November 28, 2023

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Oracle clouds never go down, says Larry Ellison • The Register

Oracle clouds never go down, says Larry Ellison • The Register

Oracle execs are all smiles following a stellar showing for their cloud operations in the latest full quarter, and Larry Ellison is obviously feeling a little dizzy, telling the world – or anyone who would listen – that Big Red’s cloud never fails.

Founder and CTO of the Texas-based business, Ellison bottles the Koolaid he asks employees to drink, but last night on a conference call to discuss earning for Q2 ended 30 November, he appeared to have a bellyful himself.

“Our cloud is very secure and extremely reliable,” he told financial analysts. “It doesn’t go down.”

That’s not strictly true. Britain’s heatwave in the summer saw servers hosted by both Google and Oracle drop offline in July, albeit on the back of record breaking temperatures, where the mercury reached 40.3˚C (104.5˚F) in east England.

Ellison was trying to explain why Tokyo Stock Exchange was among the customers to have chosen Oracle’s cloud infrastructure in the past quarter, as did FedEx, Deutsche Bank, and Vodafone as well.

“In fact, my favorite quote from a big phone company in the US was the difference between Oracle’s cloud and the other clouds are simply that Oracle cloud doesn’t go down. I think that’s a very important issue when you have enterprise applications like a stock exchange where you can’t ever go down. If you’re a phone company, the phone system can’t go down.”

For the quarter, Oracle reported total revenue of $12.275 billion, up 18 percent year-on-year, despite the strength of the US dollar. Within this, Cloud Infrastructure was up 53 percent to $1 billion – well off the pace with AWS and Microsoft.

Ellison said his business had signed infrastructure contracts with “multiple customers exceeding $1 billion… that’s ben added to our backlog,” he said. “We now have 22,000 infrastructure customers, we have a total of 55 regions, public regions as well as national security and other types regions. That’s more than AWS or Microsoft or anybody, which may surprise some people.”

For context, AWS reported $20.5 billion in sales during its most recent full quarter ended September 30, and Microsoft’s Intelligent Cloud brought in $20.3 billion.

Unperturbed, he continued to discuss the decision by Nvidia to move AI/ML workloads to Oracle’s cloud in his own inimitable way, “because it turns out we’re really good at that, we’re better than any of the other clouds, which may surprise some people.”

It almost seemed to surprise Larry himself.

If there was a theme to the Q2 numbers, it is that Oracle wants investors to know how successful it is in the cloud, and how nicely Oracle is playing with others following the tie up with Microsoft earlier this year.

“We think the future of cloud is not four-walled gardens, AWS, Microsoft, Google and Oracle. We think those clouds are all going to interconnect. And then customers will pick the most appropriate service for their particular needs and mix and match between the clouds.”

After dedicating a big chunk of his speech to Oracle’s infrastructure clouds, he seemed to remember that the company actually had a wider portfolio.

“In applications – I’ll try to do this quickly – we’re just winning in the back office. We have 22,000 customers in infrastructure and the cloud. We have 11,000 Fusion ERP and HCM customers alone in applications, just Fusion customers. We have 11,000 now. We have probably close to 30,000 NetSuite customers on top of that. So, we have a lot of customers and applications. We’ve been in the applications cloud business for longer than we’ve been in the infrastructure cloud business.”

How did Oracle do elsewhere? Cloud services and license support was up 14 percent to $8.598 billion; software license and on-premises license grew 16 percent to $1.435 billion, hardware was up 11 percent to $850 million, and services jumped 83 percent to $1.392 billion.

Broken down by product more specifically, total cloud revenue was up 43 percent to $3.8 billion, including the $1 billion contribution from infrastructure and $2.8 billion from cloud applications, itself up 40 percent. Fusion Cloud jumped 23 percent to $600 million. NetSuite Cloud was up 25 percent to $600 million. And Cerner contributed $1.5 billion.

Oracle reported an operating profit of a little more than $3 billion versus an operating loss of $824 million a year earlier after results were adversely impacted by the payment of a judgment related to a decade-old dispute surrounding former CEO Mark Hurd’s employment.

So Oracle is clearly making some headway in the cloud, but is still leaps and bounds behind its biggest infrastructure rivals, which is perhaps why Ellison feels the need to overcompensate by saying silly things. ®