Oracle Corporation (ORCL - Free Report) is slowly and steadily gaining ground in the cloud market. The company recently won Fanatics as a customer as the latter selected Oracle Customer Experience (“CX”) Cloud suite to enhance business. Fanatics is a leading e-commerce vendor which furnishes sports merchandise.
Oracle Marketing Cloud and Oracle Service Cloud are enabling Fanatics to boost customer engagement by remodeling the purchase journey of the sports fan across varied retail channels.
The joint effort is aimed to bolster the experience of ardent sports fans, which forms the customer base of Fanatics. The unique and innovative "Jersey Assurance" initiative insures that the fan receives a replacement jersey in case the active sportsperson switches teams within 90 days of purchasing it. This initiative respects the fan’s loyalty toward his/her team.
Further, Oracle helped Fanatics customer service team to work in a consolidated manner such that they could efficiently tackle the fans’ queries via new "Athletes Solutions Kiosk" initiative. Fanatics’customer service which comprises coaches (supervisors) and athletes (agents), as a result has been able to furnish a friendly customized “Fan Experience”. The initiative promises consistent engagement across various communication channels.
Additionally, Oracle Marketing Cloud will aid Fanatics track and analyze fan behavior, bolstering the tailored experience by ensuring consistent engagement.
Oracle is gaining ground in its cloud business as is evident from third-quarter fiscal 2018 performance, which benefited from the ongoing cloud-based momentum. Total cloud revenues (16% of total revenue compared with 13% in the year-ago quarter) advanced 32% to $1.57 billion.
Moreover, total cloud and on-premise software revenues increased 8% to $7.98 billion. We believe that the company’s growing cloud market share will continue to drive top-line growth in the foreseeable future.
We also believe that the company’s partnership with e-commerce vendor, Fanatics, will facilitate better management of their sports merchandise on Oracle Marketing Cloud.
Going forward, partnerships with Salesforce, Microsoft and NetSuite along with the recent acquisition of TOA Technologies will provide a significant boost to Oracle’s cloud-computing endeavors.
However, management provided soft outlook for the cloud business, which will remain an overhang on the shares in the near term. Further, higher investments on Infrastructure as a Service ("IaaS") platform will affect gross margin expansion in the near term.
Notably, Oracle has returned 1.6% in the past year, underperforming the industry’s rally of 28.9%.
Zacks Rank & Key Picks
Oracle currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Applied Materials, Inc. (AMAT - Free Report) , Analog Devices, Inc. (ADI - Free Report) and Micron Technology, Inc. (MU - Free Report) . While Applied Materials and Micron sport a Zacks Rank #1 (Strong Buy), Analog carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Materials, Analog Devices, and Micron have a long-term expected EPS growth rate of 13.26%, 12.00%, and 10%, respectively.
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