Market Overview

Oracle's Data Centers in Asia

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Oracle Corporation is moving aggressively to offer new cloud solutions, creating proactive and personalized customer experiences by establishing essential infrastructure and services in the Asia-Pacific region in Japan and Singapore. The industry will be impacted in Cloud and Big Data to drive M&A in 2013. Oracle announced last month it will offer customers a full range of cloud solutions, including sales force automation, human resources, social networking, databases, and Java as part of the Oracle Public Cloud.

Oracle’s Enhanced Customer Data Centers in Asia

2013 will bring more movement for data centers as hardware vendors work to round out their converged data center offerings via continued M&A activity. “We are dedicated to simplifying IT, so customers can focus on driving business innovation,” said Oracle President Mark Hurd. More than 25 million users and more than 10,000 organizations use Oracle Cloud worldwide each day.

Worldwide revenues from cloud infrastructure services reached US$12.5 billion in Q4 2012 and US$47.2 billion for the full year. Synergy data showed regional spending on IaaS and PaaS passed the US$1 billion mark in 2012, having grown by 55 percent from 2011. Oracle’s shares plunged nearly 10 percent on March 21 after its fiscal Q3 results released late the day earlier missed Wall Street expectations and company outlook. IBD reported that Oracle executives mostly blamed poor sales execution for the miss. The industry as a whole closed the day up 0.1 percent on April 8. By the end of trading, Oracle Corporation rose 33 cents (1 percent) to $32.36 on light volume. The stock ranges in price between $31.90 and $32.36.

Oracle RightNow Cloud Service

Web, social, and contact center experiences offer a unified, cross-channel service solution in the cloud, enabling organizations to increase sales and adoption, build trust and strengthen relationships, and reduce costs and effort. RightNow’s service enterprise platform provides transparent reliability, unmatched security, and total cloud freedom.

The Oracle Cloud

Oracle RightNow Cloud Service—which consists of five modules including Oracle RightNow Web Experience, RightNow Social Experience, RightNow Contact Center Experience, RightNow Engage, and Oracle RightNow Service Experience Platform—is the broad portfolio of software as-a-service applications.

Data Center Competitors, Inc. (NASDAQ: AMZN) Amazon Web Services is far behind in data centers and security. Oracle aims to deliver a more modern cloud with enhanced customer security data. For longer-term deployments, Oracle customers have better benefit to using a utility, rental model from Oracle, which frees customers from investments themselves. Stock price ranges between $259.32 and $265.98. Amazon’s market cap is $117.71 billion. Shares are up 4.1 percent year to date.

Google Inc (NASDAQ: GOOG) Google is relatively new to the data center space. Because Google designs its own servers and because it now runs cloud services that other companies can use in lieu of servers, it’s driving a massive shift in the worldwide hardware market. According to Intel, Google is now Intel’s fifth largest server chip customer.

Google is now one of the world’s largest hardware makers, Google owns six data centers, with three in Europe and four more under construction (three in Asia and one in South America). The stock has ranged in price between $782.93 and $792.10. The company P/E ratio is 24.3, above the S&P 500 P/E ratio of 17.7. Shares are up 11.7 percent year to date.

Oppenheimer reiterated its “outperform” rating for Oracle and raised its price target from $37 to $40. Oracle Corporation has a market cap of $152.46 billion and is part of the technology sector. The company has a P/E ratio of 15.1, below the S&P 500 P/E ratio of 17.7. Shares are down 3.9 percent year to date.

Oracle is leveraging price competitiveness for its return on its Asia data centers. Oracle has also grown through cloud acquisitions. Oracle’s acquisitions are its main drivers for both revenue and EPS growth. Oracle has to come out with the right pricing strategy that caters to the local needs of Asia-Pacific markets. Oracle is also now challenged to adopt a Software-as-a-Service model (SaaS) as the company moves its offerings to cloud-based.  

Investors should also continue to watch evolving trends and big data growth returns of a company’s new products and technologies. There are also huge opportunities in re-writing client-server applications to run on cloud stacks and, in building and managing, a new class of smaller, cloud-compatible data centers.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Markets


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