Oracle Cloud Made All The Right Moves In 2022

By Patrick Moorhead - February 23, 2023

At the beginning of 2022, I wrote an article deducing that Oracle Cloud was "very credible." My scorecard looked at Oracle Cloud Infrastructure (OCI) across three dimensions: financial performance, customer momentum, and ongoing innovation.

I also noted that it would be interesting to check back at the end of 2022 to review the OCI scorecard. Is Oracle carving out its spot among the top four cloud computing companies? Its string of significant customer wins, impressive cloud growth rates and unique new offerings suggest it’s aiming for “the three hyper scalers,” as we all know them. Let's dig in!

ORACLE

OCI by the numbers

Oracle reported outstanding Q2 earnings (which ends on Nov. 30), with total revenue for the quarter reaching more than $200 million above the high end of the guidance range and growing 25% in constant currency. The solid overall revenue growth was primarily due to Oracle's infrastructure and applications cloud businesses, which grew 59% and 45% respectively in constant currency. OCI consumption revenue (realized on a pay-as-you-go basis by usage) was up 88%. Oracle now has 22,000 infrastructure customers, with several customers who signed contracts exceeding $1 billion last quarter.

Sustainability is on everyone’s list

Companies of all sizes want to reduce energy consumption and carbon emissions. Environmental, social, and governance (ESG) are becoming integral to every corporate agenda.

The public cloud offers flexible resources and scalability and reduces power consumption and carbon emissions. These savings come mainly from multitenant architectures, reduced energy usage, and efficient operations.

Case in point, Oracle recently helped Exelon, the nation's largest transmission and distribution utility company, move several Oracle utility applications to OCI, allowing the company to meet its sustainability goals by consolidating data centers and reducing costs.

Earning a place among the “big four” 

Importantly, the U.S. Department of Defense awarded Oracle a share of its $9 billionJoint Warfighting Cloud Capability contract. Oracle was among four cloud providers— along with AWS, Microsoft, and Google—which earned a portion of that critical business.

That fact signifies that the Pentagon has joined other large organizations in seeing OCI as a hyperscaler and a trustworthy venue for mission-critical and security-sensitive workloads.

Last year, top technology analyst firms included OCI as one of the four leaders in public cloud computing, with Gartner recognizing it as a Visionary in its Magic Quadrant for Cloud Infrastructure and Platform Services. Businesses are also taking notice of OCI and the strides it has made in price performance and features. In 2022, large organizations, including AT&T, Tata Motors, and Subaru, all selected OCI to run business-critical workloads.

Helping to redefine helping the Telco cloud market

Oracle has renewed its strategic agreement with AT&T to give new capacity and capabilities for the company’s database and application workloads running in Oracle Cloud.

Vodafone is modernizing many business-critical systems, including 15,000 databases and 8,000 associated applications, using OCI Dedicated Region, which is enabling cloud-based applications to be released faster.

Oracle and Teléfonos de México (TELMEX) jointly announced an agreement to offer OCI services to customers across Mexico.

Oracle and Claro, a Colombian telecommunications operator, are now jointly offering OCI services to public and private sector organizations using the upcoming Oracle Cloud region in Colombia.

Integrated and automated B2B transactions

Oracle B2B Commerce, new this year, integrates and automates end-to-end B2B transactions. This service combines direct connectivity between Oracle Cloud ERP (running on OCI) and service providers ranging from J.P. Morgan Payments to other financial services firms, insurance companies, and delivery services. Oracle B2B Commerce uses a unified data model and secure workflows to digitize the entire B2B commerce process.

Direct integration with J.P. Morgan Payments will enable Oracle Cloud ERP mutual customers to benefit from integrated banking services: Deliver turnkey connectivity and integration with J.P. Morgan Payments.

A planned FedEx Compatible program solution will enable Oracle Cloud ERP customers to benefit from integrated logistics services.

Between traction in the telco market, investment in healthcare, and integration across SaaS, infrastructure, and third parties, Oracle is making its cloud capabilities more modular better to address different challenges in different industries and business functions. I’ll closely watch Oracle’s “industry cloud” business's growth.

Momentum in AI/ML workloads

Last year OCI announced a multiyear partnership with NVIDIA. The collaboration will bring the NVIDIA accelerated computing stack, from GPUs to systems to software, to OCI customers. As part of the collaboration, OCI is adding tens of thousands of NVIDIA GPUs to its capacity. Combined with OCI's AI cloud infrastructure of bare metal compute, cluster networking, and storage, enterprises have a broad, easily accessible portfolio of options for AI training and deep learning inference at scale.

