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Trending Questions

What keeps customers using Oracle Database? Larry Ellison points to innovation

His insights came during Oracle’s FY21 first-quarter earnings call.

By Chris Murphy | September 2020


Oracle earnings

One of the biggest questions investors have about Oracle is whether customers will stay with Oracle Database in the cloud computing era.

Chairman and CTO Larry Ellison, speaking on the company’s FY21 first-quarter earnings call on September 10, made a strong case for why they will—not because of inertia, but because of major cloud-based innovations Oracle has rolled out during the past couple of years involving its industry-leading database.

Current Oracle Database customers are really just starting to migrate to the cloud, Ellison said. “Customers are picking Oracle Cloud Infrastructure and the Oracle Autonomous Database for a few very basic and very obvious reasons—much better security, much better reliability, much better performance, and dramatically lower cost,” he said.

For its FY21 Q1, Oracle reported that quarterly revenue rose 2% compared with the year-earlier quarter, to $9.4 billion. Cloud service and license support revenue rose 2%, to $6.9 billion. Cloud license and on-premises license revenues increased 9% in US dollars. First-quarter operating income rose 12%, to $3.2 billion, and net income rose 5%, to $2.3 billion.

Below are a few Oracle Database and cloud infrastructure innovations Ellison described during the earnings call, showing how Oracle continues to extend its cloud technology leadership.

Cloud@Customer: Oracle Cloud@Customer offerings made available this summer give customers all the benefits of a public cloud—serverless and elastic capacity, pay-for-use, no upfront cost, Oracle manages the infrastructure—but inside the customers’ data center, behind their firewalls.

“We’re seeing very rapid adoption of Oracle Database Cloud@Customer among our very largest customers, and this is just the beginning,” Ellison said. Organizations that need to keep their data on site for regulatory or other reasons covet this option. Every Oracle Cloud service is available via Dedicated Region Cloud@Customer, from the Oracle Autonomous Database to the company’s Fusion applications. And it costs the same as Oracle public cloud services (with a minimum spending commitment).

Autonomous Data Guard: With this new offering, rolled out in July, if an Oracle database running a customer’s app goes down, Data Guard automatically switches the app to a different availability zone, with no human intervention. “To use Autonomous Data Guard, there’s nothing to learn and nothing to do,” Ellison said. “You just have to turn on a single switch.”

 

“We’re seeing very rapid adoption of Oracle Database Cloud@Customer among our very largest customers, and this is just the beginning.”

Larry Ellison, Oracle Chairman and CTO

Autonomous Database: Launched in 2018, the cloud-based Oracle Autonomous Database is self-managing, self-tuning, and self-patching, which frees IT teams from having to do a lot database maintenance so they can focus on more creative work. Ellison noted that customers of Oracle Cloud ERP and other Fusion apps are building data warehouses around those apps, using Oracle Autonomous Database and Oracle Analytics Cloud. “So these are people that are SaaS customers, [that] are going to become infrastructure customers,” he said.

Gen2 Oracle Cloud Infrastructure: Oracle Autonomous Database runs only on Oracle Cloud Infrastructure. Oracle built OCI as a second-generation cloud, learning from the limitations competitors Amazon Web Services, Microsoft, and Google face with their first-gen clouds.

Ellison quoted this excerpt from a June IDC report:

“In the 2020 Industry CloudPath survey that IDC recently released where it surveyed 935 IaaS customers on their satisfaction with top IaaS vendors including Oracle, Amazon Web Services, Microsoft, IBM, Google Cloud; Oracle IaaS (OCI) has received the highest satisfaction score and the biggest year-over-year score increase of all IaaS vendors. In addition, 86% of those surveyed said they expect their spend on Oracle IaaS (OCI) to increase in the future.” (Source: IDC Industry Cloud Path, Executive Summary Report, June 2020)

Ellison then added: “I suspect this comes as a big surprise to many of you and many of our competitors.”

If OCI has that high level of customer satisfaction, “and that same IaaS, OCI, is the foundation for the world’s only autonomous database,” Ellison said, “where do you think the Oracle Database installed base is going to go?”

Photograph: Oracle

Safe Harbor Disclaimer: Statements in this article relating to Oracle’s future plans, expectations, beliefs, intentions, and prospects, including statements regarding future revenue growth, are “forward-looking statements” and are subject to material risks and uncertainties. Many factors could affect Oracle’s current expectations and actual results, and could cause actual results to differ materially. A discussion of such factors and other risks that affect Oracle’s business is contained in Oracle’s Securities and Exchange Commission (SEC) filings, including Oracle’s most recent reports on Form 10-K and Form 10-Q under the heading “Risk Factors.” These filings are available on the SEC’s website or on Oracle’s website at http://www.oracle.com/investor. All information in this article is current as of September 10, 2020, and Oracle undertakes no duty to update any statement in light of new information or future events.

Chris Murphy

Chris Murphy

Chris Murphy is editorial director at Oracle. He was previously editor of InformationWeek. You can follow him on Twitter @murph_cj.