ERP Cloud Could Be The Next Big Thing For Oracle Corporation (NYSE:ORCL)
Oracle Corporation (NYSE:ORCL) has ambitious growth plan in the cloud market, especially around enterprise resource planning (ERP). The company claims that its positive progress in cloud can clearly be seen from the fact that it is hiring when competitors are retrenching.
Oracle Corporation (NYSE:ORCL)’s managing director of Australia and New Zealand, Tim Ebbeck, believes that ERP cloud will likely be a big area for Oracle in the near future. The company already boasts more than 1,000 ERP cloud customers globally, and continues to bolster its sales team for more wins.
Cloud growth catalysts
Ebbeck noted that customers that have already adopted some cloud services from Oracle and would likely come back for ERP cloud. The other area of potential growth is among the existing on-premise install base. Ebbeck stated that ERP cloud simplifies the IT environments and eliminates the usually time-consuming and expensive on-premise software upgrades.
Oracle Corporation (NYSE:ORCL) joined the public cloud market in 2012 and the company’s current offerings include SaaS, PaaS and IaaS. More recently, the company has added DaaS, which means data as a service.
Progress on the cloud front
The company is already making exciting progress in the public cloud front. In 4Q2015, the company reported 34% (cc) jump in SaaS and PaaS revenues. In the current fiscal year, Oracle is looking to book 60% jump in revenue in the segments.
However, growth on the cloud front is coming at the expense of Oracle’s legacy on-premise businesses. In 4Q, for instance, the company recorded 17% decline in software license revenue and 2% drop in hardware systems revenue.
On-premise business is here to stay
While Oracle is seeing slowdown in its legacy businesses, Ebbeck said that on-premise business will not completely go away. However, he acknowledges that continued shift to the cloud will result in more gains for Oracle as the company moves to more predictable subscription revenue basis.
The difference between Oracle and competitor
That Oracle Corporation (NYSE:ORCL) continues to hire to beef up its cloud team is seen as a testament to the fact the company is growing in the public cloud space. Ebbeck noted that while Oracle is growing and hiring new cloud staff, competitors like Microsoft Corporation (NASDAQ:MSFT) are laying off workers. Microsoft plans to do away with 7,800 positions. In contrast, Oracle hired about 1,000 new employees to bolster its cloud sales force.
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