Buoyed by cloud sales, the software giant’s numbers are good, but some dispute the AI-driven nature of the company’s gains. Credit: IDG-Owned Oracle’s latest financial report boasts substantial increases in revenue, net income, and earnings per share, largely thanks to cloud sales, which the company was quick to credit to the rise of AI. The report for Q3 of fiscal 2024, released yesterday, said that Oracle had signed multiple large-scale cloud infrastructure contracts in the previous three months, with no end in sight, as CEO Safra Catz touted the company’s bright prospects in cloud. “We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply,” she said, in a statement. “Despite the fact that we are opening new and expanding existing cloud data centers very, very rapidly.” In the past year, the company has expanded its cloud footprint considerably, announcing plans to enhance its Middle East cloud region, as well as in Africa and in Mexico, and was the first vendor to open a cloud region in Serbia and in Colombia, among other global cloud expansion plans. The company, which previously highlighted Oracle Cloud Infrastructure (OCI) demand for AI workloads as a chief driver of financial gains a year ago, said OCI, autonomous database, and strategic cloud applications pushed service license and support revenue up 11%, to $10 billion, for Q3 2024, while applications subscription revenues also rose by double digits, by 10% to $4.6 billion. Part of the move to Oracle’s Gen2 cloud infrastructure can be explained by the transitioning of many of the company’s Cerner health sciences customers to that platform, chairman and CTO Larry Ellison said. “In Q4, Oracle will start delivering its completely new Ambulatory Clinic Cloud Application Suite to these same customers,” he noted. That’s an important step forward, said Ellison, because the costs of running OCI are considerably lower than those of running the dedicated Cerner data center, and applications can be updated more regularly, along Oracle’s usual three-month schedule. It’s unquestionably an encouraging quarterly report for Oracle, whose partnerships with Nvidia, Microsoft, and other hyperscalers create an understandable momentum in the company’s infrastructure service, according to Eric Newmark, IDC group vice president. But, Newmark said, it’s difficult to square Oracle’s hyping up of its AI credentials from the reality. “No doubt that AI is driving increased demand for cloud, but I’m still unclear as to why AI is a strategic advantage for them versus other vendors,” he said. “I’ve been asking them for a year about how AI will drive revenue growth for them and they’ve provided no concrete answers. They also don’t yet have any direct pricing strategy around how to monetize AI.” Related content brandpost Sponsored by Broadcom How to govern with people-centric planning To succeed with people-centric planning, leaders need to take a different approach to governance. Leaders must produce key metrics and offer the autonomy to determine the best way to achieve those metrics. By Laureen Knudsen, Chief Transformation Officer, AOD, Broadcom May 06, 2024 3 mins Digital Transformation IT Leadership brandpost Sponsored by Avaya Staying agile in the contact center industry: The role of the connected agent A critical part of the “connected agent” strategy includes easy access to SMEs with a user experience that is simple…and AI is a core component. By Omar Javaid, Chief Product Officer, Avaya May 06, 2024 6 mins Digital Transformation news Atos receives four offers of help Rival bids seek to make the company either an integrated IT services powerhouse or a low-cost provider of data centers as a service. By Peter Sayer May 06, 2024 5 mins Managed IT Services Technology Industry feature 7 IT leadership hacks that deliver results From leaning on peers to accepting inconvenient challenges, CIOs offer time-tested, hard-won advice for achieving and sustaining IT and career success. By Paul Heltzel May 06, 2024 10 mins IT Strategy Staff Management IT Leadership PODCASTS VIDEOS RESOURCES EVENTS SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe