Oracle’s Cloud revenues grew 85% in fiscal 3Q17

On March 15, 2017, we noted that dominance in ERP (enterprise resource planning) helped Oracle record high growth in SaaS in the last three months of 2016. Oracle (ORCL) announced its fiscal 3Q171 results on March 15, 2017. The tech giant reported revenues of ~$1.2 billion for its Cloud segment, an 85% increase on a YoY (year-over-year) basis.

Oracle’s Cloud division revenues comprise SaaS (software-as-a-service), PaaS (platform-as-a-service), and IaaS (infrastructure-as-a-service). In fiscal 3Q17, Oracle’s SaaS and PaaS revenues grew 86% in constant currency terms to ~$1.0 billion while its IaaS revenues grew 19% to $178 million

Oracle’s SaaS and PaaS revenues drove growth in the Cloud segment

Oracle’s rival Salesforce (CRM), which is frequently mentioned in the company’s earnings releases, expects to see revenues in the range of ~$10.1 billion–$10.2 billion in fiscal 2018. Keith Block, president and COO of Salesforce, noted that it expects to grow its cloud revenues “faster than any enterprise software company in history.”

Oracle’s fiscal 3Q17 earnings release was no different. Mark Hurd, CEO of Oracle, stated, “Over the past year, we sold more new SaaS and PaaS than Salesforce.com, and we’re growing more than three times faster. It’s just a matter of when we catch and pass Salesforce.com in total cloud revenue.”

Oracle’s increased interest in the IaaS space became well known after it launched the second generation of IaaS–Oracle Bare Metal Cloud.

Larry Ellison, Oracle’s co-founder and chief technology officer, believes that Oracle’s IaaS offering is better and more cost efficient than Amazon.com’s (AMZN) offering. He stated, “Gen 2 of Oracle IaaS also delivers ultra high database performance and form caller reliability in the cloud. Many Oracle workloads now run ten times faster in the Oracle cloud versus the Amazon cloud. It also costs less to run Oracle workloads in the Oracle cloud than the Amazon cloud.”
Cloud revenues

The contribution of Oracle’s Cloud revenues to its overall revenues also improved considerably. In fiscal 3Q17, cloud revenues contributed 20% to its overall revenues compared to its 17% contribution in fiscal 3Q16.