Business technology major Oracle Corporation reported $10.89 billion (+3 percent) revenue in fiscal Q4 2017.
Oracle generated SaaS (Software as a Service) cloud revenue of $964 million (+67 percent) in Q4 ended on May 31, 2017.
Oracle’s Q4 revenue from Cloud PaaS (Platform as a Service) plus IaaS (Infrastructure as a Service) was $397 million (+40 percent).
Total cloud revenues of Oracle rose 58 percent to $1.4 billion in the fourth quarter.
Cloud plus on-premise software revenues of Oracle increased 5 percent to $8.9 billion.
Oracle CEO Safra Catz said: “We continue to experience rapid adoption of the Oracle Cloud led by the 75 percent growth in our SaaS business in Q4.”
Oracle CEO Mark Hurd said the technology company sold $855 million of annually recurring cloud revenue (ARR) in Q4, putting over our $2 billion ARR bookings goal for fiscal year 2017.
Oracle also delivered over $1 billion in quarterly SaaS revenue for the first time. Oracle expects to sell more than $2 billion in new cloud ARR in fiscal year 2018.
US-based telecom major AT&T has agreed to migrate existing Oracle databases containing petabytes of data plus their associated applications workloads to the Oracle Cloud.
Oracle Chairman Larry Ellison said the company expects more of its big enterprise customers will migrate their Oracle databases and database applications to the Oracle Cloud. “These large-scale migrations will dramatically increase the size of both our PaaS and IaaS cloud businesses.”
Meaghan McGrath, analyst at Technology Business Review, said Oracle’s SaaS business scaled to $964 million in the quarter, and has accelerated year-to-year growth from 50 percent to 67 percent over the last four quarters with the support of the NetSuite acquisition.
Supplemented by inorganic improvements, Oracle’s SaaS gross margin improved more than 10 percentage points over the past four quarters, but has consistently been outperformed by PaaS gross margin, indicating that PaaS is the most profitable of the three cloud segments.
Oracle’s collective applications business has grown single-digits amid on-premises revenue declines, while the platform and infrastructure business has seen both lower collective growth and better on-premises performance.
Oracle is near the relative beginning of its long transition, with both the PaaS and IaaS businesses yet to reach scale, and even the SaaS business arguably immature. SaaS business is scaling effectively in concert with the PaaS business.
Large enterprise commitment to move Oracle databases to the cloud will assist Oracle to scale its cloud segments beyond their current 12 percent of corporate revenue, as both its on-premises applications and database foundation erode.
