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Oracle's (ORCL) Cloud Service to Aid Xactly Boost Business

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Oracle (ORCL - Free Report) bagged a multi-year deal from software solutions provider Xactly to migrate the latter’s Incent software-as-a-service (SaaS) suite to Oracle Cloud Infrastructure (OCI) for enhancing customer experience and improving operational efficiency.

By migrating to OCI, Xactly clientele will gain from the in-built AI and ML technologies that will ramp up executions and generate insights in real time.
Also, Oracle and Xactly have collaborated to sell Incent Suite SaaS solutions together via Oracle Cloud Marketplace platform. It will also be incorporated into Oracle’s Cloud CX APIs. 

Notably, San Jose, CA-based, Xactly is a prominent SaaS company that offers cloud-based enterprise sales solutions. The company’s Incent suite aids enterprises in aligning sales behaviors with company goals. Moreover, it helps to automate incentive compensation programs to wipe out payout inaccuracies and increase visibility into commissions.

Xactly’s deal is a notable win for Oracle as it reflects on strength of the company’s cloud offerings and is expected to enhance the company’s cloud revenues in the coming quarters.

Rapid Adoption of Cloud-Based Solutions Augurs Well

Oracle is gaining ground in the cloud services market, as enterprises rapidly transition to the cloud, triggered by coronavirus-led work-from-home wave.

Oracle is witnessing rapid growth in adoption of Cloud HCM, which is being purchased as part of the company’s ERP cloud application suite.

Management remains optimistic on latest ERP deal wins from companies including ICON Health & Fitness, Iron Mountain, DHL Supply Chain, and CTB, a Berkshire Hathaway Company. Oracle also bagged HCM deals from Albertsons, Randstad India and skeyes.

Furthermore, Japan-based car marker Nissan migrated its high-performance computing (HPC) workloads to OCI in August 2020. Prior to that, companies like 8x8 (EGHT - Free Report) and Zoom Video Communications (ZM - Free Report) selected OCI services to enhance video meeting solutions in a secure manner amid explosive growth in user base.

Also, the next-generation autonomous database launched by Oracle, supported by ML, is gaining significant traction. Oracle added new customers that led to a 64% year-over-year growth in Autonomous database consumption revenue for the first quarter of fiscal 2021.

Notably, autonomous database in Gen 2 public cloud infrastructure is also witnessing rapid uptake. Annualized consumption revenue rate for Gen 2 OCI services skyrocketed 130% for the first quarter.

Last month, Oracle had also unveiled Oracle Cloud VMware Solution, which will assist businesses to effortlessly move their VMware workloads to OCI.

To support its cloud initiative, Oracle is also expanding its data center footprint. The company has 26 cloud regions currently and it plans to build 10 additional cloud regions over the next nine months. 

This ongoing momentum is anticipated to aid Oracle fortify its footprint in the public cloud services market. Per a Gartner Report, spending on public cloud is expected to grow 6.3% to $257.9 billion while SaaS, and platform-as-a-service (PaaS) growth rates are projected to be 2.6% and 16%, respectively, in 2020.

By 2022, public cloud services market, per Gartner data, is projected to hit $364.1 billion from $242.7 billion in 2019.

Headwinds Remain

Oracle has to make investments toward strengthening its cloud offerings with advanced capabilities to capture a larger market share and thwart stiff competition in the cloud computing market from the likes of Amazon Web Services (AWS), Microsoft’s (MSFT - Free Report) Azure and Google Cloud. This is likely to put pressure on margins, at least in the near term.

Per Synergy Research Group data, Oracle’s market share was trailing behind AWS, Azure, Google Cloud, Alibaba, IBM, Salesforce and Tencent in the second quarter of 2020.

Also, coronavirus crisis-triggered sluggish spending across small and medium businesses owing to restricted economic activity, and weak job market are likely to exert pressure on adoption of Oracle’s cloud offerings and HCM application solutions in the foreseeable future.

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