Oracle’s Cloud Sales Rises, but Shares Declines

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Oracle corporation exhibits double-digit expansion in cloud computing, decreases again in the last quarter, further software giant seems to be urging investors to look beyond cloud business. Declination in cloud is increasing concerns related to its transaction and recently it confused several investors with bigger-than-usual focus on latest twist of its older software-licensing business model. Oracle’s share fell in after-hours trading after software giant reported financial third-quarter results, which were slightly below estimated and guided to exhibit even further reducing in its cloud business. Its shares fallen 7.31% after hours. Share have been increased almost 10% so far this year, compared to S&P 500 index that was nearly 1.5% in 2017.

In the third quarter, total cloud-computing business of Oracle collected a revenue of $1.56 billion, raised 32% from previous year. The company estimated the growth of between 19% and 23%. Investors of Oracle were feeling very nervous in the second quarter as the total cloud-business increased by 44%, compared with 51% expansion in first quarter and 58% expansion in fourth quarter. Oracle’s cloud revenue has been curbing pretty violently over last couple of quarters. Analysts are wondering Oracle’s so called ‘bring your own license’ (BYOL) offering was having impact on cloud growth.

Chief Executive at Oracle, Mark Hurd stated that the concept around BYOL is ensure their consumers would not pay twice. Thereby, consumers gets opportunity to buy license and they can bring that license with them to cloud as well as they can bring database license to the cloud. Mr. Hurd further added that consumers can utilize the license as well as buy computer, infrastructure, platform-as-a-service automation and storage. If consumers prefer to buy that way, it will fuel growth to the growth of license their business. It might have an effect on their cloud business in tech and this is the reason to focus on the ecosystem expansion and the ability for them to increase at faster pace.

Oracle’s chairman and co-founder, Larry Ellison further added that people have thought of their license business as their part of traditional on-premise business. He further stated that more and more licenses were being employed in their cloud system. He repeated that licensing is not a legacy business. Number of licenses are going to be used and it is expected more and more number of modern clouds are likely to be utilize such type of licenses not only for Oracle cloud but also for rival clouds as well. Oracle continues to connect between its older legacy software business that depends on corporate computers which is called as it’s so called on-premises business and on the cloud as well as it BYOL concept seems to be a mode to allow consumers do both. However, since Oracle managers have been concentrating on cloud as its large expansion driver for the previous few years, a transformed attention to its licensing business as well as its whole ecosystem expansion is a switch worth observing.

About Rahul Pandita 2 Articles
An experienced writer and editor, Rahul Pandita has written extensively about the impact of policy changes on business and finance. He is a regular contributor to many authoritative sites. When he is not writing, you can find him playing a game of chess.