Oracle Seeks Manna from Cloud to Spur Growth
The company is aiming to grow its cloud infrastructure business in triple digits over the next few years built around digital innovation and higher spends
Technology major Oracle is upbeat about growth from India in its cloud infrastructure business, driven as it is by the digital innovations taking place in the country in several areas such as banking, financial services and insurance, public sector initiatives of the government and in the small and medium business space.
The company believes that public sector initiatives in areas such as health, education and even the open network for digital commerce (ONDC) protocols that aims to create a level playing field in the eCommerce space augurs well for the company’s cloud infrastructure business. Senior officials at Oracle believe these areas could spur consumption in cloud services.
Bets big on the growth in OCI customers
In fact, Garrett Ilg, President of Japan and Asia Pacific at Oracle told the Economic Times that the company was betting big on the financial sector and government projects to drive growth. He expects the Oracle Cloud Infrastructure (OCI) India unit to grow in triple digits over the next few years on the back of these initiatives.
The OCI has been leading Oracle’s India business with strong growth in recent years with the unit more than doubling its growth for the third consecutive year. Additionally, the company has also reported strong growth in its SaaS business which has doubled for each of the past two years as well.
Where would the growth come from?
The Oracle official believes that with India’s economy forecast to expand by 8% in the current fiscal year along with the growth in middle class spending, the numbers are far better than what other geographies offer. Ilg feels that these numbers aren’t an aberration and could be sustainable for the next couple of years.
The company sees growth coming from the financial sector, which has, over the past couple of years, witnessed high levels of competition for growing the customer base. Additionally, there is also the mature micro payments system engineered by UPI which along with the public spends on creating infrastructure could give a further fillip to the FinTech services.
Clearly, Oracle is aiming to corner a share of the public sector and government business to ensure sustained growth in India. Shailendra Kumar, senior vice president and regional managing director, Oracle India, says that public sector initiatives around health, education and the ONDC along with SMB business will result in rapid growth.
Cloud business grew 22% over the past year
Globally, Oracle’s cloud business grew 22% in constant currency to $2.9 billion in fiscal fourth quarter. This compares with its total quarterly revenue growth of 10% annually in constant currency to $11.8 billion. Total revenue in fiscal year 2022 rose 7% in constant currency to $42.4 billion. Readers would recall that Oracle’s accounting year ends on 31 May.
In addition, the company is also hoping to reap the rewards of its partner ecosystem that taps into such opportunities in India. Oracle boasts of 3,000 active partners in the APAC region of which about 500 are from India. The company joined hands with Microsoft that allows customers to connect to OCI via Microsoft Azure.