What To Expect From Oracle's Quarterly Results
Oracle Corporation (NYSE: ORCL) is set to release its quarterly results after Wednesday's closing bell. One of the most important thing investors are eagerly waiting to know is if the company gained any significant ground in the cloud space.
Rick Sherlund, managing director at Nomura Securities, was on CNBC to discuss what kind of result investors could expect Oracle to declare.
"The industry is shifting pretty rapidly from on-premise computing, or on-premise data-centers, over to the cloud," Sherlund said. "Over the next two years it’s expected that half of all computing workloads will take place in these gigantic, hyper-scaled data-centers. So, there is not really any growth left on premise for most companies. So, for Oracle they have and they have really been struggling to show license growth. They are still the support and maintenance growth, but the Street is really very focused at this point on how much traction are they gaining on the cloud."
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He continued, “about 5 percent of their revenues come from the cloud right now, that should be up about 40 percent in the quarter.”
Sherlund feels that similar to last few quarters Oracle’s shares may drop when it declares results, but might bounce back as its fairly inexpensive.
"There's an underlying headwind that they have, which is their on-premise business and customers just aren't as excited about just expanding their on-premise business. […] The second thing is there is newer technology for database. There is a move to big data and open standards, such as HADOOP and MongoDB. So, it's not a direct substitution for what Oracle does, but it's where the growth is and Oracle isn't really doing much in that space right now," Sherlund added.
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