Oracle Corporation (NYSE:ORCL) Rallies On Ambitious Cloud Subscription Estimates


Dallas, Texas 12/19/2014 (FINANCIALSTRENDS) – Oracle Corporation (NYSE:ORCL) hit a fresh 52-week high of $45.35 as it rallied on ambitious cloud subscription estimates announced by Larry Ellison, the company’s Chief Technology Officer. The company expects new annual cloud subscriptions generate more than $1 billion next year, adding to the company’s estimated $2 billion in cloud revenue this year.

At a $3 billion annual run rate for cloud business, Oracle ambitiously aims at achieving industry milestone of $1 billion per quarter. Microsoft Corporation (NASDAQ:MSFT) also recently announced to achieve $4.5 billion in cloud revenue by next year. However, analysts predict that it won’t be a safe chase given the growing completion in the industry.

The Cloud Business

While Oracle Corporation (NYSE:ORCL) is on track to increase its revenue share from cloud businesses,, inc. (NYSE:CRM) and, Inc. (NASDAQ:AMZN) are already performing well in terms of cloud revenues. While achieved $4 billion in annual cloud revenue in the current fiscal and aiming to close the fiscal at $5.3 billion, is also expected to achieve the $4 billion milestone before the year ends.

However, Oracle enjoys a strategic positioning in the cloud market given its diversified portfolio that doesn’t just adds new cloud subscriptions but also selling multiple cloud products to competitors like Salesforce and Workday.

Conference Call Highlights

Oracle Corporation (NYSE:ORCL) reported better than expected sales growth for its core software and hardware businesses, with software business amounting to $6.8 billion in quarterly revenue. The company reported 47% growth in its cloud business and 7% growth in total revenue in constant currency.

The company is aiming to grow faster in the cloud while improving profitability. It is already three times bigger than the size of Workday and is growing faster than Salesforce. The company reported total cloud revenue of $519 million in its last quarter, driven by several quarters of cloud bookings momentum.

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