Oracle Corp. was one of the last tech organizations that gave in to the modern cloud revolution. The company had to face the consequences of this late decision by watching how Salesforce.com takes the best part of the market share for itself. Nonetheless, all these efforts paid off eventually. The company has now all its budget holes covered thanks to its cloud transition.
A Cloud Transition Entails a Long-Term Return of Investment
On Wednesday evening, Oracle went against any positive expectations by releasing some surprising fourth financial quarter numbers. This is the first time since 2014 when the company accepted to make its revenue public.
Therefore, the net income showed up to be of $3.23 billion from $10.89 million sales. This news enabled the company to propel its shares to record levels. Until recently, Oracle could never break the $47 threshold. However, the shares traded at $51 in after-hours action which can make the company worth at least $200 billion.
This is the first time in two years when Oracle managed to reverse its slow yet incremental decline. However, in this kind of situation, such revenue recoveries are normal. This is because in the beginning, the company invests great capital in cloud transition. Since the growth strategy behind cloud tech involves only long-term returns, the organization needs a couple of years to strike a balance and even gain more ground than before.
Oracle Still Faces Many Challenges Ahead
Therefore, the revenue growth for the year jumped 1.8% while profit growth’s rate was 4.9%. Co-CEO Safra Catz expects even a better comeback for the rest of the current fiscal year. She is looking at a further growth of double digits in shares.
“We will have less drag from the transition, and the base will continue to grow, so this should really accelerate.”
However, even though the financial situation of Oracle found its balance again, the cloud transition is still in progress. Its cloud-computing sector is still green and has to overcome great rivals for the front rank such as Amazon Web Services and Azure from Microsoft Corp.
Image source: 1