Database stalwart Oracle Corp., which would very much like to be a major player in the public-cloud market, reported sharply increased revenue from platform as a service (PaaS) and software as a service (SaaS) for its 2QFY17 ended Nov. 30, though revenue was minimal from the infrastructure as a service (IaaS) that undergirds cloud leaders Amazon Web Services and Microsoft Azure.
The numbers show that Oracle is selling more of its database software as a service, rather than as licensed installations, but that it’s only slowly making inroads into IaaS. IaaS accounted for a scant $175 million in revenue, or 2 percent of the quarter’s total $9 billion. That was flat with the year-ago period. SaaS and PaaS revenue combined was $878 million, up from $484 million last year.
Quarterly net income was $2 billion, or 48 cents per diluted share, compared with $2.2 billion, or 51 cents per diluted share, in the same quarter last year.
“Historically, I’ve measured Oracle’s performance by comparing our technology and market share to SAP in applications and to IBM in infrastructure,” said chairman and CTO Larry Ellison in a conference call after the release of earnings. “That changed when we moved to the cloud. In the cloud, we measure Oracle against Salesforce.com in applications and against Amazon Web Services in infrastructure and database.”
He continued, “We are growing our cloud business much faster than Salesforce.com, and we can beat them to the $10-billion mark, but it’s gonna be close. The Oracle database has a huge technical and market-share lead over the AWS databases . . . but much more importantly, the Oracle cloud infrastructure as a service runs the Oracle database much faster, more reliably and at a significantly lower cost than the Oracle database running on Amazon. We’re well on our way to being number one in both cloud applications and cloud database, and we’re doing it with very little or no compromise to our earnings and our cash flow.”
The famously outspoken Ellison has declared that “Amazon’s lead is over” and that Oracle is “aggressively moving into infrastructure.”
Oracle shares were down 2 cents, or 0.05 percent, at $40.86 in after-hours trading.
Meanwhile, AWS is not standing still. Oracle was the only vendor singled out for derision by AWS CEO Andy Jassy at re:Invent in Las Vegas last month. Without mentioning Oracle by name, Jassy said, “Commercial-grade databases are proprietary, expensive and require vendor lock-in.” He decried “hand-waving and bombast” as images of Oracle chairman Larry Ellison popped briefly onto the huge screens behind him.
At the conference, AWS announced it is adding PostgreSQL support to its Aurora database, making it easier to move an Oracle database to AWS. And in October, AWS announced its database-migration service, which helps companies move data out of Oracle and into any number of competitors, including Aurora. That service also lets organizations keep their Oracle database but move it from their own data center to AWS.