Oracle has posted strong Q2 figures with a 44 per cent spike in cloud revenue, but the vendor's shares plunged seven per cent in after-hours trading over a less emphatic future outlook.
For Q2 total revenues were up six per cent to $9.6bn (£7.1bn), compared to Q2 last year. Net income was up 10 per cent to $2.2bn (£1.6bn).
In October, UK and Ireland channel boss Simon Hill told CRN that Oracle's rapid cloud growth has put it in the same league as industry leaders Amazon Web Services, Microsoft and Google.
This was evidenced in its Q2 results where total cloud revenues were up 44 per cent to $1.5bn, but such growth is unlikely to roll into the current quarter.
Angela Eager, research director at analyst TechMarketView, said viewed in isolation Oracle's Q2 numbers looked strong but that there is enough under the surface and in the guidance to leave the market disgruntled.
"Shares fell nearly seven per cent in after-hours trading. The sighs of the year ago quarter, which also sent shares downward, were repeated even though the actual numbers were better in the most recent period."
Eager said despite the strength of cloud revenue in Q2, Oracle's cloud growth is forecast to slow in the current quarter to 21 to 25 per cent, which is one of the factors that unsettled the market.
"The Oracle exec team attributed the slower rate of cloud growth to a pause while customers wait for launch of Oracle's autonomous database early in 2018 and also the new Bring Your Own Licence (BYOL) model which provides licence mobility and is designed to ease the cost of cloud migration," she said.
"There are changes happening within Oracle in terms of where revenue is derived and why, for example there has been more take-up of unlimited licence agreements which could be a precursor to cloud migration and BYOL, and has helped slow the new licence revenue decline from the skyfall of 19 per cent last year to a flat yoy comparative, and $1.3bn revenue."
Eager said Oracle still has a way to go on its cloud journey and further bumps in the road can be expected.
"The BYOL concept is not unique to Oracle but its version is and as commercials and model management are a factor in buyers' cloud migration concerns, initiatives to address them should be viewed favourably. But BYOL and sales of the autonomous database have a lot to live up to in Q3," Eager added.
Larry Ellison, Oracle CTO, said the vendor will soon deliver its autonomous "self-driving" database.
"The new artificially intelligent Oracle database is fully automated and requires no human labour for administration. If a security vulnerability is detected, the database immediately patches itself while running.
"No other system can do anything like this. Best of all, we guarantee the price of running the Oracle Autonomous Database in the Oracle Cloud is less than half the cost of running a database in the Amazon Cloud," claimed Ellison.
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