is absolutely impossible to do in the Amazon Cloud,” said Ellison in a statement.

Dive Insight:

Oracle has been doubling down on its cloud efforts, looking to catch up with market leaders like AWS, Microsoft, Google and IBM. And it appears it’s making a dent. For the quarter ending Nov. 30, 2016, Oracle reported revenue of $878 million from SaaS and PaaS. Since that time, Oracle managed to push that up 73%.

Last fall, Ellison announced plans to heavily challenge AWS in the Infrastructure as a Service space during a keynote address at OpenWorld. "Amazon's lead is over," Ellison said. "Amazon is going to have serious competition going forward."

In January, Oracle said plans to launch three new cloud services regions — in Reston, Virginia; London, UK; and Turkey — in the next six months, doubling the regional presence of its cloud platform over the last two years.

Even with the increased number of regions, Oracle has a long way to go in convincing customers to rely on its cloud over other, more dominant service providers. A lot of its market appeal will stem from customers already relying on Oracle products, making for a more seamless transition to Oracle's hosted platform.