Market analysts view Big Red as having turned a corner on its transition from legacy software to the cloud.
Oracle has $200bn reasons to celebrate following a new market valuation of the company.
Following the company’s Q4 2017 financial results, Oracle’s market valuation moved above $200bn for the first time since the end of the late 1990’s.
Big Red reported revenues up by 3% to $10.9bn from $10.6bn from the year ago period. Net income grew by 15% to $3.2bn, up from $2.8bn.
The big boost to the company’s pocket came from cloud sales, with the company increased revenue by 58% from a year ago to $1.36bn. However, hardware revenue fell by 13% to $1.1bn and on-premises software revenue dropped 1% to $7.52bn.
Full year results saw revenue hit $37.7bn, up 2%. Net income grew 5% to $9.3bn and cloud revenue reached $4.6bn, up 60% and now accounts for 12% of Oracle’s full-year revenue.
There are still big declines across on-prem software revenue, down 2% to $25.6bn, hardware down 11% to $4.15bn, and services revenue which fell 9% to $3.36bn.
Despite these falling figures from the company’s traditional revenue base, it’s the cloud growth that has really helped to turn things around for Big Red.
In a call with analysts Oracle co-CEO Safra Katz said: “The cloud has become our predominant growth vehicle.
“This not a one-year phenomena, what you should see is we will have less drag from the transition and the base will continue to grow.”
Larry Ellison, co-founder and chairman of Oracle said that the company was well on its way to passing Salesforce.com, which is the largest seller of cloud software, given that Oracle is growing its cloud revenue at 58% while Salesforce grew its revenue at 24%.
However, Salesforce.com is a much larger cloud software provider and it is harder to grow something large than something small.
Oracle may have impressed Wall Street with its cloud growth but a recent report from Gartner raised some issues regarding the company’s offering.
Gartner said: “Customers should be cautious of high-pressure sales tactics, understand the reality behind the marketing and not feel obliged to evaluate the offering at this stage of its maturity. Gartner strongly encourages prospective customers to speak with references.”
Despite this, Big Red’s Gen 2 offering is shaping up to be a much more promising offering, in part due to being built by a highly experienced team that has come from other hyperscale cloud providers.