Databases, data center and AI, oh my! Oracle cloud revenue up 30%

  • Oracle’s overall revenue rose 9% year on year to $12.5 billion, with net income up 19% to $2.4 billion

  • Total cloud revenue was up 30%, with cloud infrastructure revenue up 64%

  • Execs highlighted demand for database services, data centers and AI

Oracle’s cloud revenue jumped 30% to $4.6 billion in the company’s fiscal Q1 2024 (ended August 31, 2023), driving overall revenue growth of 9% to nearly $12.5 billion. On an earnings call, CEO Safra Catz and CTO Larry Ellison highlighted database services and artificial intelligence (AI) as the revenue drivers of the future and noted demand for data center availability is off the charts.

“Is Generative AI the most important new computer technology ever? Maybe!” Ellison said on the call.

He noted AI development companies have inked deals to purchase more than $4 billion of training capacity on Oracle’s second-generation cloud. “That's twice as much AI training as we had booked at the end of the last Q4,” he said.

But AI isn’t the only technology Oracle is hyped about. Catz tipped cloud database services to emerge as its third pillar of revenue growth, supplementing software-as-a-service and its second-gen cloud services.

Catz said revenue from cloud database services was up 44% in FQ1, helping boost overall database subscription services, which posted 6% growth. Ellison teased an upcoming announcement with Microsoft in this area.

“We will be substantially expanding our existing multi-cloud partnership with Microsoft by making it easier for Microsoft Azure customers to buy and use the latest Oracle Cloud database technology in combination with Microsoft Azure Cloud Services,” he said.

According to Synergy Research Group, Oracle had around 2% market share as of the end of calendar Q2 2023, trailing the likes of giants Amazon (32%), Microsoft (22%), Google Cloud (11%), Alibaba (4%) and IBM (3%). But the company has a substantial cloud footprint, with 64 cloud regions, including 44 public cloud regions across the globe. Catz said an additional six public cloud regions and 11 more dedicated cloud regions are being built.

“Because we have far more demand than we can supply, our biggest challenge is building data centers as quickly as possible,” she stated.

Based on Ellison’s statement, a planned press conference this week featuring Ellison and Microsoft CEO Satya Nadella and the company’s CloudWorld event next week, it seems Oracle has more up its sleeve than just adding data centers.

Stay tuned to Silverlinings for the latest on all of those fronts!