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Oracle (ORCL) Alloy & Team IM to Construct Hyperscale Cloud

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Oracle (ORCL - Free Report) Alloy announced that it has been selected by TEAM IM to introduce TEAM Cloud, New Zealand's first locally owned and operated hyperscale cloud, which will be powered by ORCL’s comprehensive cloud infrastructure platform.

Through Alloy, TEAM IM seeks to leverage the cloud's business potential, scalability and performance. Positioned in New Zealand, TEAM Cloud will provide customers added data residency and digital sovereignty advantages, reinforcing resilience with robust disaster recovery features.

TEAM IM will manage the operations of TEAM Cloud, delivering cloud services to clients and retaining control over the customer environment in terms of support and customer operations.

TEAM IM has a demonstrated history of successfully implementing and overseeing mission-critical applications for both enterprise commercial entities and government agencies. The implementation of Alloy will empower TEAM IM to offer more than 100 Oracle Cloud Infrastructure (“OCI") services not only to the government sector but also to its managed service partners and end-user customers.

Oracle Faces Tough Competition in the Cloud Market

According to a report by Statista, in second-quarter 2023, global cloud infrastructure service spending grew by $10 billion compared with the year-ago quarter, bringing total spending to $64.8 billion for the three months ended Jun 30. Looking at the trailing 12 months, the cloud market is now estimated at $247 billion.

Shares of Oracle, which currently carries a Zacks Rank #3 (Hold), have gained 39.7% year to date compared with the Zacks Computer and Technology sector’s rise of 41.4% due to tough competition from giants like Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) and Alphabet’s (GOOGL - Free Report) Google.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the second quarter of 2023, Amazon's global market share in cloud infrastructure decreased to 32%, down from 34% in the previous year. Meanwhile, Microsoft and Google, Amazon's primary competitors, experienced slightly more robust year-over-year growth, leading to an increase of one percentage point in their market shares compared with the year-ago quarter, bringing their market share to 22% and 11%, respectively.

The global cloud infrastructure of Amazon Web Services is considered one of the most secure, extensive and dependable platforms. The company provides more than 200 fully featured services from data centers situated across the globe.

Microsoft helps organizations to achieve their full potential by depending on an integrated and open cloud platform that encompasses six crucial areas, such as security, infrastructure, digital and app innovation, data and artificial intelligence (AI), business applications and modern work.

The Google Cloud Platform is a collection of cloud computing services that offers a range of modular cloud services. These services encompass computing, data storage, data analytics and machine learning, along with a suite of management tools.

Oracle Cloud is a notable participant in the cloud sector, recognized for its focus on providing cloud solutions that seamlessly integrate with ORCL's software and databases.

In a recent announcement, the company revealed a multi-year agreement with Microsoft to bolster the rapid expansion of AI services. Microsoft is leveraging OCI’s AI infrastructure, along with Microsoft Azure AI infrastructure, for the inferencing of AI models. These models are specifically optimized to drive the daily conversational searches on Microsoft Bing. This is expected to boost cloud services and license revenues in the current financial year.

The Zacks Consensus Estimate for ORCL’s fiscal 2024 cloud services and license revenues is pegged at $44.15 billion, indicating year-over-year growth of 25.06%. The Zacks Consensus Estimate for earnings is pegged at a profit of $5.54 per share, indicating year-over-year growth of 8.2%.

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