On Monday, June 13, 2022, Oracle reported its fiscal fourth-quarter 2022 earnings, showing significant growth in cloud infrastructure revenue. This blog will look at the numbers and discuss what this means for Oracle Cloud Infrastructure (OCI) moving forward.
Oracle Cloud Infrastructure Is On The Rise
Earlier last week, Oracle announced fiscal Q4 revenues of $11.85 billion, up 10% in constant currency. Respectable numbers, but what really stood out to me was the breakdown of Oracle Infrastructure Cloud Revenue which was up 39% in constant currency. Oracle’s CEO Safra Catz said on the earnings call that she was expecting revenue growth in Oracle’s cloud business to accelerate substantially this coming fiscal year. I looked back at Oracle’s previous quarter results and its Infrastructure Cloud Revenue was up 26% in constant currency at that time, so the trend appears to be positive and accelerating.
Oracle Is Competing With Some Massive Players
Many industry analysts have historically downplayed Oracle’s significance in the Infrastructure as a Service (IaaS) market. This space is currently dominated by Amazon AWS and Microsoft Azure, which collectively own over 50% of the total market. Google GCP comes in a distant third with under 10% and Oracle OCI is currently a distant fourth behind Google at around 2%.
Oracle Cloud Infrastructure Gen 2—Designed for Security
While the big three cloud giants seem to have gotten all the attention, Oracle has been diligently building out its Gen 2 Cloud Infrastructure, an enterprise-focused public cloud that was architected from the ground up specifically to run enterprise applications and databases. The primary design of Gen 2 was focused first and foremost on security, using isolation of customer workloads, and leveraging AI and machine learning to combat any threats.
Keep It Simple
Performance, cost reduction, and simplification were also major design considerations when it rearchitected its cloud in 2019. As Oracle described it, while Gen 1 cloud was focused on serverless and elastic, Gen 2 cloud is centered on being autonomous and secure. Oracle has long been the industry leader in enterprise databases and it has been relentless at building out its autonomous database offerings in OCI, including its autonomous MySQL Heatwave offering announced late last year.
How Much Will All This Security Cost Me?
Oracle designed Gen 2 cloud to leverage automation and AI, making it easier to migrate and manage workloads within OCI. If you run a cost comparison of different workloads running in AWS, Azure, Google Cloud, and Oracle Cloud, Oracle Cloud almost universally comes in at the lowest cost, and in many comparisons, significantly cheaper.
Bottom Line
Oracle is serious about establishing itself as the enterprise cloud provider and is taking concrete steps to reach that goal. The foundation of security and simplicity within OCI is in place and the customer adoption rate for Oracle Cloud appears to be very healthy and accelerating. Time will tell whether cheaper, faster, and more secure resonates with enterprise customers. I suspect it will.