Oracle expects cloud acceleration despite sales shortfall

FILE PHOTO: Safra A. Catz, Chief Executive Officer, Oracle, speaks at 2017 SelectUSA Investment Summit in Oxon Hill, Maryland, US, June 19, 2017. REUTERS/Joshua Roberts

TEL AVIV (Reuters) – Oracle co-CEO Safra Catz said on Monday she expected an acceleration in the company’s cloud business after the software maker last month reported sales from this business that fell short of Wall Street forecasts.

Catz told reporters in Tel Aviv that the company’s cloud business was impacted by a new model made available to customers three quarters ago that resulted in much higher than projected license growth.

“That makes the appearance of a lower number [for the cloud business] even though money is actually coming into another bucket,” Catz said.

“As this evens out I think we are going to start seeing cloud acceleration again that is very significant but I don’t want to time that right now.”

California-based Oracle last month said its quarterly cloud business revenue rose 31.7% to $1.57 billion, but fell short of the average analysts’ estimate of $1.59 billion, according to Thomson Reuters I/B/E/S.

A late entrant into the rapidly growing cloud-based software business, Oracle has aggressively stepped up efforts to play catch up with rivals such as, Microsoft and

Last year, Oracle launched its autonomous database cloud to compete with Amazon Web Services (AWS).

The Israeli born-Catz said she recently discussed with US President Donald Trump the Department of Defense’s cloud computing plans.

“I talked to him about what commercial customers are doing in their move to the cloud and what I understand the Pentagon’s plan was to have one cloud,” she said.

US media have reported that the Pentagon is set to award a multi-billion dollar cloud computing contract to Amazon.

“I cannot think of a single commercial enterprise that has only one cloud, it just makes no sense. The way we see it the Microsoft workloads should go to the Microsoft cloud, the Amazon-type workloads … should go to Amazon, the Oracle should go to the Oracle cloud.”

Catz said Trump was very confident the Pentagon would have a fair review, adding, “I’m sure that they will.”

Earlier this month, Trump said he would take a serious look at policies to address what he says are the unfair business advantages of online retailer Amazon.

(Reporting by Tova Cohen; Editing by Jane Merriman)

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