Oracle Corp (ORCL - Free Report) is expanding its cloud platform through the acquisition of Dyn Inc., a cloud-based provider of Internet performance and domain name service (DNS). Per TechCrunch, Oracle is rumored to have paid more than $600 million for the company.
Dyn primarily monitors, controls and optimizes Internet applications and cloud services, which helps in faster access and reduces page load times. Recently, the company’s services were impacted by massive distributed denial of service (DDoS) attacks.
According to CrunchBase, Dyn had raised some $88 million in funding from investors like North Bridge Venture Partners and Pamplona Capital Management. PitchBook puts the total funding at more like $100 million. Further, Dyn boasts a strong clientele that includes the likes of Netflix, Twitter and Pfizer among others.
Oracle Continues to Expands Cloud Footprint
The latest deal reflects Oracle’s focus on expanding its cloud computing product portfolio inorganically. The strategy will enable the company to scale up its cloud operations much faster. Through product expansion, Oracle hopes to challenge the dominant position of Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) in both the Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) market.
At this year’s OpenWorld, Oracle unveiled its next generation IaaS offering. The company believes this new product is better, faster, and cheaper than products offered by Amazon and Microsoft. Oracle stated its newest architecture and interoperability with PaaS/SaaS and Open source offerings makes it a credible threat to Amazon Web Services (AWS) and other cloud providers.
Notably, the number of tenants for Oracle Cloud has increased to 60,000 customers at the end of first-quarter 2017 from almost 19,000 at the end of first-quarter 2015.
As noted by Thomas Kurian, President, Product Development, Oracle “Dyn’s immensely scalable and global DNS is a critical core component and a natural extension to our cloud computing platform.”
Amazon Still The Leader
However, we note that Amazon is still the prevailing leader of the IaaS market. Per latest data from Synergy Research Group, AWS still has a 45% share of the worldwide public IaaS market, despite Microsoft and Google having much higher growth rates. Amazon remains more than twice the size of the next three public IaaS providers (Microsoft, Google, IBM) combined.
Notably, Oracle didn’t figure in the top four of the list who controlled well over half of the global market. However, Synergy noted that the company is witnessing strong growth in the PaaS segment.
Zacks Rank & Key Picks
Currently, Oracle carries a Zacks Rank #3 (Hold). Konami (KNMCY - Free Report) is a better-ranked stock with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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