Accenture plc (ACN - Free Report) recently unveiled Accenture Cloud Suite for Oracle Corp. (ORCL - Free Report) to make cloud-based solutions available through Accenture Oracle Business Group. This alliance will further strengthen the longstanding partnership. However, financial aspects of the deal were not disclosed. The move is part of the company’s strategy for an improved and innovative cloud ecosystem.
Accenture’s customers will now be able to manage and access Oracle’s Cloud services using Accenture Cloud Suite, which is highly secure, has dedicated connectivity, high reliability and offers an enhanced end-user experience. With this launch,Accenture will offer solutions that will help to bridge the gap between cloud-to-cloud, cloud-to-on-premises, and cloud-to-custom architectures and solutions.
Formed in April2015, Accenture Oracle Business Group has been developed on Oracle’s Public Cloud Platform. It helps enterprises extend software-as-a-service (SaaS), Infrastructure-as-a-Service (IaaS) and platform-as-a-service (PaaS) applications as well as migrate from existing on-premise applications to the cloud. The launch of this Cloud Suite will enable users to better manage digital assets on Oracle Public Cloud and help reduce risk.
The partnership not only provides a secure connection for Oracle’s business customers but also enables Accenture’s customers to access the services of a major cloud provider. Together, these companies can help global enterprise consumers accelerate their journey to the cloud. Users can benefit from the enhanced performance, favorable cost, reliable security and innovation offered by the partnership.
The launch of Accenture Cloud Suite reflects its constant commitment to help clients achieve value through Oracle’s cloud solutions. This will solidify Accenture’s position as the first managed services provider for Oracle’s cloud portfolio and will allow both the companies to compete effectively with local cloud-based software providers.
Accenture currently has over 54,000 skilled Oracle consultants worldwide. Moreover, as Oracle is one of the largest providers of cloud-based applications and software, it becomes necessary for Accenture to enhancecapabilities in delivering Oracle-based business solutions.
The overall growth expectation for the public cloud computing services market is very bullish. According to Gartner, the worldwide public cloud services market was projected to grow 18% through 2016 to $246.8 billion in 2017. This figure will increase to $383.3 billion by 2020.
Infrastructure-as-a-Service (IaaS) is projected to be the highest growth service driven by improvement in platform-as-a-service (PaaS) along with themassive adoption of artificial intelligence (AI), analytics and the Internet of Things (IoT). IaaS is projected to grow from $25.29 billion in 2016 to $71.55 billion in 2020.
The exponential growth in the amount of data, complexity of data formats and the need to scale resources at regular intervals compelled several companies to turn to cloud computing vendors. Consequently, considering the growing need for cloud-based applications and software, we expect Accenture’s investments in this space to boost long-term growth.
Accenture stock has gained 15.6% year to date, outperforming the 13.9% rally of the industry it belongs to.
The company’s long-term prospects look promising, driven by sustained focus on innovative product roll outs, consistent investments in enhancing digital and marketing capabilities, along with major acquisitions. Additionally, we believe regular acquisitions will significantly contribute to the revenue stream.
Currently, Accenture caries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader technology space are Applied Materials, Inc. (AMAT - Free Report) and NVIDIA Corporation (NVDA - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected EPS growth rates for Applied Materials and NVIDIA are 17.1% and 10.3%, respectively.
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