For example, Adept AI, a machine learning research and product lab, uses OCI and thousands of NVIDIA GPUs to develop a universal AI teammate capable of performing various tasks.

MySQL Heatwave provides a single analytics and machine learning (ML) platform. There is no need for a separate analytics database, separate ML tools, and extract, transform, and load (ETL) duplication.

Flexible multi-cloud options 

Oracle has clearly recognized that customers want cloud services in different ways and places - and that a handful of hyperscale regions is insufficient. It’s been the most aggressive with what they call a “distributed cloud” strategy and series of announcements. OCI Multicloud provides flexible multi-cloud options. Last year, Oracle Database Service for Microsoft Azure launched, enabling customers like Marriott to integrate the capabilities of two major cloud providers for better performance and scalability. Oracle Database Service for Microsoft Azure is available across 12 regions, including newly launched interconnection locations in Phoenix, Seoul, Singapore, and South Africa.

Customers like Integra Life Sciences, MESTEC, Murad, and TIM Brasil are taking advantage of OCI's comprehensive services to simplify multi-cloud deployment.

OCI Hybrid Cloud – Oracle Exadata Cloud@Customer has momentum, with OCI now managing cloud infrastructure at customer data centers in more than 60 countries as a part of its distributed cloud. In addition, OCI previewed Compute Cloud@Customer last June, enabling customers to run applications on managed infrastructure in on-premises data centers. HSBC, for example, will migrate select database systems to Oracle Exadata Cloud@Customer, a cloud platform delivered as a managed infrastructure service in HSBC's data centers.

OCI Dedicated Cloud – which provides full regions for specific customers, like the aforementioned Vodafone, and NRI, which runs most of Japan’s capital markets.

Oracle Cloud Regions are globally distributed data centers. OCI continues to grow, currently operating 41 public cloud regions (55 including classified regions) across 22 countries on five continents. OCI has launched five new public cloud regions this year alone. As a result, OCI can now serve customers locally in South Africa, Paris, Spain, and Chicago (announced Dec. 15), and OCI is the first cloud provider to operate in Mexico. Additionally, OCI plans to launch its first commercial region in the Republic of Serbia (the country’s first by any hyperscaler) and Colombia. OCI will also add second regions in Chile, Saudi Arabia, Mexico, and Singapore.

Sovereign Cloud Regions meet the demand for protecting sensitive data in public clouds. OCI introduced two sovereign regions for the EU in Germany and Spain. Organizations in the EU can use these regions to host sensitive data and applications in alignment with relevant EU regulations and guidance.

Moving data between applications and the cloud

Oracle offers over 80 integration adapters for popular third-party software, including Salesforce, SAP, Marketo, Microsoft SQL Server, Paypal, ServiceNow, and Workday. Together with another 300 prebuilt integrations, these supported connectors enable customers to quickly move data between applications and cloud APIs, which new web services can use.

OCI’s integration services allow customers to move existing on-premises Oracle applications, unchanged, to OCI public cloud. That means businesses can continue to run proven systems until the time comes to modernize.

UK's Heathrow Airport modernized its operations by moving to Oracle Fusion Applications and integrating third-party software such as Azure AD directory services, IBM Maximo asset management, and Office 365 SharePoint collaboration software, with help from partners Capgemini and Flexagon.

Wrapping up

Oracle is making all the right moves, and customers are voting with dollars. The customer momentum appears to be broad-based. Enterprise customers are running mission-critical workloads on OCI. Oracle's sample of those customers is Albertson’s, GE Aerospace, Mazda Motors Europe, Nespresso, Toyota, Zoom, FedEx, Experian, and Zebra Technologies.

Even the beautiful game is on board with the Premier League, the world’s most watched domestic football (soccer) league, moving its historical content archive, with footage of every game played over the last 30 years, exclusively to OCI.

Has OCI increased its credibility over the past year? The facts speak for themselves as OCI lands many big-name customers. One must assume those customers spent due diligence looking at Microsoft Azure, Amazon's AWS, and Google Cloud before picking Oracle. That speaks volumes to me and shows OCI displayed the ability to deliver more business value than the alternatives.

Patrick Moorhead
+ posts

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.