Oracle (ORCL - Free Report) is making every effort to strengthen its cloud business. The company is taking the fight to Amazon’s (AMZN - Free Report) AWS and Microsoft’s (MSFT - Free Report) Azure through strategic partnerships.
Oracle, VMware Team Up
Oracle recently announced a partnership with VMware (VMW - Free Report) to allow enterprises capitalize on the interconnected cloud platforms. Per the terms of the deal, VMware Cloud will be integrated with Oracle Cloud to enable the joint enterprise customers to run their enterprise workloads seamlessly on their on-premises datacenters.
This hybrid cloud infrastructure will enable enterprises to integrate applications and transfer workloads between on-campus VMware vSphere-based platforms to Oracle’s Generation 2 Cloud Infrastructure more quickly and reliably.
The hybrid cloud offering will provide more choice and flexibility to customers. The partnership will allow both the companies to compete effectively with local cloud-based software providers.
Oracle, Intel Team Up
This Apart, Oracle also entered into a partnership with Intel to integrate Intel Optane DC Memory into its next-generation Exadata Infrastructure called Oracle Exadata X8M.
Notably, Oracle Cloud platform’s Exadata X8M offers high workload isolation, security and performance functionalities. While, the latest Intel’s 2nd-Generation Xeon Scalable processors, Intel Optane DC memory and storage solutions feature robust AI and memory capabilities.
The customers are increasingly handling workloads either over the cloud, IoT, 4G/5G wireless networks, among other emerging platforms. The implementation of the new offering enables enterprise customers transfer database workloads to autonomous cloud seamlessly in a secure and reliable infrastructure.
Further, the integration will enable organizations to better manage business and help reduce risk. Users can benefit from the enhanced performance, favorable cost, reliable security and innovation offered by these solutions. We believe, the company’s cloud platform will be one of its key revenue generating businesses in the coming days.
Oracle, Deloitte Team Up
Oracle also announced a strategic partnership with Deloitte called ELEVATE. The alliance is aimed at helping customers migrate and mange workloads with Oracle Autonomous Database and Oracle Cloud Infrastructure via Deloitte’s consultancy and technology service abilities.
According to Aaron Millstone, senior vice president of Oracle North America Cloud Consulting."The joint cloud migration and delivery approaches offered by Oracle Consulting and Deloitte will be industry leading. Oracle customers are seeking to transform their enterprises quickly, cost-effectively, and successfully while driving business innovation on Autonomous Database and Oracle Cloud Infrastructure."
We expect the adoption of new database services and latest cloud-based offerings to generate incremental revenues for the company in the days ahead.
Growth Prospects Aplenty
Increasing spending on public cloud platforms and growing clout of digital transformation favor the initiatives taken by Oracle to strengthen database and cloud platform.
Per IDC data, global spending on public cloud services and related infrastructure is envisioned to hit $210 billion in 2019, up 23.8% over 2018. Moreover, per a MarketsandMarkets report, digital transformation market is projected to hit $665 billion by 2023 at a CAGR of 18.1% from $290 billion in 2018.
We believe the company is well poised to capitalize on growth opportunities of its domain driven by its initiatives.
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, and major acquisitions.
Additionally, partnerships with the likes of Accenture and Microsoft are expected to aid Oracle in expanding cloud-base clientele. Moreover, strong demand for the latest autonomous database supported by ML is likely to bolster the top line.
However, Oracle reported not so encouraging first-quarter results, wherein earnings matched estimates while revenues lagged the same. Moreover, the company provided tepid fiscal second-quarter earnings guidance. Lower hardware volumes are anticipated to hurt the top line, consequently keeping margins under pressure. Further, stiff competitionin the cloud market, and integration risks from buyouts remain concerns.
Currently, Oracle caries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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